21st Century Business Herald trainee reporter Han Liming Shanghai reported that recently, in addition to the intensive BD cooperation between Chinese and foreign pharmaceutical companies, the acquisition of local innovative pharmaceutical companies by multinational pharmaceutical companies has also attracted widespread attention, such as AstraZeneca announced that it will acquire Gracell Biotech for 1.2 billion US dollars, and Novartis announced the acquisition of Xinreno Pharmaceutical.
"Biopharma's biggest advantage is commercialization, they don't do a very forward-looking R&D layout, and the common approach is to enrich the pipeline through continuous mergers and acquisitions of innovative pharmaceutical companies. A brokerage analyst pointed out to the 21st Century Business Herald that "overseas big pharmaceutical companies are gradually optimistic about mainland biotech, and such a blockbuster transaction can bring huge cash inflows to innovative pharmaceutical companies that have not yet achieved capital income." ”
At present, the biopharmaceutical industry has not yet come out of the "capital winter", and innovative pharmaceutical companies that are highly dependent on market financing are in a more difficult situation. On the one hand, it provides a new exit path for innovative pharmaceutical companies in addition to IPO and commercialization. On the other hand, big pharma can also find new business growth points. However, this undoubtedly puts forward higher requirements for biotech's original innovation ability.
Innovation at the source is not an easy task, capital, technology, talent, market ...... Negligence in any one link may lead to the failure of new drug development. According to the latest disclosure of the State Food and Drug Administration, 40 innovative drugs will be approved for marketing in mainland China in 2023, far exceeding the 21 in 2022, and a number of domestic new drugs have successfully broken through Europe and the United States. In the future, how will the mainland biopharmaceutical industry continue to be vigorous and innovative?
How to go from 0 to 1 more safely?
A few days ago, Ke Ying, director of Shanghai Pharmaceutical, deputy director of R&D Management Center, director and deputy general manager of Shanghai Biomedical Frontier Industry Innovation Center, said bluntly in an interview with the 21st Century Business Herald, "Biopharmaceutical companies must be based on unmet clinical needs, so that they may have better returns." In the past, the industry thought that drug development was very volatile because everyone was a fast follower. However, if scientists and professors from universities and hospitals discover new targets or even new diseases through cohort research, a new track will be created. ”
Throughout the biomedical field in mainland China, the source innovation resources are mainly concentrated in universities/scientific research institutions and hospitals, and pharmaceutical companies are the powerful promoters of the development and growth of the industry. Driven by innovation, how to organically connect the R&D achievements of universities/scientific research institutions with the development of enterprises and the growth of industries?
"From source innovation to clinical practice, there are huge hurdles to overcome, and follow-up innovative drugs still need to face the problem of commercialization, how to be widely accepted by doctors, so as to become a therapy that benefits patients. Ke Ying analyzed, "In these processes, if pharmaceutical companies can work with scientists in advance, starting from PCC, to formulate R&D routes in the way of translational medicine, the R&D time can be greatly reduced." ”
"At present, drug innovation is not only a competition for science, but also a competition for technology and time. Large pharmaceutical companies are more likely to provide support for the industrialization and systematization of drug research and development. Ke Ying believes that this is also the core key to the "last mile" between drug research and development from the laboratory to the product, "The dividends of generic drugs have been almost eaten, and now we will feel safer in the place where the innovation resources are most abundant." ”
According to Ke Ying, Shanghai Pharmaceutical and its subsidiary, Shanghai Pharmaceutical Frontier Center, and Hong Kong Science and Technology Parks Corporation jointly set up the Shanghai-Hong Kong Joint Innovation Incubator (01LABS@Hong Kong), and through the model of "Hong Kong incubation and Shanghai transformation", six biotechs have been introduced, including many university professors' entrepreneurship projects, and the R&D track focuses on tumors, autoimmune diseases, orphan drugs, etc.
Regarding the selection of the R&D track, Dr. Liu Siya, Senior Director of the Institute of Translational Research and Development at Hong Kong Science and Technology Park, explained to the 21st Century Business Herald, "The fundamental purpose of drugs or treatment options is to solve the clinical needs of patients, and at present, many diseases in the autoimmune system cannot be treated, gene therapy has the potential to treat rare diseases in one time, and there are many unmet clinical needs in tumors." From the perspective of financing, these are also the projects that can get the most investment. ”
"Shanghai Pharmaceutical Frontier can provide R&D teams with full-chain resource support from funding, laboratory, clinical trial, pilot test to industrial transformation by deeply connecting the government, industry, academia, research and capital of the innovation chain, so as to accelerate the incubation and transformation of start-ups. Ke Ying said that Shanghai Pharmaceutical will also look for suitable license in projects through the incubator to enrich the pipeline, "You can shake hands with the incubation project first, and then shoulder to shoulder, whether it can be integrated in the future depends on fate." ”
Source innovation requires multi-party support
Innovation at the source requires tolerance of the risk of failure and the support of real money. In recent years, many listed pharmaceutical companies with abundant cash flow have invested in private equity funds as LPs (Limited Partners) to incubate cutting-edge biomedical innovation companies. For innovative companies that are not listed, the main source of funding comes from the support of investors. In the current capital "winter" situation, listed companies are a valuable market-oriented fund.
According to the data of China Venture Research Institute, in 2023H1, there will be a total of 60 newly established funds in the investment field including biomedicine, with a total target size of about 61.7 billion yuan, including 24 comprehensive funds with a total scale of about 34.3 billion yuan, and 36 new funds focusing on big health investment, with a total scale of about 27.4 billion yuan. The LPs of the newly established funds are mainly corporate investors, accounting for about 53%, of which biopharmaceutical companies account for about 22%.
Liu Dawei, President and Partner of Shanghai Biomedical Fund, also revealed that Shanghai Biomedical Fund is actively preparing to set up a US dollar fund focusing on early-stage investment in Hong Kong, further deepening Shanghai-Hong Kong cooperation, complementing resources, and promoting the development of biotechnology innovation industry into a new engine for Hong Kong's economic growth.
Focusing on Hong Kong, in terms of the secondary market, in August 2018, the introduction of the new "18A" listing rules of the Hong Kong Stock Exchange opened the floodgates for pre-revenue and pre-profit biotech companies to enter the capital market, thus setting off a boom in the IPO of mainland biotech companies in Hong Kong, which peaked in 2021. Hong Kong has become Asia's largest life sciences fundraising hub, providing more exit opportunities for investors in the primary market. In 2023, a total of 13 biopharmaceutical companies will be listed on the Hong Kong stock market, raising a total of HK$10.7 billion.
At present, many biotechs are accelerating the implementation of innovative products in the Hong Kong market, and Hong Kong is also continuously introducing innovative measures to empower the creation of an industrial ecosystem for biotechnology companies.
In September 2023, the Hong Kong Biomedical Innovation Association issued the "2023 Policy Address Proposal (Bioeconomy) – Building a Sustainable Bioeconomy System", recommending that Hong Kong establish relevant pharmaceutical regulatory authorities to facilitate clinical trial approval and new drug registration in Hong Kong.
Subsequently, on October 25, the Chief Executive of the Hong Kong Special Administrative Region Government clearly stated in the "2023 Policy Address" that the preparatory office of the "Hong Kong Drug and Medical Device Supervision and Administration Center" will be established in 2024, with the long-term goal of establishing a "first-level approval" drug registration agency. Hong Kong will no longer rely on other drug regulators and will approve drugs in Hong Kong directly based on clinical trial data.
Ke Ying pointed out that "in the near future, Hong Kong plans to invest 10 billion Hong Kong dollars to support the development of Hong Kong's biomedical industry, and the projects of universities and research institutes registered in Hong Kong can have 1:1 financial support with enterprise support." From this point of view, Hong Kong continues to increase its support for innovative pharmaceutical companies, and the follow-up results remain to be further revealed.
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