Per reporter: Chen Xing
■ Related company: Corning Jereh Pharmaceutical (9966, HK)
■ Core competitiveness: A number of technology platforms with high barriers have been constructed, including the scarce Fc-based heterodimer bispecific antibody research and development platform CRIB, a variety of innovative dual antibody derivation platforms based on unique glycosylation coupling, etc., which can be used to continuously enrich product pipelines
■ The company in the eyes of the institution: a leading enterprise in the field of dual antibody with international competitiveness; strong scientific research strength, bright pipeline of high-value products; and steady progress in the listing of core products
■ Concept: Innovative drug research and development
The original intention of returning to China to start a business was to make hemophilia drugs, and then made more than 30 biosimilars and sold more than 20 - a few years before the start-up, Xu Ting, founder, chairman and president of Corning Jereh Pharmaceutical (9966, HK), was "laying the foundation" and "chipping" for innovative drugs.
After 13 years of entrepreneurship, Xu Ting waited for the "harvest period". In November last year, the country's and the world's first subcutaneous PD-L1 inhibitor KN035 was approved for marketing, which is Corning Jereh's first commercial product. The dual antibody drug KN046, which Xu Ting has high hopes for, has conducted more than 20 clinical studies covering more than 10 types of tumor diseases in China, the United States and Australia, and will be declared for listing this year.
In the eyes of the outside world, Corning Jereh has ushered in a turning point of no commercial income. But how do scientists do business before they become profitable? This is a hurdle in front of Xu Ting.
Image source: Courtesy of Corning Jereh Pharmaceuticals
Sold more than 20 similar drugs
"Burn" out several innovative drugs
On November 24, 2021, Corning Jerry finally received the long-awaited news that Envolizumab Injection (KN035 trade name: Envida ®) has been approved for marketing. As the first subcutaneous PD-L1 inhibitor in China and the world, envolizumab is also the first commercial product since corning Jereh's inception.
Including envolizumab, there are currently 12 PD-1/PD-L1 models listed in China, including 6 domestic PD-1, 2 domestic PD-L1 (Corning Jerry's Envollimonab and Cstone's Shugli maclizumab), 2 imported PD-1 and 2 imported PD-L1 (Roche's altelizumab and AstraZeneca's duvalliumab). There are 6 models in the application stage, including the first gram of Zhulimonab of Zhaoke Pharmaceutical, the titliumab of Kelun Pharmaceutical and the Adebelli monoclonal antibody of Hengrui Pharmaceutical. There are 60, 44 and 17 drugs in the first, second and third phases of the clinic, respectively, and from the perspective of listing and declaration data, domestic PD-(L)1 has entered an intensive harvest period.
Although the track is not exclusive, in the eyes of Xu Ting, the founder and chairman of Corning Jereh, Envolizumab still has the advantage of subcutaneous injection. "The PD-1/PD-L1 drugs that are currently on the market require intravenous infusion administration, and there are restrictions on patient compliance and convenience. With the advancement of diagnosis and treatment methods, many tumors are no longer absolutely fatal diseases, and many tumor patients need long-term prognostic management. They need to maintain a normal life while undergoing treatment, and for these patients, subcutaneous injections that can be completed in 30 seconds will be more advantageous than hours of intravenous infusions. Xu Ting said.
Differentiated research and development ideas are the focus of attention of the helmsmen of the first generation of innovative pharmaceutical companies like Xu Ting. This is based on their many years of experience working in the advanced pharmaceutical industry overseas, and also out of vigilance against the fact that most of the results of the first generation of innovative drugs are 'good fruits'".
As Xu Ting said: "A few years ago, an innovative drug company could not raise money without a PD-1 pipeline, causing everyone to rush to do it, capital to rush to invest, and finally formed today's PD-1 inner volume." Out of this sense of crisis, Xu Ting finally decided to make each drug of Corning Jerry labeled "Corning Jerry", as he said: "We can't let the outside world know at a glance that this drug is made by Corning Jerry, so we don't do it." ”
But before making differentiated new drugs, Xu Ting and Corning Jerry also experienced the problem of "how to survive". Only by surviving first can we have the confidence to make truly innovative drugs.
Back in 2008, Xu Ting, who had already served as chief researcher and project leader in Archemix, Serono and Biogen, returned to China, and what prompted him to return to China was a documentary. The documentary documents the harsh reality of domestic hemophilia patients facing amputation against the background when all foreign blood products were banned at that time. In the United States in the 1990s, the production technology of recombinant human coagulation factor VIII required by patients with hemophilia was very mature, but domestic patients faced the dilemma of no drug available once imported was banned.
At a time when some European and American advanced drugs, especially monoclonal antibody blockbuster drug patents have expired or are about to expire, biosimilars usher in a research and development dividend period; domestically, emerging industrial parks represented by Pudong, Zhongguancun and Suzhou Industrial Park have shown a new picture. Therefore, Xu Ting decided to return to China to start a business. In the same period, Junshi Biology and Xinda Biology were established successively, and these enterprises became the forerunners of China's innovative drug industry and the planters of the first batch of innovative drugs today.
However, at that time, China's pharmaceutical industry was still the world of generic drugs. The investment is not much, the risk is extremely small, and the pharmaceutical companies with a few generic drugs in their hands make a lot of money. "Billion investment, ten-year cycle", external funds are prohibitive. In order to solve the problem of funds, Xu Ting transferred the original intention of returning to China, the restructured human coagulation factor VIII and FACTOR VII projects, to Chia Tai Tianqing, who was planning the transformation. Subsequently, Xu Ting turned the direction of research and development to biosimilars, and once became the enterprise with the largest number of biosimilar product lines in China, but the original more than 30 monoclonal antibodies and protein biosimilars were finally sold more than 20. Early technology transfers accumulated original capital for Corning Jereh. Xu Ting said that although the idea of making new drugs has not changed during this period, he was still facing a more headache problem at that time - new drug research and development and regulatory policies with black eyes.
"Looking back today, there were many things in the classification of 1 to 15 categories of macromolecular drugs that year were very vague, and it was common to be unclear about the requirements of the review system; the second was that the time of clinical approval at that time was very uncertain, we once had a similar drug project of adalimumab, waited for 3 years to get clinical approval, and when I got it, I gave up directly because it was too late." In fact, waiting for 3 years to get clinical approval was already a faster approval speed at that time. The uncontrollable nature of this source makes the pharmaceutical people uneasy.
After the first ten years of "crossing the river by feeling the stones", Corning Jerry was lucky - from "raising money to make medicine" step by step to "selling drugs to make money". Like many innovative pharmaceutical companies that enter the night before commercialization, Corning Jereh's battlefield has shifted from the lab to the market.
"Find a friend" vs. "Set up a stage"
The commercialization vision of the original Biotech
Entering the commercialization stage, has Corning Jerry figured out what to do?
KN035 is Pathfinder's first commercial product, and Corning Jereh has chosen a collaborative development path for it. In 2020, Corning Jereh entered into a cooperation agreement with Simcere Pharmaceutical and Mindadi Pharmaceutical. Among them, Corning Jereh as the original research party of KN035 is responsible for production and quality, Sidi Pharmaceutical is responsible for clinical development in the field of oncology, and Simcere Pharmaceutical is responsible for the exclusive commercial promotion after registration and listing in Chinese mainland.
In Xu Ting's eyes, this is the most cost-effective way. "Now PD-(L)1 is already a generic drug, just like aspirin. I just need to tell the doctor what kind of drug it is, and then tell the doctor the characteristics of the drug, so that it can quickly enter thousands of hospitals, which is what KN035 will do after it is listed. If it takes a few years to build a self-built team and then enter the hospital, it is not cost-effective to be too late. Xu Ting said.
The "find a friend" method is not only used in mature drugs. In August last year, Corning Jereh and CSPC Group reached a cooperation on the development and commercialization rights of the Her2 bispecific antibody KN026 in Chinese mainland for breast cancer and gastric cancer indications. Corning Jereh will receive a down payment of $150 million and milestone payments of up to $850 million, as well as double-digit tiered sales commissions. At the same time, CSPC undertakes the follow-up clinical development of KN026 breast cancer and gastric cancer indications. Due to the competitive situation of Her2-positive breast cancer and gastric cancer, alliances with lithotripsy can accelerate clinical development and future marketing.
In the context of mature drugs that have completed the early academic promotion and clinical popularization, or the research and development of Chinese drugs still need to continue to invest, choosing to cooperate with pharmaceutical companies with ready-made commercial teams is a two-pronged strategy to partially cash in the commercial value of the pipeline in advance and reduce continuous investment, and can also accelerate the clinical development and commercialization process of products under development through complementary resource advantages.
For Corning Jerry, "saving firepower" is because it also has a more aggressive area, that is, the dual anti-drug KN046. As a bispecific antibody targeting PD-L1/CTLA-4, KN046 has conducted more than 20 clinical trials covering more than 10 types of tumor diseases in China, the United States and Australia, and is in various stages. Its indications include non-small cell carcinoma, liver cancer, pancreatic cancer, triple-negative breast cancer, esophageal cancer and thymic cancer, etc., which will be declared for listing in 2022.
At present, only 4 dual antibody drugs have been listed in the world, including Trion/Neovii's Removab (delisted in 2017), Roche/Sino-foreign pharmaceutical's Hemlibra, Amgen/AstraZeneca's Blincyto and Johnson & Johnson's EGFR/c-Met dual anti-Rybrevant. Among them, the hemophilia A drug Hemlibra has been approved for marketing in China, and is currently the only dual antibody approved in China.
In terms of anti-tumor dual antibody drugs, Corning Jereh's KN046 and Kangfang Bio's AK104 have advanced in the front. Xia Yu, founder and chairman of Kangfang Biology, once told the "Daily Economic News" reporter that the commercialization of AK104 should be "done by itself". Coincidentally, in terms of the commercialization of KN046, Xu Ting also chose to "set up his own stage".
Unlike PD-1's "general medicine" sales model, KN046 has a first-mover advantage and also faces the challenge of no one to cross the road ahead. How to carry out academic promotion and let doctors prescribe? Can't get into Medicare? How to put the amount if you don't enter? How to promote multi-party payment to cover the pricing of new drugs? These are all new problems facing Xu Ting.
In Xu Ting's vision, KN046 undertakes two missions, one is to create the concept of "PD-1 upgrade" to give those cancer patients whose PD-1 drug treatment effect is not good or applicable to new treatment hopes; the other is to use KN046 as a product to brand Corning Jerry, "When 046 is mentioned, it thinks of Corning Jerry, and when it comes to Corning Jerry, it thinks of 046." These are all things that require our self-built teams to educate the market."
When it comes to KN046 pricing, Xu Ting's answer is very sincere: "The pricing of KN046 depends on two factors: medical insurance payment and competitors. ”。
As Xu Ting said, it is precisely because of the guiding role of the drug administration on drug prices that in order to obtain sustainable profit margins, pharmacists must seek support from overseas markets. "046 in China to solve the problem of accessibility and medical insurance payment capacity, the ultimate goal is to cover as many patients as possible." And in overseas markets, 046 will solve the problem of more commercial returns."
In overseas markets, Corning Jereh chose to promote product launches as soon as possible through the orphan drug path. Since 2020, KN035 for the treatment of biliary tract cancer and soft tissue sarcoma, KN046 for the treatment of thymic epithelial tumors, KN026 and KN046 for the treatment of gastric cancer and gastroesophageal junction cancer combination therapy has been granted FDA orphan drug qualification. Applying for orphan drug qualification is seen as a rapid marketing strategy – first to market, then to expand the indications and develop the market.
So far, Corning Jereh has drawn a business roadmap for the first generation of innovative pharmaceutical companies - investing limited net profits and budgets into the blockbuster products with the most commercial potential; the biggest goal is to enter the medical insurance directory in China, and the overseas market has become a profit-bearing market. Whether this strategy is effective may not be known until the relevant drugs are approved as scheduled.
The industry has not entered the cold winter
But not everyone can survive the spring
The listing of their own drugs overseas is the vision of many domestic drugmakers, including Xu Ting. This not only shows that the clinical trial results of new drugs have been affirmed by mature markets, but also means that the profits of drugs have been predictably guaranteed. But part of the reason why the vision is beautiful is because it is rare.
With the reform of the mainland drug review and approval system in 2015, a large number of returnees returning to China to devote themselves to the cause of innovative drugs, and the continuous influx of capital from outside the industry, the mainland's innovative drug industry has entered an unprecedented period of vigorous development. The data shows that in the whole year of 2021, the number of new drug projects applied for the first time on the mainland reached 198, more than in the whole year of 2020; the number of new drugs listed reached 97, a new high in the calendar year. According to the number of declared projects, it is expected that the number of new drugs listed in 2022 will usher in a more substantial increase.
The number of new drug clinical trials also continues to grow. Since 2018, the number of new drug clinical trial projects approved by CDE has increased by about 30% to 40%. In 2021, the growth rate of the number of new drug clinical trial projects rebounded to more than 40%, of which the number of phase III clinical trial projects increased by 378, a year-on-year growth rate of 36%.
In 2021, China is second only to the United States in the number of transactions in the global innovative drug trade. A total of 2 innovative drugs in China have been approved by the FDA for listing, and another 10 innovative drug projects are in the NDA/BLA stage.
It can be said that this generation of innovative drug developers and entrepreneurs represented by Xu Ting has witnessed the soil for the cultivation of innovative drugs from a desert to a fertile soil, and the cause of innovative drugs that was once difficult to sow has entered a harvest period.
However, there are also voices of calm thinking coming out of the craze. Xu Zengjun, former chief scientist of the Drug Evaluation Center of the State Food and Drug Administration, said: "At this stage, the new drugs of the first-in-class have not yet been seen, nor can it be said that there are none, but it can be said that they are rare."
In addition, the capital that has always expressed a "pay- " attitude towards innovative drugs has also quietly changed. In the past few months, the IPO of pharmaceutical companies has no longer been an accident. Biopharmaceutical companies that rely on PPT to showcase beautiful R&D pipelines but do not commercialize products face a double Waterloo of valuation and financing.
Xu Ting does not deny the existence of "bubbles", he believes that the moderate bubbles in the past have promoted the development of the industry to a certain extent. The current "squeeze bubble" that has been or is about to come is also intended not to let the biomedical industry regress under the false prosperity, but to return to rational and healthy growth. "Capital looks at hot targets, and without hot targets, it can't raise money." Finally, there was a situation in which hot target research was piled up and clinical resources were wasted. Squeezing out such a 'bubble' is good for both the industry and capital."
The industry may not have yet entered the harshest winter, but not everyone can survive the arrival of spring. Xu Ting believes that what needs to be worried about is not the "inner volume", because the survival of the fittest is the law of the industry, and eventually there are still a number of enterprises that can survive. It is normal for the stock market to break, "it is worth worrying about making drugs for the purpose of listing, I go to buy patents, introduce products, if my ultimate goal is to sell the company after listing, this is what the industry and capital market regulators do not want to see." ”
For the industry's hotly discussed First-in-class and Best-in-class, Xu Ting believes that this should not be the purpose of making drugs. "The purpose of doing medicine should always be to solve clinical needs. For example, now that aspirin is used so well, there is no need to make a new drug that competes with aspirin. He added.
The book "The Truth About Generic Drugs" describes a situation in which the makers of generic drugs line up all night outside the US Food and Drug Administration, and whoever knocks on the door first can take the lead in seizing the market outside of patented drugs and obtain exclusive profits. At this time, whoever is in the front of a large number of homogeneous research and development is the winner. But obviously, the law of speed is not always applicable in the field of innovative drugs, and who can meet the unmet clinical needs is the meaning of innovative drug research and development.
The reporter's note | drug writing prescription is the success of an innovative pharmaceutical company
Perhaps today, the helmsmen of the first generation of mainland innovative pharmaceutical companies like Xu Ting have deeply understood that China's innovative drugs cannot only live in PPT or roadshow materials, but only if they are successfully written into prescriptions, the closed loop of innovative drug companies from the laboratory to the market can be completed.
After receiving the good news of approval for listing, innovative drug companies began to try to sell drugs to patients in different ways: authorizing cooperation, building sales teams, and even authorizing some projects in the late stage of research and development. This is because innovative pharmaceutical companies have only a limited number of coins in their hands and must invest in the gate with the greatest winning rate. After the listing, pharmaceutical companies are also faced with many choices such as price reduction or self-sale.
According to incomplete statistics, since 2015, there have been more than 1,600 new drug projects in the clinic in the mainland. At half the success rate, 800 drugs will face different degrees of commercialization challenges.
Reporter: Chen Xing
Edited by: Liang Xiao
Vision: Zou Li
Typesetting: Liang Owl Ma Yuan
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