Domestic New Drug R&D Strength is Gradually Ascending, and Overseas Product Authorization is in Full Swing

On November 13th, LEGN.US reached an 1 billion US dollar cooperation agreement with Novartis Pharmaceuticals, under which Novartis will obtain the exclusive global licensing rights for LEGN.US's chimeric antigen receptor T-cell (CAR-T) therapy targeting DLL3. Similarly, on November 9th, Chengyi Biological Technology reached an overseas authorization cooperation agreement with AstraZeneca for its small molecule GLP-1 agonist ECC5004. AstraZeneca will gain the development and commercialization rights for this product outside of China, and Chengyi Biological Technology will receive an initial payment of USD 185 million and future milestone payments totaling USD 1.825 billion, setting a new record for the highest total amount of domestic overseas authorization transactions. After years of accumulation, a large number of innovative drug enterprises have been cultivated domestically, developing a batch of internationally competitive products. With the continuous enhancement of innovation strength, the timing is right for these products to "go global." This article focuses on the major overseas authorization events from this year, reflecting the vibrant momentum of China's innovative drug development.

License-out transaction refers to the mode where companies conduct early drug R&D, and then license the project to other pharmaceutical companies for late-stage clinical development and commercialization. It follows a milestone-based model to obtain clinical results at each stage as well as a certain percentage of sales after commercialization. As of now, the number of overseas authorization events this year has exceeded 80, with the Yangtze River Delta region leading by a wide margin, with as many as 50 projects achieving overseas authorization, accounting for 62%. Among them, Shanghai and Suzhou each have more than 20 projects, far surpassing all other cities in the country, demonstrating the strong innovative R&D strength in the two cities. In terms of project distribution, the main focus is on hot areas such as antibody drugs, new vaccines, and ADC drugs. In terms of the total transaction amount for the projects, thirteen major projects (including the two mentioned above) with a total amount exceeding USD 1 billion have been disclosed, accounting for 15%. The following text will list these major projects one by one. 

1. WuXi Biologics and GSK

In January of this year, WuXi Biologics and GSK reached a licensing agreement for multiple innovative TCE bispecific/multispecific antibodies. GSK will gain exclusive licensing rights to a T-cell engager (TCE) bispecific antibody that is in the preclinical stage of development based on WuXi Biologics' patented technology platform. Additionally, GSK may choose up to three other TCE bispecific/multispecific antibodies based on this platform. WuXi Biologics will receive a USD 40 million upfront payment and milestone payments based on net sales. 

According to public information, this bispecific antibody is still in the early discovery stage, targeting tumor-associated antigens (TAA) on the surface of tumor cells and CD3 antigen on T cells. By binding to both tumor cells and T cells, it specifically activates T cells, leading to tumor cell killing and anti-tumor activity. 

2. Hutchmed and Takeda

In January of this year, Hutchmed and Takeda Pharmaceutical reached an exclusive licensing agreement for fruquintinib. Takeda Pharmaceutical will further develop, commercialize, and manufacture fruquintinib globally, excluding mainland China, Hong Kong, and Macao. Hutchmed will receive a USD 400 million upfront payment and potential milestone payments for product registration, market launch, and commercial sales. On November 9th, Takeda Pharmaceutical received FDA approval for fruquintinib, becoming the first and only highly selective inhibitor targeting all three VEGF receptors approved by the FDA for the treatment of previously treated metastatic colorectal cancer. 

Fruquintinib is a highly selective, potent oral VEGFR inhibitor that suppresses tumor angiogenesis, exerts anti-tumor effects, and has advantages such as reducing off-target toxicity, improving tolerability, and providing more stable target coverage. The drug was approved for marketing in China in September 2018 and has seen annual sales volume growth of over 30% since then, with sales reaching approximately RMB 700 million last year. 

3. Keymed Biosciences Inc., Lepu Biopharma and AstraZeneca

In February of this year, Keymed Biosciences Inc. and Lepu Biopharma reached a global exclusive licensing agreement with AstraZeneca for their potential first-in-class Claudin 18.2 antibody-drug conjugate CMG901. AstraZeneca will be responsible for the global R&D, production, and commercialization of CMG901. Both companies will receive a USD 63 million upfront payment and corresponding milestone payments. 

CMG901 is the first monoclonal antibody-drug conjugate targeting Claudin 18.2 to receive clinical trial approval in China and the United States. It is composed of a monoclonal antibody, a degradable linker, and monomethyl auristatin E (MMAE). At this year's ASCO meeting in November, Keymed Biosciences Inc. presented the latest results of the phase I clinical trial of CMG901, which primarily investigated the drug's safety, tolerability, pharmacokinetics, immunology, and preliminary efficacy in late-stage solid tumor subjects. The data showed that the drug demonstrated good safety and tolerability, with the vast majority of adverse events being manageable and allowing continued use of the drug. 

4. DualityBio and BioNTech

In April of this year, DualityBio reached an exclusive licensing agreement with BioNTech for two ADC products, DB-1303 and DB-1311. BioNTech will obtain the rights to develop, manufacture, and commercialize these two ADC products globally outside of Mainland China, Hong Kong, and Macao. DualityBio will receive a total of USD 170 million in upfront payments as well as corresponding milestone payments. 

DualityBio is focused on the development of ADC drugs and has established a unique DITAC technology platform, on which the development of DB-1303 and DB-1311 is based. DB-1303 is a third-generation ADC product targeting HER2, exhibiting strong tumor inhibitory activity, excellent safety, and a broad therapeutic window in HER2 tumor models. It was granted Fast Track designation by the FDA in January of this year. DB-1311 is also a third-generation ADC drug, with existing data showing strong anti-tumor activity across multiple types of cancer. It received an implied approval for domestic clinical trials in August of this year. 

5. GeneQuantum Healthcare and Pyramid Bio

In April of this year, GeneQuantum Healthcare reached an exclusive licensing agreement with Pyramid Biosciences for the ADC drug GQ1010. Pyramid will be responsible for the development and commercialization of GQ1010, and GeneQuantum Healthcare will receive USD 20 million in upfront payments and an USD 1 billion in additional milestone payments. GQ1010 is also an ADC drug targeted at TROP2, and early clinical data shows highly differentiated characteristics, with a broader therapeutic window compared to other ADC drugs targeting the same point. 

6. Hengrui Pharmaceuticals and Aiolos Bio

In August of this year, Hengrui Pharmaceuticals reached an authorized development agreement with Aiolos Bio. Aiolos Bio will obtain exclusive rights to develop and commercialize the monoclonal antibody drug SHR-1905 globally outside of the Greater China region, and Hengrui Pharmaceuticals will receive USD 25 million in upfront payments as well as milestone payments at different stages. SHR-1905 is a Thymic Stromal Lymphopoietin (TSLP) monoclonal antibody self-developed by Hengrui Pharmaceuticals, which can block the release of inflammatory cytokines, inhibit the transmission of downstream inflammatory signals, ultimately improve the inflammatory state, and control disease progression. Clinical evidence has confirmed its role in addressing severe asthma symptoms. 

7. BioMap and Sanofi

In October of this year, BioMap reached a groundbreaking strategic cooperation with Sanofi to jointly develop cutting-edge AI modules for the discovery of biologic therapeutic drugs using BioMap' artificial intelligence platform. BioMap will receive USD 10 million in upfront payments and, depending on milestones such as preclinical, clinical development, and commercialization, is expected to receive over USD 1 billion in payments. BioMap has built a comprehensive protein biological map using public and private resources, and has developed and improved computational models. In addition, through automated and integrated workflows, it has achieved sustainable collection of high-quality data to advance new drug R&D and optimize its processes. 

8. MediLink Therapeutics and BioNTech

In October this year, MediLink Therapeutics and BioNTech reached a global licensing agreement to collaboratively develop the next-generation HER3-targeted antibody-drug conjugate product (product name undisclosed). MediLink Therapeutics will grant BioNTech exclusive rights to globally develop, manufacture, and commercialize one of its ADC products (excluding mainland China, Hong Kong, and Macao), and will receive an upfront payment of USD 70 million, as well as additional development, regulatory, and commercialization milestone payments. 

9. KBP Biosciences and Novo Nordisk

In October this year, Novo Nordisk acquired KBP Biosciences's kidney disease and hypertension drug Ocedurenone (KBP-5074) for a total transaction amount of approximately USD 1.3 billion. In recent years, Novo Nordisk frequently topped the headlines in the pharmaceutical industry with the outstanding performance of semaglutide. However, the company is not content to only focus on diabetes as its core development strategy. It has already started to adjust its overall layout and gradually expand into the layout of other related severe chronic disease fields, forming a pattern of innovative drug development in the chronic disease field with multiple paths and one super and multiple strong competitors. KBP-5074 is an oral small molecule non-steroidal candidate drug, and clinical data shows its potential for slowing the progression of chronic kidney disease (CKD). Its indications do not exceed those already approved or under investigation for semaglutide, and in the future, drugs like KBP-5074 may be used in combination with semaglutide to strengthen its position in the field of metabolic-related chronic diseases such as CKD. 

10. Hansoh Pharma and GSK

In October this year, Hansoh Pharma and GSK reached an exclusive licensing agreement for the ADC new drug HS-20089. GSK will receive global development and commercialization rights excluding Chinese Mainland, Hong Kong, Macao, and Taiwan, while Hansoh Pharma will receive an upfront payment of USD 85 million and milestone payments of up to USD 1.485 billion. HS-20089 is a new type of ADC drug that targets B7-H4 and is currently undergoing phase I clinical research for the treatment of gynecological cancer in China. 

11. Biotheus and BioNTech

In November, Biotheus reached a licensing and collaboration agreement with BioNTech for its anti-PD-L1/VEGF bispecific antibody (PM8002). BioNTech will receive the development, production, and commercialization rights for PM8002 globally (excluding Greater China), while Biotheus will receive an upfront payment of USD 55 million and milestone payments. PM8002 is a bispecific antibody candidate drug that enriches PM8002 molecules in the tumor environment by targeting PD-L1, thereby reducing the systemic side effects caused by the systemic blockade of VEGF. It is currently undergoing phase II clinical researches in China. 

Prospect

Since 2015, domestic biopharmaceutical industry has been accelerating its pace to achieve innovation, and has gradually caught up with international standards. The major events mentioned above are among the most convincing evidence, especially in emerging areas such as ADC, where China has become an undeniable force in global R&D. However, amidst the enthusiasm for overseas product licensing (also known as "taking the boat out to sea"), there have also been instances of overseas giants "returning" products, indicating that early-stage innovations still face significant challenges in the advancement process, and the quality and innovativeness of the products themselves still need to be verified. In addition, the question of why few domestic companies are able to independently launch products overseas and achieve international market presence without relying on collaboration with foreign giants is worth pondering. Finally, it is believed that in the future, a group of international pharmaceutical giants will certainly emerge in China, leading domestic innovative products to achieve independent international presence.