Behind the Patient Rush: Where Is China's Radiopharmaceutical Industry Getting Stuck?

"No investment in nuclear medicine, the bubble is too big."

In the circle of pharmaceutical investors, radiopharmaceuticals hold a unique position. People have clear-cut attitudes and opposing views towards them. Proponents of radiopharmaceuticals believe that this miracle drug, capable of extending the lives of cancer patients, has definitive clinical value and immense commercial potential—everything is in place, except for the final push. However, in the eyes of those who are skeptical, all of this is merely an illusion, as the barriers to utilizing radiopharmaceuticals are too high, making them unsuitable for commercial promotion.

Accompanied by these two conflicting viewpoints, the high热度 of the nuclear medicine track has lasted for more than two years. A small portion of 2024 has just passed, and already six domestic nuclear medicine innovation companies in China have completed financing. In the current environment where funding is not宽松, limited resources are being concentrated into nuclear medicine, demonstrating the resilience of this industry, with many people persisting in it.

Perhaps, the traditional pharmaceutical investment logic and narrative framework do not apply to radiopharmaceuticals. Faced with this highly complex field, people have drawn vastly different conclusions based on their respective knowledge reserves, and everyone is still feeling their way across the river.

In China, the concept of nuclear medicine has almost become popular alongside the launch and commercial success of Pluvicto.

In March 2022, Pluvicto, a therapeutic radiopharmaceutical from Novartis, was approved by the FDA for marketing. It is used to treat patients with PSMA-positive mCRPC (metastatic castration-resistant prostate cancer) and has become the world’s first PSMA-targeted radioligand therapy. Unlike traditional tumor drugs, the active ingredient in Pluvicto affects cancer cells in different locations, not only combating primary tumors but also metastatic cancer cells, and it was quickly applied in clinical practice.

Pluvicto's commercial momentum is astonishing. In its first year on the market, Pluvicto achieved $270 million in sales. By 2023, Pluvicto's total sales reached $980 million, a year-over-year increase of 261%, bringing it to the brink of becoming a blockbuster drug. Notably, as a groundbreaking ADC drug, Enhertu only generated $200 million in sales in its debut year of 2020, and the following year, sales expanded to just $426 million. Due to overwhelming patient demand, Pluvicto's production capacity fell short, forcing Novartis to even halt the recruitment of new patients for Pluvicto.

Pluvicto is a radiopharmaceutical conjugate (RDC), also known as targeted nuclear medicine, and has been a research and development hotspot in the field of nuclear medicine in recent years. According to statistics from the VCBeat database, there are over 6,000 ongoing clinical studies of RDC drugs worldwide. An RDC consists of a targeting ligand, a linker, and a medical isotope. Among these, the medical isotope serves as the active ingredient of the RDC drug. Inside the body, the medical isotope can directly kill tumor cells or act on tumor stromal cells. When the latter are irradiated by the isotope, they become damaged or die, ceasing to provide nutrients to the tumor cells, thereby indirectly killing the tumor cells.

After long-term clinical trials, at this stage, there are already various medical isotopes applied clinically worldwide. In addition to Lu-177, which is used in two marketed RDC drugs, I-131 is utilized for treating hyperthyroidism, non-Hodgkin lymphoma, colorectal cancer, prostate cancer, etc., making it the most classical medical isotope. Y-90 is used for non-Hodgkin lymphoma, prostate cancer, gastrointestinal tumors, and more, and is currently one of the more popular medical isotopes. Additionally, Lu-177 is also being explored for indications such as melanoma and ovarian cancer.

Earlier, due to the difficulty in controlling the targeted accumulation of radiopharmaceutical isotopes within the body, the application of nuclear medicine therapies in clinical settings was very limited, benefiting only a small number of patients. With the advancement of drug conjugation technology, small molecules, antibodies, peptides, and other targeting carriers can now be used to deliver specific medical isotopes to desired locations for visualizing or destroying tumor cells. After 2016, 11 RDC drugs were successively approved for marketing worldwide. However, apart from Novartis' Lutathera and Pluvicto, all newly marketed RDCs are diagnostic radiopharmaceuticals.

Compared with therapeutic radiopharmaceuticals, the ceiling of diagnostic radiopharmaceuticals is not high enough to attract investors and entrepreneurs. Therefore, prior to the launch of Pluvicto in 2022, there were few radiopharmaceutical projects in China that received financing. However, in the past two years, under the clustering of capital, the radiopharmaceutical field has frequently seen large-scale financing. In this process, innovative radiopharmaceutical companies such as Beijing Xiantong International Technology Co., Ltd., SmartNuclide Biotech, NuLink Pharmaceuticals, Aprinoia Therapeutics, and Full-Life Technologies have become highly sought-after star projects.

Among them, Beijing Xiantong International Technology Co., Ltd. completed a new round of financing exceeding 1.1 billion yuan in July 2023, setting a record for venture capital investment in nuclear medicine in China. Meanwhile, companies such as Huiheng Medicine and NeuriTech Medical have secured over 100 million yuan in early-stage funding rounds, demonstrating the significant attention this sector is receiving from investors. Notably, institutions that are taking the lead in investing in innovative domestic nuclear medicines include top-tier professional investment firms like Sequoia Capital China, Qiming Venture Partners, and Vivo Capital, as well as major pharmaceutical companies that already hold a certain market share. For instance, Dongcheng Pharmaceutical participated in the Series C financing of Sinopsych Pharmaceuticals. Additionally, at the end of 2022, Dongcheng Pharmaceutical acquired the clinical trial approval and research data of Sinopsych's 18F-APN-1607 and obtained exclusive rights to clinically develop, manufacture, and market the product in mainland China. By December 2023, Dongcheng announced the early completion of full patient enrollment for the Phase 3 clinical trial of 18F-APN-1607, with subsequent steps including clinical summary and marketing application.

Medical institutions in China have been conducting radionuclide therapy for a considerable period of time, but this seemingly mysterious treatment approach has remained relatively niche. According to statistics, in 2019, there were 770 nuclear medicine departments across the country carrying out radionuclide therapy, providing over 2,500 radionuclide therapy beds, mainly for the treatment of thyroid diseases and bone metastatic cancer.

Driven by capital, an increasing number of patients are beginning to have access to nuclear medicine. Starting from early 2023, patients with liver cancer, liver metastases from colorectal cancer, neuroendocrine tumors, and others in a few major hospitals in first-tier cities can participate in nuclear medicine clinical trials as a treatment option after exhausting all other available therapies. Previously, reporters visiting hospitals in Yangtze River Delta cities such as Zhejiang Cancer Hospital, the First Affiliated Hospital of Zhejiang University, and the Second Affiliated Hospital of Zhejiang University found that in recent years, the number of patients utilizing nuclear medicine treatments has been growing at an average annual rate of about 10%. For patients entering the terminal stage of their illness, nuclear medicine has brought new hope. Patients continue to benefit from nuclear medicine: for instance, a prostate cancer patient with bone metastases regained the ability to move independently after receiving nuclear medicine treatment following chemotherapy resistance. In another case, a patient with gastric neuroendocrine tumor underwent targeted nuclear medicine therapy after distant metastasis of cancer cells, resulting in the near-complete disappearance of tumor cells and normalized blood parameters. "Patients waiting to receive nuclear medicine treatment are consistently lining up," one doctor noted.

For China's nuclear medicine innovation companies still in the continuous investment phase, the influx of capital is undoubtedly a positive development. However, the ability to remain calm while competing for shares in popular projects and to screen out projects with sufficiently high cost-performance ratios is a true test of investors' professional capabilities.

In sharp contrast to the bustling investment and financing market, the clinical trials of innovative nuclear medicine in China are not particularly active.

VCBeat's analysis of China's radiopharmaceutical R&D pipeline reveals that there are not many radiopharmaceutical projects by domestic companies that have entered the clinical trial stage, and most of them are for diagnostic purposes using molecular functional imaging. Additionally, there are very few therapeutic radiopharmaceutical projects. Within China’s radiopharmaceutical R&D pipeline, the medical radionuclides, targeting carriers, and selected indications are mostly similar to those of radiopharmaceuticals approved abroad. However, we have also observed that the level of innovation in China’s radiopharmaceuticals is gradually increasing over time.

At the 8th VBEF Future Healthcare Ecosystem Exhibition held in early May 2024, Yuan Dawei, founder of Quark Medicine, a leading CRO company specializing in providing clinical research services for radiopharmaceuticals, stated that globally, the number of radiopharmaceutical projects newly entering preclinical and Phase I and II clinical trials far exceeds those in Phase III clinical research. With numerous companies entering the field, a wave of radiopharmaceutical development is underway. Extensive research on novel radionuclides, new targets, innovative carriers/ligands, new diagnostic applications, and new therapeutic applications also indicates that breakthrough achievements in radiopharmaceuticals will soon follow.

"In the following years, we will see domestic companies gradually establish a nuclear medicine R&D pipeline with higher innovative characteristics," said Da Wei Yuan. Compared with non-nuclear medicine projects, nuclear medicine has the characteristic of 'what you see is what you treat.' Its drugability can be assessed early through microdose IIT studies and potential real-world application data. Therefore, most nuclear medicine projects entering registrational clinical research generally have high drugability. For nuclear medicine projects advancing to later-stage clinical trials, the likelihood of final regulatory approval is also relatively high, "basically reaching over 70%."

Moreover, the pace of pushing relatively mature pipelines to clinical applications in China's nuclear medicine industry is not particularly fast.

At present, there is still a significant gap in the conditions for nuclear medicine treatment between China and abroad. The most popular targeted radiopharmaceuticals have yet to be commercialized in China. Notably, during the recent years of rapid improvement in China's medical standards, other types of drugs such as bispecific antibodies, ADCs, and cell therapies have achieved synchronized innovation or even surpassed global standards, becoming important driving forces. For the majority of patients in China, their first exposure to radiopharmaceuticals was through the introduction of Yttrium [90Y] Microsphere Injection by Grand Pharmaceutical, which was approved in China in 2022 for treating patients with colorectal cancer liver metastasis. Additionally, the Yttrium [90Y] Carbon Microsphere Injection independently developed by Neureka Medical has entered Phase I clinical trials in China for the treatment of primary and metastatic liver cancer. However, overseas, the clinical and commercial application of Yttrium [90Y] has exceeded 20 years.

An interesting phenomenon is that, despite the insufficient capacity of medical isotopes in China often being cited as the top limiting factor when discussing the industrialization threshold of nuclear medicine, some professionals in the field have stated that, objectively speaking, the current supply capacity of medical isotopes in China is sufficient to meet the clinical application and development needs of nuclear medicine. This reflects an awkward reality: the development of therapeutic nuclear medicines in China is still at a very early stage. According to statistics from the VCBeat database, overseas there are over 7,000 nuclear medicine pipelines entering clinical trials, while domestically, the corresponding number is less than 100.

China-produced nuclear medicine seems to have fallen into a dilemma, with a large amount of funding pouring in but failing to drive innovation in clinical applications. Meanwhile, domestic nuclear medicine innovation companies have been established for at least 3 to 5 years, and some even over 10 years, and should be in the sprint phase of product development.

At the same time, the global nuclear medicine market has entered a stage of intense competition, with ecosystem cooperation being adopted by most pharmaceutical companies as an advantageous strategy. Previously, Novartis spent $6 billion acquiring two biotech companies specializing in nuclear medicine, establishing and expanding its radioligand therapy platform and gaining two revolutionary nuclear medicines, Lutathera and Pluvicto. Since then, news of collaborations between multinational corporations (MNCs) and innovative nuclear medicine companies has been frequent. Behind this trend of ecosystem cooperation lies the increasing pressure among major pharmaceutical companies to compete for shares in the nuclear medicine market, driving the industry to adopt a relay-like innovation model. Pharmaceutical companies with different resource endowments are fulfilling their respective roles to minimize trial-and-error time in nuclear drug development. The time left for China's innovative nuclear medicine sector is limited.

Behind the insufficient pipeline of innovative nuclear medicines in China, nuclear medicine companies have spent a significant amount of time and effort on areas outside the development of nuclear medicines.

First, obtaining legal qualifications is a complicated process. Due to the unique nature of its raw materials, the nuclear medicine industry in China is subject to much stricter and more complex regulations than ordinary pharmaceuticals. Companies involved in the development, production, and sales of radiopharmaceuticals face rigorous oversight from multiple regulatory bodies, including the National Nuclear Safety Administration, the Ministry of Public Security, the National Health Commission, the General Administration of Customs, the Ministry of Transport, the Civil Aviation Administration of China, and the State Administration of Science, Technology, and Industry for National Defense. This oversight covers various aspects such as the registration and application of radiopharmaceuticals and medical devices, the use of isotopes, radioactive sources, and radiation equipment, as well as the recycling and reuse of radioactive materials and environmental protection. As a result, innovative companies in the radiopharmaceutical sector have numerous administrative tasks to complete.

Previously, a radiopharmaceutical practitioner told the media that in the first few years of entrepreneurship, they were consistently engaged in compliance work—from facilities to raw materials and personnel, every link involved qualifications. "In many areas, there are no professional third parties providing outsourcing services; almost all qualifications have to be obtained independently." However, overall, the pace of regulatory innovation for radiopharmaceuticals in China has notably accelerated. The CDE has established a specialized team for reviewing radiopharmaceuticals and gradually decentralized the approval authority for radioactive site qualifications. The regulatory environment for radiopharmaceuticals continues to improve.

Secondly, capacity building. The most important raw material for nuclear medicine, medical isotopes, is mainly obtained through irradiation in reactors or accelerators, followed by a series of radiochemical separation methods. Among these, reactor irradiation is the most important method for obtaining medical isotopes, accounting for over 80% of all types of medical isotopes. Commonly used medical isotopes such as 99Mo/99mTc, I-131, Sr-89, Lu-177, Y-90, and C-14 are all obtained through reactor irradiation. However, due to various reasons, except for a small amount of I-131 and Lu-177, most medical isotopes obtained through reactor irradiation in China rely on imports, leading to low stability in the supply chain.

The "Medium- and Long-term Development Plan for Medical Isotopes (2021-2035)" released in June 2021 has promoted the enhancement of China's self-sufficient supply capacity of medical isotopes. In particular, the completion of medical isotope production facilities at the Qinshan Nuclear Power Plant, Jiacheng Reactor, and Mianyang Reactor has broken the bottleneck in the preparation and supply of medical isotopes during the development of radiopharmaceuticals. Yuan Dawei pointed out that as a major country in nuclear technology research and application, with the realization of self-sufficiency in medical isotopes, China's radiopharmaceuticals industry (from the preparation of medical isotopes, pharmaceutical research on radiopharmaceutical formulations, preclinical and clinical studies, to the application of radiopharmaceuticals in clinical diagnosis and treatment) has formed a complete closed loop.

Driven by policy and industry demand, some nuclear medicine companies are also attempting to build internal production capacity. However, the preparation of medical isotopes involves complex nuclear technologies, such as radiotracer technology, radioisotope separation, analysis, and measurement techniques, which require companies to have significant experience in nuclear medicine and qualified nuclear technology professionals, posing a considerable challenge for innovative nuclear medicine enterprises.

In addition, apart from the domestic production and supply of medical isotopes, nuclear medicine enterprises in China are also building a production and application network tailored to the unique characteristics of nuclear medicine in certain specialized areas of the industry (including the transportation and usage of medical isotopes). Throughout the preparation, distribution, and use of nuclear medicine, the physical decay of the isotopes continues uninterrupted. Therefore, "a carefully designed network system between the production site and hospitals is essential," said Yuan Dawei. "If we compare the production facilities for radioactive isotopes, such as reactors, to a 'mother cow,' then regional pharmaceutical research and preparation laboratories would be akin to 'milk stations.' The isotopes are transported from the 'mother cow' to the 'milk station,' where they are processed into nuclear medicine and then delivered to medical institutions. This is a distinctive feature of the nuclear medicine industry, and every step must be precisely managed."

For example, the most widely used clinical Positron Emission Tomography (PET) technology currently employs the medical isotope F-18, which has a half-life of less than 2 hours. Conventional production and transportation methods struggle to meet the activity requirements of PET technology, typically necessitating that a cyclotron be located within or adjacent to the PET center. Of course, different medical isotopes have varying half-lives, but the clinical application of radiopharmaceuticals relies on specialized transportation and distribution networks. This requires radiopharmaceutical companies to establish corresponding radiopharmacies while developing their product pipelines. In the current industrial ecosystem, radiopharmacies often can only be self-built.

In a sense, nuclear medicine developers are fighting alone. However, the widespread application of any new drug relies on a certain ecosystem. Only when all parts of the industry chain work together can there be良性 development and efficient circulation. This is especially true for nuclear medicine.

Between the billion-dollar narrative and reality of nuclear medicine lies an immature industrial ecosystem. From qualification regulation, raw material production to clinical application, the factors restricting the value of nuclear medicine are no longer the nuclear medicine itself.