21st Century Business Herald reporter Zhu Ping Beijing reported that on April 20, according to market news, Tianjing Bio is seeking to acquire or sell shares in specific drugs. Under the influence of this news, the intraday stock price of Tianjing Biology rose by nearly 25% before the market; on April 21, the intraday stock price of Tianjing Biology also rose by more than 7%. On April 22, the 21st Century Business Herald reporter asked the relevant person in charge of Tianjing Biology to verify the news, and the person in charge said that the matter had not been heard internally.
It is understood that on January 28, Tianjing Biology and the Administrative Committee of Hangzhou Qiantang New District signed a strategic agreement on the real estate of biological drugs. There are also reports that Tianjing Bio is forward-looking in the layout of the whole industry chain and plans to grow into a Biopharma in 2024.
Regardless of whether the above acquisition or sale news is true or not, it is not a simple matter for the market to become Biopharma. A head of an innovative pharmaceutical company previously said in an interview with the 21st Century Business Herald reporter that not all Biotech can become Biopharma, and not all Biotech needs to become Biopharma.
In July 2021, Xu Jiaxi, managing director of Industrial Securities, also made a related statement at an industry conference: "Biotech's window of opportunity to Big Pharma has closed, and there will not be more than 10 Big Pharma in China in the future." ”
"Companies actually have a variety of options, they can only do Biotech, not to advance to Biopharma. Because this advanced process involves multiple capabilities such as manufacturing and commercialization, especially in the current dilemma of innovative drug payment, after years of research and development investment, whether the company has the ability to industrialization and commercialization of its own products must be considered, and can be explored through cooperation with Biopharma and even sales. The above-mentioned industry insiders pointed out.
Stock price under pressure?
Sources say Celestial is working with consultants on a strategic review after the company has attracted the interest of U.S. and European pharmaceutical giants looking to expand their cancer drug business in China and have expressed interest in acquisitions; and that Horizon may also consider other options, such as merging with another company or selling equity stakes linked to specific drug partnerships.
Affected by this news, the stock price of Tianjing Bio has risen. An industry insider who has long been concerned about Tianjing Biology told the 21st Century Business Herald reporter that the capital market is true or false, and it is not known whether it is true or not. On January 6, Tianjing Biotech announced a plan to increase its holdings by executives, closing up 2.19% on the same day; on March 31, Tianjing Biotech announced that important shareholders and the company's management voluntarily locked up shares, closing up 7.82% the next day.
Regarding the voluntary lock-up of shares, Dr. Zang Jingwu, founder, chairman and acting CEO of Tianjing Biologics, pointed out that this demonstrates the high confidence and long-term support of major shareholders in the long-term development of the company and its accelerated transformation into a global innovative biopharmaceutical company focusing on specialty drugs. "We will continue to consolidate our innovation capabilities and achieve our key milestones in R&D, commercialization and global collaboration, continue to create more value for our shareholders and employees, and fulfill our strong commitment to patients around the world."
However, since the announcement of the executive increase plan, the stock price of Tianjing Bio has shrunk by 65%.
Some market analysts said that the sharp decline in the stock price of Tianjing Bio is related to the current situation of Chinese stocks, but it may also be related to the setbacks suffered by its core product target CD47 in the past six months. In September 2020, Tianjing Biotech reached a strategic cooperation of nearly US$3 billion with AbbVie on CD47 monoclonal antibody Lyzolimab (TJC4, Lemzoparlimab), which broke the record of Chinese biopharmaceutical companies authorizing overseas at that time.
However, with the setback of Gilead's CD47 clinical trial at the beginning of the year, Tianjing Bio is also facing a lot of pressure.
On January 25 of this year, Gilead announced that its clinical trial of the CD47 antibody Magrolimab combined with azacitidine was suspended by the U.S. Food and Drug Administration (FDA) on the grounds that the researchers found that in different trial groups of the clinical study of the combination of Magrolimab and azacytidine, the serious adverse events (SAEs) reported by the investigators were significantly different between the different groups.
At the same time, Gilead also announced that it will partially suspend clinical research on the combination of CD47 antibody + azacidine. During the partial pause, all clinical trials of combined Magrolimab+azacytidine will stop screening and enrollment, while patients who have already enrolled will continue to receive treatment and close data monitoring. The affected combined treatment of Makrolamab + azacytidine includes all three phase III clinical trials (AML, MDS, unfit AML), 1 Phase 1b clinical trial and 1 Phase II clinical trial.
It is also understood that Tianjing Bio has not yet successfully listed any products. Up to now, there are 1 product to be declared for marketing, 2 phase III/registered clinical trials, 7 phase II clinical trials and 8 phase I clinical trials in the Tianjing Biological Pipeline.
Among them, in the R&D pipeline of Tianjing Biologics, Felzartamab (anti-CD38 monoclonal antibody), which is expected to become its first commercial product, is considered to be the starting point of Tianjing Biologics' transformation from Biotech to Pharma.
In November 2021, the company and Jichuan Pharmaceutical reached a strategic cooperation on the commercialization α of TJ101, licensing Jichuan Pharmaceutical to develop, produce and commercialize TJ101 in Chinese mainland.
Advanced dilemma
In the industry's view, biotech currently has two development paths: one is Biotech to become Biopharma, and even the future to become Big pharma, their own research and development of products, you can also go commercial; the other is That Biotech continues to strengthen research and development, has been doing Biotech, product pipeline there are more products developed, in order to cooperate with other companies or sell to other companies.
However, with China's accession to the ICH in 2017 and the relaxation of the IPO threshold for unprofitable biopharmaceutical companies in 2017, China's Biotech saw the vision of becoming Biopharma.
According to Huachuang Securities statistics: Since 2018, more than 30 Biotech companies have been listed and traded in A-shares and Hong Kong stocks. In 2020, 18 Biotechs will be listed for the first or second time. Huachuang Securities expects that in the next 5 years, the number of listed innovative pharmaceutical companies is expected to expand to about 100. Han Yingjiao, senior vice president of HKEX's Global Listing Services Department, pointed out that in the first half of 2021 alone, there were more than 70 Biotechs declared on the Hong Kong Stock Exchange.
However, the characteristics of innovative drugs determine that not all Biotech can develop smoothly, and even have the opportunity to become Biopharma, because research and development is nine deaths, failure is the norm, and once it is wrong, it will face the risk of cash flow disruption. To this end, Biotech's cash reserves directly affect the benign development of enterprises and even life and death
Judging from the financial reports released so far, enterprises with large volumes, rapid expansion and high expenditures also have higher requirements for cash reserves. Taking BeiGene as an example, although it will raise 22.3 billion yuan in 2021 and the total cash on the account will reach 42.4 billion yuan, its R&D investment alone will be as high as 9.3 billion, and only considering the current cash reserves and R&D expenditures, it will be more generous in 4 years.
Lepu Bio's cash flow in 2021 is 150 million yuan, investing 790 million yuan in research and development expenses, only considering the current cash reserves and research and development expenditures, it may be less than 1 year for the company to maintain healthy operations; and although the stock price of Goles Pharmaceutical has reached the floor price, it still has a cash flow of 2.5 billion yuan, which can theoretically continue to support nearly 12 years.
Many companies are also actively preparing cash flow, such as Junshi Biology, cash flow is only 3.5 billion yuan, but R & D expenditure of 2.07 billion yuan, theoretically can continue to support less than 2 years, on the evening of March 7, Junshi Bio disclosed its first fixed increase plan after landing on the science and technology innovation board, and the proposed increase is not more than 3.98 billion yuan.
In fact, there are also Biotech products (soon to be) commercialized, but it is not easy to build their own factories and commercialization teams. The person in charge of the above-mentioned pharmaceutical company used self-built factories to give an example to the 21st Century Business Herald reporter that many of them have production links, management links, and quality links, which require time, and there are also high risks, so the industry also circulates a sentence: "500 million US dollars to build a factory, it is better to do 10 new projects." ”
At the same time, the current commercialization process of Biotech is still not ideal, and the payment problem of innovative drugs needs to be solved urgently. On the one hand, innovative pharmaceutical companies are currently mostly accessible through medical insurance negotiations, and the decline is inevitable. On the other hand, the "last kilometer" problem, although all places are carrying out the dual-channel policy, but the new product admission is still not ideal, Beijing drug sunshine procurement platform and the Health Commission released 2018-2020 partially listed innovative drugs Beijing hospital admission shows that these drugs can enter the hospital a year after the listing is not optimistic, such as Compaxipu in 2018 has been listed for 4 years, the number of hospitals in Beijing is 26, and there are more than 70 tertiary hospitals in Beijing; zebutinib approved last year, The number of hospitals entering Beijing is 1.
To this end, Biotech is also trying new paths, such as small Biotech with the help of large-scale Biopharma commercialization capabilities for the commercialization of the first product, some through equity cooperation, such as CSPC Pharmaceutical Group to subscribe to the equity of Belda, Hengrui to subscribe to the equity of Wanchun; there are also forms of joint venture company, such as Junshi Bio announced a cooperation agreement with Jiachen Xihai, the two sides will jointly set up a joint venture company. Collaborate globally to develop and commercialize new drug projects based on mRNA technology platforms and.
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