Fermion Licenses Greater China Rights of Non-Addictive Nav1.8 Inhibitor FZ008-145 to Healthgenex, Achieving AI Biotech Commercial Closure

Recently,Guangzhou Fermion Technology Co., Ltd. (hereinafter referred to as "Fermion") andJoincare Pharmaceutical Group Industry Co., Ltd. (hereinafter referred to as"Joincare" signed an agreement to grant the exclusive rights of the company's self-developed new analgesic drug FZ008-145 in Greater China to the listed company Joincare.

The small molecule innovative drug FZ008-145 mentioned in the agreement is a highly selective second-generation Nav1.8 (voltage-gated sodium channel 1.8) inhibitor. FZ008-145 has the advantages of potent and non-addictive analgesia, and the Nav1.8 target has already obtained clinical data from five POC validations. In October this year, FZ008-145 submitted an IND application to the CDE.

Joincare Pharmaceutical Group Industry Co., Ltd. was founded in 1992. After years of steady operation and rapid development, it has now become an innovative research-oriented comprehensive pharmaceutical group. The group owns two large listed companies, Joincare and Livzon Pharmaceutical, as well as more than 20 major holding subsidiaries. Consistently, Joincare has adhered to technological innovation as its strategic cornerstone, with the dual-driven strategic goal of building platforms for innovative drugs and high-barrier complex formulation technologies. It has made extensive pipeline arrangements in areas with significant clinical needs such as respiratory, pain management, gastrointestinal, assisted reproduction, psychiatry, and oncology, forming a rich and diverse product matrix and pipeline of drugs under development. According to Frost & Sullivan data, Joincare ranked 6th in terms of revenue scale among comprehensive pharmaceutical enterprises in China in 2021, and ranked 5th in R&D investment, placing it at a relatively high level within the industry.

Fermion is an AI-driven small molecule innovative drug R&D company that began operations in 2019. It focuses on developing differentiated BIC/FIC products targeting early innovative targets in the central nervous system (CNS) and autoimmune fields, with the goal of becoming an AI and data-driven innovative drug R&D company. The company’s self-developed Drug Studio AI drug discovery platform has achieved industrial application by breaking through with ultra-high target selectivity and tissue targeting, establishing an integrated AI drug R&D solution. Since its establishment, Fermion has gained recognition and support from investment institutions such as Innovation Works, Eguang Venture Capital, Panda Capital, Challenger Venture Capital, Tongsheng Capital, iFlytek Venture Capital, and Zhengxuan Investment, accumulating hundreds of millions of yuan in financing.

Currently, Fermion has developed 13 small molecule drug pipelines focusing on ultra-high selectivity and tissue targeting. This year, two additional pipelines have been submitted for IND applications in both China and the U.S., with Phase I clinical trials expected to commence by the end of the year. The fastest progressing non-addictive chronic pain relief pipeline, FZ002, initiated Phase I clinical trials in March this year. It has already completed multiple dosing studies in the Phase I trial and is expected to enter Phase II Proof of Concept (POC) studies by the end of the year.

As one of the most common health issues today, chronic pain severely affects patients' quality of life and has been listed by the WHO as the fifth vital sign after blood pressure, heart rate, body temperature, and respiration. According to statistics from the International Association for the Study of Pain, one in five people worldwide has experienced chronic pain.

"Report on the Development of Pain Medicine in China (2020)" pointed out that more than 300 million people in China are suffering from chronic pain, and this number is increasing at a rate of 10 to 20 million per year. Pain has become the third major health issue following cardiovascular and cerebrovascular diseases and cancer. Despite the enormous scale of the pain-afflicted population, data released by China's National Health Commission shows that less than 10% of pain patients seek medical treatment. Moreover, the current supply of medical resources is far from sufficient to meet the needs of the vast number of pain patients.

The pathogenesis of chronic pain is relatively complex, leading to unsatisfactory efficacy of many treatment methods. Existing pain medications often have issues such as low tolerance, poor long-term safety, and potential drug abuse, with moderate to severe acute pain treatment relying heavily on opioid drugs.

In the United States, opioid analgesics have reached a precipice. Since 2016, the FDA has issued warnings restricting their use. According to data released by the FDA in 2018, 67,000 people died from drug abuse that year in the U.S., with 70% of cases related to opioid analgesics. Subsequently, companies like Johnson & Johnson and Purdue Pharma were sued by U.S. courts for "facilitating opioid addiction," with fines and settlement agreements amounting to hundreds of billions of dollars.

The abuse of opioid analgesics in China is also a significant concern. According to VCBeat, in 2019, seven out of the top ten best-selling analgesics in the market were opioids, with the remaining three being non-steroidal anti-inflammatory drugs (NSAIDs): aspirin, codeine with ibuprofen, and propacetamol hydrochloride. To date, although the use of opioids has decreased somewhat, they still dominate the market.

In the face of today's global opioid epidemic, there is an urgent need for an innovative non-opioid analgesic to address the opioid crisis in pain management and redefine the market landscape.According to data from VCBeat, the global pain medication market size was approximately USD 91.14 billion in 2022, while the market size of China's pain medication industry was about RMB 122.6 billion. The global market size of opioid pain medications that urgently need replacement is close to USD 20 billion.

With the rapid development of the AI pharmaceuticals industry, AI SaaS, AI CRO, and AI Biotech (selling software, services, and drug R&D) have become the three main business models for China's current AI + new drug enterprises.

Among these three business models, AI Biotech spans both the preclinical and clinical trial stages of drug development. Globally, new application scenarios for AI are emerging in areas such as formulation design, novel drug delivery systems, patient stratification in clinical trials, optimization of clinical trial design, prediction of clinical outcomes, virtual clinical trials, and real-world studies. Many industry experts predict that, in the future, both the exploration of AI technology applications and the development focus of AI-driven drug discovery companies will gradually extend into the regulatory preclinical research and clinical trial phases.

When many business models are still "groping for stones to cross the river," after exploring business models such as AI SaaS and AI CRO, in 2020, Fermion positioned itself as an AI Biotech. In multiple interviews, founder Dr. Deng Daiguo firmly stated, "The value of drug pipelines is relatively low in the early stages of new drug development, and their core commercial value is often obtained in the later stages. The nature of this industry dictates that one must engage in the backend to achieve maximum value."Now it seems that, with the completion of this License cooperation deal, Fermion AI Biotech model has achieved a commercial closed loop.

Innovative drug research and development is a systematic project, and there are still many fundamental scientific research challenges to be explored and resolved. Based on an understanding of unmet clinical needs, Fermion integrates the competitive landscape of specific disease areas with potential transaction prospects. By focusing on mining knowledge and data in targeted fields, Fermion leverages AI technology and aligns it more closely with commercial competition to build stronger core competitiveness. This approach represents Fermion’s primary consideration in initiating innovative drug projects and serves as a critical component in establishing its business model.

Therefore, unlike many companies currently focusing their drug R&D on the oncology field, Fermion, relying on its team and underlying algorithm foundation, has placed its drug R&D emphasis on the central nervous system (CNS) and autoimmune disease areas. Technologically, it leverages its self-developed Drug Studio AI drug discovery platform, using ultra-high target selectivity and tissue targeting as breakthroughs to actively develop differentiated BIC/FIC therapies. Among Fermion's multiple drug pipelines currently in development, more than four pipelines are focused on CNS, with the fastest-progressing non-addictive chronic pain pipeline FZ002 set to enter Phase II clinical POC (proof of concept) studies by the end of the year. It is expected to become the fastest-advancing AI Biotech in the global CNS new drug pipeline.

In May this year, the FDA published a 31-page discussion paper on the application of AI/ML (Artificial Intelligence/Machine Learning) in drug development and biologics, exploring the issues related to the use of AI/ML technology in pharmaceutical manufacturing. According to the FDA, AI/ML offers numerous opportunities for the pharmaceutical industry, such as process optimization and control, intelligent operation and maintenance, and trend monitoring for continuous process improvement. Moreover, AI/ML can pave the way for the introduction of Industry 4.0, creating a networked and digitized pharmaceutical value chain.

Nowadays, it is no longer questioned that AI/ML will play a key role in drug development. As AI Biotechs like Fermion gradually complete their business model闭环, the next critical step for AI pharmaceutical companies to continue writing "new history" lies in how to expand AI's application scenarios in drug development, smoothly advance pipelines, and enhance self-sustaining capabilities.