Fosun Pharma Fully Acquires Fosun Kite, Renamed Fosun Kairos, and Submits Prospectus for CAR-T Leader

Sep 14, 2024 15:25 CST Updated 15:25

Fosun Pharmaceutical

Healthcare Industry Group

Fosun Kairos

Developer of Tumor Immune Cell Therapy Technologies and Products

Kite Pharma

CAR-T Cell Immunotherapy R&D Provider

September 13,Fosun Pharmaceutical announced that its holding subsidiary, Fosun Pharmaceutical Industry, plans to pay $27 million (approximately 200 million RMB) in cash to acquire 50% of the equity in Fosun Kite Biotechnology Co., Ltd. held by Kite Pharma.After the completion of this transfer, Fosun Pharmaceutical will hold 100% of the equity in Fosun Kite Biotechnology Co., Ltd., and plans to increase the capital of Fosun Kite by contributing 10 million US dollars or equivalent RMB as a single shareholder in cash.

On the same day as the signing of the "Equity Transfer Agreement," Fosun Kite obtained a license from Kite Pharma for mainland China, Hong Kong, and Macao (licensed territory) and the field of cancer treatment (licensed field).Exclusive Development, Production and CommercializationYikaida and Brexu-cel (R&D project FKC889) rights.
In the future, Fosun Pharmaceutical and Kite Pharma willContinue through the model of licensed cooperationMaintain a long-term strategic partnership.

At the same time, a wholly-owned subsidiary of Fosun PharmaceuticalFosun Kite to be renamed Fosun Karry, and will serve as the core platform for Fosun Pharmaceutical's cell therapy technology, continuing to focus on the field of tumor immunotherapy. It aims to promote CAR-T cell therapy products to benefit more patients and meet unmet clinical needs.

Zhang Wenjie, Executive President of Fosun Pharmaceutical and Chairman of Fosun KiteStated: "In the future, Fosun Kite will continue to adhere to the center of unmet clinical needs, strive to promote the accessibility and curability of CAR-T cell therapy products, benefit more patients, and actively explore new cooperation models with the government and industry players to build a CAR-T ecosystem, continuously leading the development and upgrading of the industry."

Interestingly,Zhang WenjiePreviously served as the CEO of Henlius,Fosun HenliusAfter turning a profit for the first time, in July 2023, Fosun Pharmaceutical appointed Wenjie Zhang as the company's Executive President.

Public information disclosed in April 2024 showed that Zhang Wenjie served asFosun PharmaceuticalExecutive President, Co-CEO of the Innovative Drug Division, Executive Director and Chairman of the Board of Henlius, and Chairman of the joint venture Fosun Kite.

Now, following Fosun Henlius, the Fosun Group has added another company.Wholly OwnedFosun Kite Biotechnology Co., Ltd.

In June 2024, Fosun Pharmaceutical and Henlius jointly announced:Fosun Pharmaceutical privatizes Henlius through an absorption merger.

Extended Reading:There will never be another Fosun Henlius.

China's First CAR-T Therapy

Will it be the first to enter China's national medical insurance?

Fosun Pharmaceutical's forward-looking layout in the field of cell and gene therapies seems to have always been very rapid.

In 2017, the world's first CAR-T therapy was approved for marketing in the United States, meaning that blood cancer is no longer an incurable disease.

Extended Reading:Another Cell Therapy Approved in China!

In the same year, Fosun Kite was established, a joint venture between Fosun Pharmaceutical and Kite Pharma (a subsidiary of Gilead Sciences).

In the year of its establishment, Fosun Kite introduced Yescarta (FKC876), the world's first approved CAR-T cell therapy for the treatment of specific non-Hodgkin lymphomas, from Kite Pharma in the United States, and quickly received approval to conduct registration clinical trials in China.

On June 22, 2021, Fosun Kite's Axicabtagene Ciloleucel Injection Yescarta (trade name: Yikaida) was approved in China.Becoming the first CAR-T cell therapy product approved for marketing in China, used to treat adult patients with relapsed or refractory large B-cell lymphoma who have received two or more prior lines of systemic therapy.

In June 2023, Yikaida's new indication was approved for the treatment of adult large B-cell lymphoma that is ineffective with first-line immunochemotherapy or relapses within 12 months after first-line immunochemotherapy. It was also the only CAR-T therapy in China at the time for this indication.
Currently, the clinical trial application for the third indication of Yikai Da (Axicabtagene Ciloleucel) has been approved in China, targeting adult patients with relapsed/refractory indolent non-Hodgkin lymphoma (r/r iNHL, including follicular lymphoma and marginal zone lymphoma). This indication is currently in the bridging clinical trial phase in China.

While advancing the clinical trials of its products, Fosun has also established a full value chain for its cell and gene therapy, ranging from research and development to production.

In January 2019, Fosun Kite's 10,000-square-meter CAR-T industrial production base was launched at the Zhangjiang Innovative Drug Industry Base. In the same year, its nearly 2,000-square-meter cell therapy research and development center was unveiled in Shanghai.

Although cell and gene therapies have shown astonishing efficacy, their prices continue to break industry records, making them unaffordable for ordinary patients. Currently, in the Chinese market, the cost of such products generally reaches up to millions of RMB per injection (and they are not covered by medical insurance).

In view of this, since the approval of Yikai Da for marketing, Fosun Kite has actively cooperated with commercial insurance companies and promoted customized city insurance plans. To date, more than 170 Yikai Da high-standard treatment centers have been established in 28 provinces, municipalities, and autonomous regions across China, and have successfully...Incorporating Yikai Da into惠民insurance programs across over 110 cities and more than 80 commercial health insurance plans., thereby enabling more patients to benefit from this innovative therapy.

In addition,Fosun Kite is also the first company to announce a pay-for-performance model for its CAR-T therapy.

In January this year,Fosun KiteAnnouncement of a pay-for-performance model for patients treated with CAR-T therapy,Patients will be evaluated for efficacy 3 months after purchasing and receiving the drug. If complete remission (CR) is not achieved, patients may receive a refund of up to 600,000 yuan.。

Even so,The biggest way to increase drug sales in China is still to get into the medical insurance.。

According to the recently announced "2024 National Medical Insurance Catalog Adjustment Preliminary Review List," four Chinese CAR-T therapies, including Axicabtagene Ciloleucel Injection, have successfully made the cut. Looking back four years ago, Yikaida (Axicabtagene Ciloleucel) was the first to pass the preliminary formal review for national medical insurance but ultimately failed to participate in the negotiation, an event that sparked widespread discussion.

Regarding the upcoming medical insurance negotiations, Wu Yifang, Chairman of Fosun Pharmaceutical, previously stated that he firmly believes these products should be included in the medical insurance system because they genuinely bring significant value to patients.

Fosun Pharmaceutical's move to gain full ownership this time has inevitably led to speculation about whether it aims to fully push these therapies into the scope of medical insurance.

Policy Benefits, Seizing the Opportunity?

In recent years, competition in the life sciences field has escalated to a national level, such as in the past:The United States Releases "Biotechnology and Manufacturing Goals" Timeline, "Reshaping" Global Bio-Innovation Rules。

And recently, a series of policies released in China have also benefited many cell and gene therapy companies and institutions, including foreign-funded ones.

September 8,The Ministry of Commerce, the National Health Commission, and the National Medical Products Administration jointly issued the "Notice on Launching Pilot Programs for Expanded Opening in the Medical Field."

InChina (Beijing) Free Trade Zone、China (Shanghai) Pilot Free Trade Zone、China (Guangdong) Pilot Free Trade Zone、Hainan Free Trade PortAllow foreign-invested enterprises to engage in human stem cells, gene diagnosis and treatmentTechnology development and application for product registration, market launch, and production

Extended Reading:The Biggest Benefits List for Wholly Foreign-Owned Enterprises! All Are Waiting for the Cake of Opening-Up to Land

September 11,Shanghai Releases 2024 "Science and Technology Innovation Action Plan" Cell and Gene Therapy Special Project Application Guidelines.

The online application for the project will start at 9:00 on September 20, 2024, and the deadline (including the online review and submission by the applying organization) isOctober 15, 2024, 16:30。
Execution Period: December 1, 2024 to November 30, 2027.

One of the application requirements is that the project applicant must be a legal entity or non-legal organization registered in the city, with the corresponding ability to organize and implement the project.

The Strongest Rival is Approaching Fiercely

Fosun Must Go All Out

In 2023, the global sales of Axicabtagene Ciloleucel Injection Yescarta reached 1.498 billion US dollars.Is the world's best-selling CAR-T therapy。

Fosun Pharmaceutical's financial report mentioned that the sales of Axicabtagene Ciloleucel Injection in China exceeded 100 million yuan in the first half of 2023.
Benefited more than 600 Chinese lymphoma patients throughout 2023.

As of now, six CAR-T therapies have been approved in China.

In addition to Axicabtagene Ciloleucel Injection, there are:JW TherapeuticsRilimogene Injection (Sales in the first half of 2024: 86.8 million yuan, a year-on-year decrease of 1%),Reindeer Bio/InnoventIdecabtagene Vicleucel Injection,HeYuan BiotechnologyNakilofarcept Injection,CARsgen TherapeuticsZevorcleucel Injection, as well as the approval just granted on August 27th,Legend BiotechCilta-cel Injection.

Due to incomplete data disclosure, it is currently impossible to determine which CAR-T therapy has the best sales in the Chinese market. HoweverLegend BiotechCilta-cel InjectionWill undoubtedly be Fosun's strongest competitor。

The first half of 2024,Cilta-cel sales reached $343 million (approximately 2.44 billion yuan), up 81.5%, primarily driven by contributions from the U.S. market; Legend Biotech partnersJohnson & Johnson Predicts Cilta-cel Sales to Reach the Second Chinese "Billion-Dollar Molecule" This Year。

Moreover, the path to profitability for Fosun Kite remains arduous and long.

According to the announcement by Fosun Pharmaceutical, in 2023, Fosun Kite achieved a revenue of 240 million yuan but incurred a net loss of 350 million yuan.

This controlling stake event also inevitably brings to mind a previous innovative drug asset of Fosun Pharmaceutical — Henlius. With the support of the Fosun Pharmaceutical Group, Henlius successfully ranked among the first group of innovative pharmaceutical companies to turn losses into profits.

In 2023, Henlius Biotech achieved a net profit of 546 million yuan, marking its first full-year profitability; in contrast, it incurred a loss of 695 million yuan in 2022. In June 2024, Fosun Pharmaceutical announced plans to privatize Henlius Biotech through an absorption merger.

As global healthcare companies pursue streamlining and focus, Fosun Pharmaceutical seems to have chosen a unique "all-encompassing" path. From the current scope of Fosun Pharmaceutical, it emphasizes an all-inclusive approach.

However, an increasing number of assets seem to have not positively impacted its performance.

In the first half of 2024, Fosun Pharmaceutical reported revenue of 20.463 billion yuan, a year-on-year decrease of 4.36% (excluding COVID-19 related products, revenue actually increased by 5.31% year-on-year). Additionally, the net profit attributable to shareholders was 1.225 billion yuan, a year-on-year decrease of 31.09%.

As of the closing on the 13th, the share price of Fosun Pharmaceutical fell by 0.76%, indicating that the market may only truly feel satisfied when performance improves.

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