Chimagen Biosciences Secures $850M Global Out-Licensing Deal for Trispecific TCE CMG1A46, Signaling a Strategic Shift in Chinese Biotech’s Early-Stage Globalization
GSK
Pharmaceutical R&D Manufacturer
On October 29, GSK and Chimagen Biosciences announced an agreement whereby GSK will$300 million upfront payment, total $5.5 billionDevelopment and commercialization milestone payments, acquiring a T-cell engager (TCE) product CMG1A46 from Chimagen Biosciences.
In China, CMG1A46 has not yet released the Phase I clinical results for hematological tumors, and autoimmune indications remain at the theoretical stage. However, GSK is already planning to conduct a Phase I clinical trial for systemic lupus erythematosus globally in the first quarter of 2025. Industry insiders have commented:Total investment exceeds 6 billion yuan, taking too large a step on an early-stage project without much "echo."
But GSK doesn't think so. CMG1A46 offers potential in the fields of hematological malignancies and autoimmune diseases such as systemic lupus erythematosus and lupus nephritis, making the $300 million investment worthwhile for GSK. Also on August 9, Merck spent 5.6 billion yuan to acquire CN201 from Chimagen Biosciences, which is currently in undisclosed Phase I and Ib/II clinical stages with limited data available.
The pace of China's innovative drug exports is accelerating. Unlike in the past, biotech companies no longer engage in large-scale publicity campaigns in their early entrepreneurial stages, hoping to attract capital attention for financing.Today's innovations are more precise and powerful, directly targeting overseas BD.
On October 25, at the Beijing International Biomedical Industry Innovation Forum, several industry experts believed that the underlying logic behind this phenomenon is the growing significance of China's pharmaceutical innovation capabilities on the international stage.The focus of overseas projects is increasingly shifting towards early-stage pipelines.
Many companies have already realized that "going global should be done early," but what kind of pipeline can fetch a higher price? How should product pipelines be prepared before going global? How to look ahead and explore subsequent clinical value, stimulating new growth points for returns? There are actually many nuances involved.
Going Overseas for Funding, Starting to Move Towards Earlier Stages
Chimagen Biosciences is a relatively representative example among recent Chinese pharmaceutical companies expanding overseas:The variety seeks authorization before clinical trials have even begun,No need to bear the cost of overseas clinical trials, no need to go through the complicated foreign application process, let multinational companies help with the clinical trials, and prepare for simultaneous domestic and international launches in the future.
China is gradually becoming a hunting ground for foreign pharmaceutical companies, with an increasing number of early-stage project deals, indicating that some of China's innovative drug R&D capabilities have reached international advanced levels.
Previously, overseas interest in Chinese companies with market-valued pipelines tended to focus on Biotech firms with Phase II or III clinical stage results. However, an increasing number of early-stage pipelines have been licensed out recently. According to data from the "2024 Annual Review of Pharmaceutical R&D Trends," as of January 2024, China has 6,098 drug development pipelines, second only to the United States, accounting for 26.7% of global R&D pipelines. From 2023 to the first half of 2024, there were a total of 149 outbound licensing deals for innovative drugs in China. According to the "2024 Blue Book on Biopharmaceutical Overseas Expansion,"From 2023 to June this year, the proportion of China's drug applications for clinical trials, Phase I clinical trials, Phase I/II clinical trials, and Phase II clinical trials reaching overseas markets reached 62.0%.
For example, the CD3/CD19/CD20 tri-specific antibody purchased by GSK was approved for clinical trials in China in December 2021. In October 2022, the first subject was dosed in the U.S. clinical trial. Both in China and the U.S., it is still in Phase I clinical stage, and no clinical data has been disclosed yet, but it was sold for a high price of $300 million.
Guo Xiang, Senior Vice President of BeiGene and Head of Statistics and Data Science, said at the forum: "Almost all of the company's projects are conducting global trials, laying a solid foundation for subsequent launches in different countries."
Similar to BeiGene's approach, this is not yet a standard practice for biotech companies in China. However, with the fundamental changes in the monetization channels for innovative pipelines in China,Chinese innovative drug companies that want to "globalize fundraising" must proactively reach outwards during the early stages of research and development.The earlier the funds are received, the greater the certainty provided for new drug development.
BD can partially replace the previous Series A and Series B financing methods.Chimagen Biosciences only received a round of angel financing of 5 million yuan in April 2017, and other funds rely on BD.: In December 2021, a collaboration on China rights was reached with Borui Biologics, involving an upfront payment of 100 million yuan and milestone payments for R&D and sales.
Generally speaking, pipeline sellers can quickly obtain advance payments accounting for about 15% of the total transaction amount. The cost of completing Phase I clinical trials is approximately USD 3.4 million. Only through continuous business development (BD) can these emerging entrepreneurial companies survive.
How Can Local Biotechs Adapt?
In the past, the clinical development approach of China's innovative pharmaceutical companies was almost entirely focused on the domestic market. After obtaining promising clinical data in China, they would then attempt to enter the U.S. market; some companies directly supplemented overseas clinical data based on their Chinese data.
However, the failure of Innovent Biologics' PD-1 to enter the U.S. market in 2022 sounded an alarm for this model.It has had inherent flaws since the initial clinical design, and it is not easy to pass the scrutiny of the FDA.Early layout of international clinical trials becomes the only choice.
Specifically, in the establishment rules of clinical pipelines,During the clinical dose optimization phase, the tumor tolerance criteria move towards new standards for multidisciplinary treatment.
A practical issue is that conducting clinical trials overseas is extremely costly. In the U.S., each patient in an oncology clinical trial costs between $150,000 and $200,000, which few startup biotech companies can afford. The risk of loss from clinical failures is also high. According to clinical data from 2007 to 2023, the success rate for Phase II clinical trials of oncology pipelines is the lowest at 17%, significantly lower than that of Phase I and Phase III trials.
Lilly Yan, Executive Director of the U.S.-China Cancer Association, once stated,Some biotechs with weak financial strength can try to outsource the entire clinical trial to a CRO.
Money is still a minor issue; the clinical project approval is the core standard to test the value of the pipeline. Yang Bin, head of the Clinical Operations Department at Hutchmed, stated:“Most good products cannot be converted into money, and one of the reasons is clinical project initiation.”The selection of product types and the targeting of popular targets are both very sophisticated.
In August this year, Nature published an article stating that currently, cell therapy dominates the oncology field in terms of product types. Bispecific/multispecific antibodies and ADCs follow in terms of influence, while nucleic acid drugs are growing the fastest, increasing from 24 types in 2021 to 108 types this year. In areas such as endocrinology, metabolic diseases, neurology, and gastrointestinal disorders, small molecule drugs still hold a dominant position. Targets like CD19, HER2, and CLDN18.2 are highly sought after.
By Miao Miao
Editor: Jiang Yun, Jia Ting
Operation｜Valley
Illustration｜Visual China
Statement: Original content by Jian Shi Ju, please do not reprint without permission.
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