Despite Frequent Discontinuations of Drug Development Programs, Pharma Companies Remain Highly Committed to R&D

　　【Pharmaceutical Network Industry Dynamics] New drug development is a high-risk, low success rate technological innovation. This innovative process is long, complex, and involves significant risks. According to incomplete statistics, in the first half of this year, more than 15 companies worldwide have announced the termination of their R&D projects. Among them, large multinational pharmaceutical companies such as Biogen and AstraZeneca have both released news about terminating R&D projects or collaborations.
 

In the past month, several pharmaceutical companies both in China and abroad have decided to terminate development for various reasons. For example, on September 19, the biotechnology company Taysha Gene Therapies announced that, following receipt of the FDA’s Type C meeting feedback regarding the TSHA-120 registration pathway, the company will halt the development of TSHA-120, an intrathecal AAV9 gene therapy project aimed at treating Giant Axonal Neuropathy (GAN). Additionally, Taysha announced that Astellas has opted not to exercise the exclusive license option agreement for TSHA-120 between the two parties.
 

It is reported that on April 12, 2021, Taysha Gene Therapies, Inc. announced the acquisition of global exclusive rights to a clinical-stage AAV9 gene therapy program, now known as TSHA-120, for the treatment of Giant Axonal Neuropathy (GAN). TSHA-120 is an intrathecal injection AAV9 gene therapy that has previously received both Rare Pediatric Disease and Orphan Drug designations from the U.S. Food and Drug Administration (FDA) for the treatment of GAN. In November of last year, Astellas also made a $50 million equity investment in Taysha and expressed high hopes for its two candidate therapies targeting GAN and Rett Syndrome.
 

On the same evening, BeOne Medicines announced that its wholly indirect subsidiary, BeOne Medicines Switzerland, and Novartis had signed the "Mutual Termination and Release Agreement" to jointly terminate the licensing agreement. Tislelizumab is a PD-1 antibody independently developed by BeOne Medicines. It is reported that the collaboration between BeOne Medicines and Novartis on this product began in January 2021. At that time, BeOne Medicines granted Novartis the rights to develop, manufacture, and commercialize tislelizumab in North America, Europe, and Japan.
 

Regarding the reasons for the termination of this transaction, BeOne Medicines stated in the announcement that it was terminated by mutual agreement based on strategic considerations beneficial to both parties. However, BeOne Medicines also stated in the announcement that following the termination of the collaboration, Novartis can continue ongoing clinical trials and, upon obtaining consent from the company in the future, may conduct other combination therapy trials involving tislelizumab. BeOne Medicines has agreed to continue supplying tislelizumab for Novartis’ clinical trials to support their progress.
 

On August 25, it was reported that Novartis will terminate the development of the anti-tumor necrosis factor β antibody NIS793 and return it to Xoma Corporation. Following the termination of development, Novartis will halt all ongoing clinical trials of NIS793 but will continue to collect data after these studies are completed.
 

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Long cycles, high investment, and significant risks have always characterized new drug development. To cut losses in time, pharmaceutical companies in China and abroad often terminate research and development as a norm. However, it is important to note that despite frequent setbacks in innovation within the pharmaceutical industry, the enthusiasm for research and development continues to rise, with expenditures in this area still on an increasing trend.
 

In China, statistics show that in 2022, the total R&D investment of pharmaceutical listed companies exceeded 100 billion yuan, increasing by approximately 15% year-on-year. In the first half of 2023, according to disclosed mid-year reports, the R&D investment of pharmaceutical listed companies increased by about 18% year-on-year. Among them, the R&D investments of BeOne Medicines, Hengrui Medicine, and Mindray Medical were 5.882 billion yuan, 2.331 billion yuan, and 2.040 billion yuan, respectively. Additionally, the R&D investments of Kelun Pharmaceuticals, Changchun High & New Technology Industries, and Shanghai Pharmaceuticals in the first half of this year were all above 500 million yuan.
 

Disclaimer: Under no circumstances shall the information or opinions expressed in this article constitute investment advice to any person.