Image source @ Visual China
Text | City Boundary, author | Zeng Jiayi, Editor 丨 Liao Ying
The sky-high price of 700,000 shots of drugs was cut to 33,000, and the "soul bargaining" in the medical insurance directory negotiations was very popular. This fierce game has also pushed the dilemma of some rare disease patients who "have medicine but cannot afford to use it", and rare disease pharmaceutical factories to the forefront.
Gu Ruofan, 21 years old this year, nicknamed Sweet Sweet, was diagnosed with mucopolysaccharidism at the age of four and a half because of obstacles in running and jumping. This is a rare congenital genetic disorder with an incidence of one in 100,000.
"At that time there was no cure for the disease." The doctor gave Sweet's diagnosis: "Your child will not grow tall again, and over time, he will be paralyzed, blind, and curled bones until he dies." ”
As with Tiantian, there are about 20 million patients with various rare diseases in China, close to the total resident population of a megacity. In addition to the torment of illness, they are also faced with the situation of "no drugs available" because of the rarity, the "orphan drugs" that they can get treatment, and because there are few pharmaceutical companies to develop them.
From "fathers make their own rare disease drugs to save their children" to "mothers of rare diseases receive and send controlled drugs and are accused of drug trafficking", all this points to the scarcity of rare disease drugs. In 2021, rare diseases are receiving unprecedented attention.
Under this fiery outlet, Beihai Kangcheng, which was listed as the "first stock of rare diseases", landed on the Hong Kong Stock Exchange at the end of 2021, but it was "poured with cold water" on the first day of listing, and the stock price plunged nearly 27% by the end of the day.
Beihai Kangcheng, which originally started as a cancer drug, has determined the strategy of basing itself on anti-tumor drugs and deeply cultivating the "no man's land" strategy of domestic rare disease drug research and development before rare diseases have been so concerned. But this road is not easy to walk, the current Beihai Kangcheng has been listed products rely on authorized introduction, their own hematopoietic ability has not been verified by the market, coupled with the domestic industrial chain of rare disease drugs is not perfect, which makes the market worried about the prospects of Beihai Kangcheng.
01, the big business behind the niche
How rare are rare diseases? This can be seen from the fact that there is no uniform definition of rare diseases in various countries.
The United States once defined rare diseases as diseases with less than 200,000 patients; in the "China Rare Disease Definition Research Report 2021", for the first time, "diseases with a neonatal incidence of less than 1/0,000, a prevalence rate of less than 1/10,000, and a number of patients less than 140,000" were included in rare diseases.
This rare probability falls on an individual's head as a mountain. Gu Ruofan's mother, Zheng Yao, who is also the director of the Beijing Zhengyu Mucopolysaccharide Rare Disease Care Center, said, "When Gu Ruofan was diagnosed in Xi'an in 2004, the doctor who had been practicing medicine for more than 20 years told Zheng Tao that Gu Ruofan was the second case of mucopolysaccharide he had seen. ”
In fact, the incidence of the vast majority of hereditary rare diseases is very low, because the small number is also generally classified as a "rare disease". Highly bound to rare diseases is the corresponding "orphan drug".
It is conceivable that due to the low incidence and small degree of attention, the pathogenesis of many genetic diseases has not been studied in detail. Less than 10% of the more than 7,000 rare diseases known globally have approved treatments or regimens.
Because of its rarity, the road to diagnosis for patients with rare diseases is difficult. Taking mucopolysaccharide storage type II as an example, it takes almost five or six years from the beginning to diagnosis. For pharmaceutical companies, fewer patients mean that it is difficult to make money on the development of such drugs, and those who chase profits often have little interest in developing drugs for these patients.
Once the "orphan drug" is developed with huge human and material resources, its pricing includes the cost and the cost of maintaining research and development in the future, and the price of an orphan drug is often hundreds of thousands or even millions. This also includes The Rare Disease Drugs of Beihai Kangcheng.
In September 2020, Beihai Kangcheng successfully approved the introduction of a rare disease drug for mucopolysaccharide storage disease type II, Herris, and was commercially applied in China in June 2021. However, because it has not yet entered the medical insurance, for patients, the current drug price is still "sky-high".
"Not entering the medical insurance means that a 30-pound child uses Herris for a year's medical expenses of more than 1 million yuan, and weekly injections require lifelong medication." Zheng Tao told the city boundary.
Beihai Kangcheng revealed to the city: "At present, a small number of patients have begun to undergo enzyme replacement treatment through Hai Ruisi, but most patients are unable to take drugs due to economic burdens. ”
But even if the cost of developing rare disease drugs is high and the failure rate is high, why do so many pharmaceutical companies turn to the niche track of rare diseases?
In the final analysis, this is still a "business", the huge lure of interests attracts these pharmaceutical companies to fight, and examples of "motorcycles turning into racing cars" abound.
This is because although orphan drugs are orphan drugs, the number of patients they face is indeed not large. But once it expands from a single indication to a variety of indications, the market and population covered are huge.
The movie "I am not a medicine god" drug prototype Gleevec, as a targeted drug for chronic myeloid leukemia, was initially listed as an "orphan drug" approved, but this orphan drug not only created a new treatment for tumor targeted treatment, but also turned deadly leukemia into a chronic disease that can be controlled by drugs for a long time.
In the hot PD-1 market in tumor immune targets, Bristol-Myers Guibao and Merck's "O drugs" and K drugs were also approved as orphan drugs, with global revenue of nearly $20 billion for both drugs in 2019.
These examples of wealth-creating effects are also widening the market boundaries of rare disease drugs. In 2017, the global rare disease drug market totaled $70.3 billion, and orphan drug sales are expected to reach $242 billion in 2024, accounting for 1/5 of global prescription drugs. In 2020, the proportion of orphan drugs in the number of DRUGS approved by the US FDA has approached 60%.
Compared with the foreign rare disease market, after the first release of the rare disease catalogue in China in 2018, drugs in the field of rare diseases have a policy guidance outline. This means that this "business" already has policy guidance.
The transformation of Beihai Kangcheng from anti-tumor drugs to rare disease drugs was also born in this background, coupled with the help of domestic pharmaceutical outsourcing leaders such as WuXi AppTec and Tigermed, which quickly introduced rare disease drug pipelines and promoted the commercialization of products. In the end, Beihai Kang took three years to extract the title of "the first share of rare diseases".
Standing at the cusp of the wind, Beihai Kangcheng, although standing tall, but "the height is not cold", compared with the loss problem faced by general innovative drugs, the commercialization of its rare disease drugs is more difficult.
02, sky-high prices of drugs but rely on "purchasing"
Beihai Kangcheng, which started as a cancer drug, stepped on the wind outlet of the times and chose the business model of "anti-tumor drugs + rare disease drug research and development", one hand anti-tumor drugs, the other hand rare disease drugs. However, in the 10 years since its establishment, it has quickly grasped three commercial products, which is a little "shortcut".
At present, Beihai Kangcheng has three listed products, including oral gargling compso for the prevention and treatment of oral mucositis caused by chemotherapy, neratinib for her2-positive early breast cancer intensive adjuvant therapy, and China's first mucopolysaccharide storage disease type II enzyme replacement therapy drug Herris.
It is worth noting that these three products are not independently developed by Beihai Kangcheng, but are authorized to be introduced. Among them, the main product "Herris" was introduced from the Korean Green Cross Company.
In the words of a person in the industry, the authorized introduction is like "purchasing on behalf of", so that they have no initiative.
According to the prospectus, Beihai Kangcheng signed a patent license with Green Cross Company of Korea to obtain the patent license for the use of Herris in China, and the patent term of this product is 15 years from the first time (2020) to be listed and sold in the region.
Judging from the commercialization process of Herris rare disease drugs in China, Beihai Kangcheng was first authorized to introduce, then handed over to a third party to sell, and finally everyone shared. The color of the innovation in the middle is slightly thin.
In September 2020, Beihai Kangcheng signed a distribution agreement with an independent third-party distributor who was responsible for the distribution of Herris in the Chinese mainland for a period of two years, and if there were no special circumstances, it would automatically renew for three years.
This way of authorizing the introduction is actually a double-edged sword, just like one of the risks written by Beihai Kangcheng in the prospectus includes the termination of the authorization, and Beihai Kangcheng has stepped on the thunder.
As a listed product of Beihai Kangcheng and the main source of revenue, Nairatinib was released from all rights in Beihai Kangcheng Greater China for a "break-up fee" of US$20 million by the original licensing company Puma, and the authorization of Nairatinib in Hong Kong, Macao and Taiwan was only until December 31, 2022.
Although after the subsequent agreement, Beihai Kangcheng was still able to sell neratinib, but only as a distributor qualification. This means that the future is bound to further compress Beihaikang's non-lucrative profit margins.
At the same time, the sales of rare disease drugs are very difficult, as a pharmaceutical company not only to let patients use drugs, but also to make patients affordable drugs.
Dozens of millions of dollars a year in medical expenses is not affordable for any family, Zheng Tao told the city: "The older the child, the more expensive the price of the drug." ”
For the current dilemma faced by domestic rare disease pharmaceutical companies, Beihai Kangcheng told the city: "The first thing is the problem of payment protection, and every link of rare diseases from diagnosis to medicine to medical insurance reimbursement has not yet taken shape (perfect). ”
This is the same as the research and development of innovative drugs, and reasonable returns are the driving force for pharmaceutical companies to continue to innovate. Otherwise, when there is no dawn of returns, it is difficult for pharmaceutical companies to have the motivation to develop new drugs.
Beihai Kangcheng told the city: "To solve the problem of rare disease drugs, especially high-value drugs, any single source of funds is not enough, multi-level protection is imperative, rare disease high-value drugs can only enter the local multi-party co-payment link after entering the medical insurance directory." ”
03. Can it become China's "Jianzan"?
With the rare theme of rare diseases, Beihai Kangcheng can quickly "go out of the circle" in the capital market, which is not unrelated to the strong background of founder Xue Qun.
Xue Qunshicheng is the "godfather of rare diseases" and the first person to introduce the "Jianzan model" into China.
Born in Beijing in 1969, Xue Qun has never left the pharmaceutical field since he stepped into the door of Peking University's School of Pharmacy. From receiving his Ph.D. in organic chemistry from Brown University Biology in the United States to obtaining an MBA from Virginia's Darden School of Business, Xue Qun directly entered the world's first listed rare disease innovative drug company Jianzan (which has been acquired by Sanofi) after graduation.
Jianzan is a non-negligible existence in the field of orphan medicine. Some media once defined it this way: "In the era of rapid development of biotechnology, Jianzan is the Apple company in the industry, opening up a new path for drug development for rare diseases." ”
During his more than ten years at Jianzan, Xue Qun became acquainted with his "soul mentor" Henry Termil. Timir is a legendary industry leader who has been at the helm of Jianzan for 28 years and is known as the "godfather of rare diseases".
In 2012, with the encouragement of Temer, Xue Qun, who had already sat in charge of the China region of the multinational pharmaceutical company, chose to found Beihai Kangcheng, and the direction was to develop rare disease drugs based in China. In Xue Qun's view: "China must establish its own rare disease industry, otherwise it is an insoluble situation of sky-high prices of drugs and no right to speak in price." ”
You know, the sky-high price of drugs for rare diseases began with Temer. In 1991, Jianzan developed Ceredase, the first drug in the history of human treatment of Gaucher's disease, and in terms of price, Jianzan set the cost of treating the drug at $150,000 per year, which was the most expensive drug in the history of that era.
Turmill believes that this figure is reasonable compared to its efficacy and benefits to patients; and that only such a price can guarantee the healthy operation of Jianzan as a commercial company.
The commercialization route planned by Temer for Jianzan is that the early product is positioned in the direction of enzymes and carbohydrates that are relatively easy to manufacture and easy to sell, and after accumulating funds and strength step by step, the products are continuously upgraded to higher technical fields.
The conversion to Beihai Kangcheng is to obtain market recognition through authorized introduction, and then support the research and development of innovative drugs.
Judging from the results, this road is not easy to follow. According to the prospectus, in 2019, 2020 and the first half of 2021, the revenue from the sale of products in Beihai Kangcheng was 1.5 million yuan, 12 million yuan and 12.2 million yuan respectively, totaling less than 30 million yuan, almost all from anti-tumor drugs, but the loss in the same period was as high as 1.4 billion yuan.
In addition to the three products on sale, Beihai Kangcheng now has 13 R&D pipelines, of which in the field of rare diseases, Beihai Kangcheng has seven biological agents and small molecule products and product candidates. In 2019, 2020 and the first half of 2021, Beihai Kangcheng's R&D expenditure was 55.383 million yuan, 110 million yuan and 270 million yuan, respectively.
In addition to the continuous rise in R&D expenditure, in order to promote the commercial sales of the rare disease drug Herris, Beihai Kangcheng's sales and expenses have also increased sharply, from 16.4 million yuan on June 30, 2020 to 44.8 million yuan in the first half of 2021, a surge of 173%.
Rare disease drug research and development needs to sit on the cold bench for many years, Jianzan spent ten years to complete the key leap from 0 to 1" and truly developed the first rare disease drug for Gaucher disease, and then there was continuous innovation product support.
Beihai Kangcheng has not yet proved its innovative drug research and development strength to the market, but its ability to commercialize products has been recognized by many capitals, and the rare disease drug Hai Ruisi that has just been listed has also given Beihai Kangcheng more imagination space.
Seeing that there is still capital in this market imagination space, there are many pharmaceutical companies in Beihai Kangcheng's investors, such as WuXi AppTec and Tigermed. Among them, as the largest external shareholder, WuXi AppTec holds a 9.51% stake in Beihai Kangcheng. As we all know, WuXi AppTec, as the "Foxconn" of the pharmaceutical industry, is also the leader of global pharmaceutical outsourcing.
From the support of scientists to star capital, Beihai Kangcheng, who has successfully stepped into the capital market, may have just begun, as a patient's family member said: "I hope that domestic innovative pharmaceutical companies can learn from Huawei, can sink their hearts and do research well, and master the technology in their own hands." ”
In fact, if you don't do the research of such rare disease drugs, you will always be passive, and only by starting to do it can more rare disease patients see more hope.
For Beihai Kangcheng, as a pioneer in the domestic research and development of rare disease drugs, when to make a profit is a problem that it cannot avoid in business; back to every rare disease patient, our attention to them actually determines our distance from the disease.
Resources:
- People's Daily Overseas Edition: "The number of rare disease patients in China is about 20 million, and a safety net for the prevention and treatment of rare diseases should be built"
- Beijing Pain Challenge Foundation: 2020 Rare Disease Medical Assistance Project Multi-Party Kung Fu Practice Report
(Except for the separately marked source, the above picture is from Visual China)