E-Week Pharma News: Hengrui Subsidiary Dissolved, Janssen Brand Retired, and National Volume-Based Procurement of High-Value Medical Devices Launched!

Sep 17, 2023 20:09 CST Updated 20:09

Johnson & Johnson

Medical Device R&D and Manufacturer

In the second week of September, the weather gradually turned cooler, and the capital winter seemed increasingly bleak.

Hengrui Medicine Suddenly Dissolves Subsidiary Rui Shi Bio, Another Blow for Many in the Pharmaceutical Industry Worried About Layoffs; Limitation on High Consumption Imposed on Stemirna Therapeutics and Founder Hangwen Li Makes Their Recent Announcement of Transitioning to CDMO Seem Like a Drowning Person Grasping at Straws...

The share placement by Innovent Biologics has cast a shadow over its prospects. According to the information disclosed in Innovent Biologics' semi-annual report for 2023, the company still has about 8 billion yuan in cash reserves on its books, so theoretically, it shouldn't need to conduct a "low-price share placement." This action either reflects a lack of confidence in the future stock price or a lack of confidence in the financing outlook, and the two are actually quite interrelated.

On September 14, the National Healthcare Security Administration announced the operation status of basic medical insurance and maternity insurance from January to July 2023. Among all indicators, the growth rate of expenditure far exceeded that of income. As the saying goes, "One cannot make bricks without straw." Against the backdrop of tight funding, the much-anticipated payment system reforms by innovative pharmaceutical companies are unlikely to occur.

What saddens many pharmaceutical professionals is that the Janssen brand will now become history: On September 14, Johnson & Johnson announced a brand update, under which its two major businesses—medical technology and pharmaceuticals—will be integrated under the Johnson & Johnson name. The pharmaceutical division, Janssen, will be renamed Johnson & Johnson Innovative Medicine, while the medical technology division will remain unchanged.

Before Janssen, other pharmaceutical brands like Wyeth and Schering also disappeared. Behind all these names lies an indelible pharmaceutical history.

What other major events happened this week?

Policy Updates

National Health Commission: Monkeypox to be Classified as a Category B Infectious Disease Starting September 20

On September 15, the National Health Commission announced that, according to the relevant provisions of the "Law of the People's Republic of China on the Prevention and Treatment of Infectious Diseases," monkeypox will be managed as a Class B infectious disease with corresponding prevention and control measures starting from September 20, 2023.

China's National Healthcare Security Administration Releases Operation Status of Basic Medical Insurance and Maternity Insurance from January to July 2023

On September 14, the National Healthcare Security Administration announced the operation status of basic medical insurance and maternity insurance from January to July 2023.

From January to July 2023, the total income of the basic medical insurance fund (including maternity insurance) was 1,861.16 billion yuan, representing a year-on-year increase of 8.8%. The income of the employee basic medical insurance fund (including maternity insurance) was 1,287.566 billion yuan, marking a year-on-year increase of 12.8%. The income of the urban and rural residents' basic medical insurance fund was 573.594 billion yuan, with a year-on-year increase of 0.9%. The total expenditure of the basic medical insurance fund (including maternity insurance) was 1,552.866 billion yuan, showing a year-on-year increase of 19.3%. The expenditure of the employee basic medical insurance fund (including maternity insurance) was 975.055 billion yuan, reflecting a year-on-year increase of 20.1%. The expenditure on benefits from the maternity insurance fund was 61.642 billion yuan. The expenditure of the urban and rural residents' basic medical insurance fund was 577.811 billion yuan, indicating a year-on-year increase of 17.9%.

The Fourth Round of National High-Value Medical Consumables Procurement Initiated

On September 14, the Joint Procurement Office for High-Value Medical Consumables of the National Organization announced that it would conduct a centralized bulk procurement of artificial crystal and sports medicine medical consumables organized by the state. The products involved in this centralized bulk procurement are artificial crystal and sports medicine medical consumables. Products made with additive manufacturing technology (i.e., 3D printing) can participate voluntarily. This indicates that the fourth round of national centralized procurement of high-value medical consumables is about to begin. Since 2020, the National Healthcare Security Administration has completed three rounds of national bulk procurement of high-value medical consumables, including coronary stents, orthopedic artificial joints, and orthopedic spinal consumables, with an average price reduction of over 80% after procurement.

National Healthcare Security Administration: By the end of 2023, the medical insurance fund will preliminarily achieve a "single network" of nationwide intelligent monitoring.

On September 13, the National Healthcare Security Administration issued the "Notice on Further Advancing the Intelligent Review and Monitoring of Medical Security Fund" (hereinafter referred to as the "Notice").

The Notice clarifies that by the end of 2023, all coordinated regions will launch the intelligent supervision subsystem. The data from intelligent review and monitoring will be accurately uploaded to the national medical insurance information platform. Comprehensive intelligent review by the handling agency will be carried out, standardizing the service behaviors of designated medical institutions. Efforts will be made to strengthen the connection between agreement handling and administrative supervision, as well as between handling verification and administrative law enforcement, initially achieving a unified "one-network" intelligent monitoring system across China.

Large Pharmaceutical

Johnson & Johnson Announces Brand Update

On September 14, Johnson & Johnson announced a brand update, under which its two major businesses—medical technology and pharmaceuticals—will be integrated under the Johnson & Johnson name. The pharmaceutical division, Janssen, will be renamed Johnson & Johnson Innovative Medicine, while the medical technology division will remain unchanged.

Huadong Medicine: Wholly-Owned Subsidiary Receives Clinical Trial Approval Notice for HDM1002 Tablets

On the evening of September 14, Huadong Medicine (000963) announced that its wholly-owned subsidiary, Sinopharm East-West, received the "Drug Clinical Trial Approval Notice" issued by the National Medical Products Administration (NMPA). The clinical trial application for HDM1002 tablets submitted by Sinopharm East-West has been approved. The drug is intended for weight management in overweight or obese populations.

HDM1002 tablets, a Class 1 new chemical drug independently developed by Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. with global intellectual property rights, are orally active small-molecule full agonists of the GLP-1 receptor. In May this year, the clinical trial application of HDM1002 tablets for the treatment of adult type 2 diabetes was successively approved by the NMPA and the U.S. FDA; in June, Zhongmei Huadong completed the submission of the clinical trial application for HDM1002 tablets to the CDE, and recently received approval from the NMPA, which agreed to conduct clinical trials of this product in adult patients with overweight/obesity.

Johnson & Johnson's Teclistamab Marketing Application Proposed for Priority Review

On September 13, the website of the Center for Drug Evaluation (CDE) under the China National Medical Products Administration (NMPA) announced that the marketing application for Teclistamab Injection submitted by Johnson & Johnson has been proposed for inclusion in the priority review. The proposed indication is: monotherapy for adult patients with relapsed or refractory multiple myeloma who have previously received at least three types of therapy (including a proteasome inhibitor, an immunomodulatory agent, and an anti-CD38 monoclonal antibody).

Public information shows that teclistamab is a "first-in-class" bispecific antibody therapy targeting BCMA and CD3. It has been approved for marketing in the EU and the United States, and has been included in the breakthrough therapy category in China for the treatment of adult patients with relapsed or refractory multiple myeloma. Overseas, teclistamab has received breakthrough therapy designation from the U.S. FDA for the treatment of multiple myeloma, and has been granted Priority Medicines (PRIME) status by the European Medicines Agency (EMA). The drug was approved for marketing in the EU and the U.S. in August and October 2022, respectively, for the treatment of adult patients with relapsed/refractory multiple myeloma.

Eli Lilly China Personnel Changes

On September 14, Eli Lilly China announced personnel changes in the Diabetes Division and Oncology Division. Effective October 1, Ping Yuan, the current acting head of the Diabetes Alliance Division, has been appointed as the National Executive Sales Director of the Diabetes Portfolio Division. Aihua Liu, the current head of the Oncology Portfolio Division, will take over as the head of the Diabetes Alliance Division. Both will report directly to Yifei Jiang, Vice President of Eli Lilly China's Diabetes Division.

Resignation of Vice General Manager of China Pharmaceutical

On September 13, China Pharmaceutical announced that the board of directors had received a written resignation report from Yuan Jinghua, who is stepping down as vice president: due to work adjustment reasons, Yuan Jinghua has applied to resign from the position of vice president of the company. As of the date of this announcement, Yuan Jinghua does not hold any shares of the company. After resigning as vice president, Yuan Jinghua will continue to serve as the company's board secretary.

CEO of Tong Ren Tang Chinese Medicine Departs

On the evening of September 12, Tong Ren Tang Chinese Medicine Company announced that Lin Man has resigned from her positions as executive director, chief operating officer, and member of the Executive Competition Committee due to personal matters. According to the rules of the Hong Kong Stock Exchange, the resignation took effect on September 12, 2023.

Biotechnology

Swell Medical and its founder Li Hangwen are restricted from high consumption

On September 14, the website of the Pudong New Area People's Court of Shanghai showed that in a sales contract dispute with Shanghai Duoning Biotechnology Co., Ltd., Siwei (Shanghai) Biotechnology Co., Ltd. ("Siwei Biotechnology" for short) failed to fulfill its payment obligations as stipulated in the enforcement notice within the designated period. As a result, Siwei Biotechnology and its legal representative, Li Hangwen, have been restricted from high consumption.

Hengrui Medicine Dissolves Subsidiary Rishawn Biotech

On the evening of September 14, market rumors claimed that Hengrui Medicine would completely dissolve its subsidiary, Rui Shi Biotechnology, and had "taken back the official seal, frozen the accounts, and compensated employees with N+1 severance." A media outlet confirmed the authenticity of this news with a service provider of Rui Shi Biotechnology.

Data shows that Reistone Biopharma was founded in 2018 as a non-wholly owned subsidiary of Hengrui Medicine, with an indirect shareholding ratio of 81.63%. The founder is Wang Min, and the chairman is Sun Piaoyang, who is also the chairman of Hengrui Medicine.

Ruishi Bio has a small scale, with only about a hundred employees, and its impact on Hengrui is limited. In addition, the new drug marketing application for its JAK1 inhibitor SHR0302 for ankylosing spondylitis has just been accepted, and the R&D of other indications is still proceeding normally, which is not expected to be affected.

In June this year, Rui Shi Bio submitted a marketing authorization application for SHR0302 (Imasitinib Sulfate Tablets) to the NMPA for the treatment of moderate to severe atopic dermatitis, which was accepted. In August, Hengrui Medicine announced, "Due to adjustments in the submission strategy, Rui Shi Bio voluntarily withdrew the drug registration application for this indication. The company will resubmit the application as soon as possible according to the adjusted plan."

Moderna Announces Successful Phase III Clinical Trial of Flu Vaccine mRNA-1010

On September 14, biopharmaceutical company Moderna Therapeutics announced that its flu vaccine mRNA-1010 produced a stronger immune response against four influenza viruses in Phase III clinical trials compared to traditional flu vaccines, providing support for its approval in the United States. In a separate study, the company found its vaccine to even outperform Sanofi's high-dose flu vaccine. Additionally, the most common side effects of mRNA-1010 were muscle pain, headache, fatigue, pain, and swelling, consistent with findings from previous trials.

Yuan Yi Biotech Introduces New Drug Filing for Over $260 Million

On September 14, the official website of the Center for Drug Evaluation (CDE) under the China National Medical Products Administration (NMPA) announced that Marinus Pharmaceuticals and Tenacia Biotechnology, among other companies, had submitted a new drug marketing application for ganaxolone oral suspension. Public information shows that ganaxolone is a positive allosteric modulator targeting GABAA receptors. Tenacia Biotechnology secured exclusive rights to develop and commercialize it in Greater China through a collaboration worth over $260 million. Recently, ganaxolone oral suspension has been proposed by the CDE for inclusion in the priority review process to treat seizures in patients aged 2 years and above with cyclin-dependent kinase-like 5 (CDKL5) deficiency disorder (CDD).

In November 2022, Yuan Yi Biotech reached a collaboration with Marinus, obtaining exclusive rights to develop and commercialize certain ganaxolone formulations in mainland China, Hong Kong, Macao, and Taiwan, including oral and intravenous formulations, as well as the first negotiation rights for future next-generation formulations or prodrugs. Under the agreement, Marinus will receive a $10 million upfront payment and is eligible for up to $256 million in development, regulatory, and commercialization milestone payments, along with tiered double-digit royalties on net sales in China.

NMPA Approves Clinical Trial of Norovate SHP2 Inhibitor ICP-189 in Combination with EGFR Inhibitor Furmonertinib

On September 14, biopharmaceutical high-tech company InnoCare announced that the clinical trial of ICP-189, a novel allosteric inhibitor of protein tyrosine phosphatase SHP2, in combination with furmonertinib, an oral EGFR kinase inhibitor targeting epidermal growth factor receptor (EGFR) mutations, has been approved for commencement in China. ICP-189 is a highly selective oral SHP2 allosteric inhibitor developed by InnoCare for the treatment of solid tumors, which can be used as a monotherapy or in combination with other anti-cancer drugs. In the dose escalation study, the dose has been increased to 120 mg without observing dose-limiting toxicity (DLT), demonstrating favorable PK and safety. Initial efficacy was observed in ICP-189 monotherapy, with one cervical cancer patient showing partial response in the 20 mg dose cohort.

Haisco Submits New Drug Application for Neuropathic Pain with New Indication

On September 13, the latest announcement on the official website of the Center for Drug Evaluation (CDE) of the China National Medical Products Administration revealed that Haisco Pharmaceutical's new neuropathic pain drug, HSK16149 capsule, has submitted a new indication for marketing authorization and received acceptance. According to Haisco’s 2023 semi-annual report, HSK16149 had already filed a new drug marketing application for the indication of "diabetic peripheral neuropathic pain." The Phase 3 clinical trial for the indication of "postherpetic neuralgia" has been completed, and the marketing application will be submitted soon.

According to the China Drug Clinical Trial Registration and Information Disclosure Platform, Haisco has completed several clinical trials of HSK16149. One of them is a Phase 3, multicenter, randomized, double-blind, placebo-controlled parallel study evaluating the efficacy and safety of HSK16149 capsules in treating Chinese patients with postherpetic neuralgia.

IMPACT Pharma's PARP1 Inhibitor Approved for Clinical Trials in the United States

On September 12, InnoPax Pharma announced that IMP1734, a PARP1 selective inhibitor independently researched and discovered by the company and co-developed with Eikon Therapeutics, has received clinical trial approval from the U.S. FDA and will commence Phase 1 clinical research in the fourth quarter of 2023.

In June this year, Impulse Therapeutics and Eikon Therapeutics jointly announced that they had entered into an exclusive licensing and cooperation agreement regarding IMP1734 and other PARP1 selective inhibitors. According to the agreement, Eikon has obtained exclusive rights for development, production, and commercialization in all regions outside of Greater China.

According to the press release from Impella Pharma, the Phase 1 clinical study of IMP1734 is expected to be launched in the fourth quarter of 2023 in the United States and other regions. Additionally, Impella Pharma and Eikon Therapeutics have planned to initiate an IND-enabling study for a brain-penetrant PARP1 candidate compound, which will proceed to Phase 1 clinical trials upon completion of the study and review.

Livzon Pharmaceutical Antipsychotic Drug Submission for Market Approval

On September 12, the official website of the Center for Drug Evaluation (CDE) under the China National Medical Products Administration (NMPA) announced that the marketing application for injectable aripiprazole microspheres submitted by Livzon Microspheres, a wholly-owned subsidiary of Livzon Pharmaceutical, has been accepted. According to an earlier press release from Livzon Pharmaceutical, injectable aripiprazole microspheres are mainly used for treating adult schizophrenia and are administered once a month.

Aripiprazole is a novel atypical antipsychotic drug primarily used to treat mental illnesses such as schizophrenia. It is a partial agonist of the D2 and 5-HT1A receptors and an antagonist of the 5-HT2A receptor, offering advantages such as minimal side effects, significant efficacy, and a low relapse rate, making it suitable for the long-term, full-course treatment of patients with schizophrenia. Livzon Microspheres' injectable Aripiprazole microsphere is a long-acting sustained-release formulation of Aripiprazole, administered once a month. For the common issue of schizophrenia patients being averse to taking medication, long-acting injectables can reduce dosing frequency and improve patient compliance.

According to the China Drug Clinical Trial Registration and Information Disclosure Platform, Lijun Microparticle's injectable aripiprazole microsphere has completed two Phase 1 clinical trials. One of them is a pharmacokinetic comparative clinical study in Chinese patients with schizophrenia, involving multiple doses, different dosing intervals, and repeated administrations of the product compared with long-acting aripiprazole microcrystals. The other is a multicenter, open-label clinical study evaluating the pharmacokinetic profile, safety, and tolerability of the product after single-dose administration in Chinese patients with schizophrenia.

Capital Market

Dialab Completes Nearly 100 Million Yuan in Series A Financing

Recently, DiaLabs (Zhangjiagang) Biotechnology Co., Ltd. ("DiaLabs" for short) announced the completion of a nearly RMB 100 million Series A strategic financing. This round of financing was led by Yangtze River Guohong, with participation from Shulan Junjie Capital, Zhangjiagang Jinfeng Venture Capital, Zhangjiagang Talent No. 1 Fund, and Zhangjiagang Wisdom Venture Capital. The funds raised will be used for new product development, capacity enhancement, and the acceleration of clinical trials, providing strong support for offering comprehensive laboratory testing projects for autoimmune and neurological diseases in clinical settings, as well as realizing its internationalization strategy.

Dialab was founded in 2016 and is dedicated to the research and development of laboratory testing products for autoimmune and neurological diseases. With research and development centers located in Shanghai and Zhangjiagang, Jiangsu, it is one of the few manufacturers in China that master the core materials and technologies for laboratory testing products of autoantibodies and neurological markers.

Innovent's STAR Market IPO Application Approved; Sinopharm Group May Add Another Listed Company

On September 14, Innostar's Sci-Tech Innovation Board IPO application was approved.

Innost was established in 2010 as a holding subsidiary of China State Institute of Pharmaceutical Industry Co., Ltd., under the Sinopharm Group. In 2017, Innost completed its shareholding reform and officially founded Shanghai Innost Biotechnology Co., Ltd. As a Contract Research Organization (CRO) primarily providing non-clinical research services for biopharmaceuticals, its main procurement item is experimental monkeys.

This also means that China National Pharmaceutical Group (Sinopharm) will own ten listed companies, including three major distribution listed companies—Sinopharm Holding, Sinopharm一致, and Sinopharm股份—two leading traditional Chinese medicine listed companies, China中药 and太极集团, two blood product companies,天坛生物 and卫光生物, as well as现代制药, a leading chemical pharmaceutical industrial listed company, and九强生物, a leader in the in vitro diagnostics sector. On this basis, it will soon extend to益诺思, a leading listed company in the CRO field.

Innovent Biologics Plans to Place 68 Million New Shares, Raising Approximately HKD 2.3568 Billion Net

On September 12, Innovent Biologics announced that the company plans to place 68 million new shares with no fewer than six placees through a placing agent, representing approximately 4.22% of the enlarged share capital. The placement price is HK$34.92 per share, marking a discount of approximately 8.83% compared to the closing price of HK$38.30 per share on September 11, 2023. Assuming all placement shares are fully placed and subscribed, the company will raise approximately HK$2.3746 billion, with net proceeds of about HK$2.3568 billion. Of this, around 60% will be used to accelerate the R&D of multiple prioritized preclinical and clinical programs in the global pipeline, including but not limited to conducting multi-regional clinical trials, as well as building global infrastructure and facilities; approximately 30% will be allocated for the development, marketing, and commercialization of IBI362 (Mazdutide), a GLP-1R/GCGR dual agonist for treating diabetes and obesity, and a potential best-in-class clinical-stage drug candidate.

Risk Warning

Changyao Holdings Receives Warning Letter from Shandong Securities Regulatory Bureau

Changjiang Pharmaceutical Holding Co., Ltd. (300391.SZ) received the "Decision on Issuing a Warning Letter to Changjiang Pharmaceutical Holding Co., Ltd. and Li Jinfeng, Luo Ming, Ning Luhong" (【2023】72) from the Shandong Regulatory Bureau of the China Securities Regulatory Commission on September 13, 2023.

Changyao Holdings' announcement revealed that the company had violations in information disclosure from 2022 to 2023: 1. Failure to disclose significant litigation and arbitration matters in a timely manner as required; 2. Failure to disclose significant overdue debt matters in a timely manner as required. Specifically, these include: Between May 20, 2021, and May 9, 2023, the company was involved in 25 litigation and arbitration cases. As of April 2, 2022, the company had reached the temporary report disclosure threshold for significant litigation and arbitration matters but failed to disclose it promptly. In 2023, the company had significant debts that were due and unpaid, with a total amount exceeding 20% of the absolute value of the company's most recent audited net assets (equity attributable to parent company shareholders), and the company did not fulfill its information disclosure obligations in a timely manner.

On the 31st of last month, the Shenzhen Stock Exchange also sent a semi-annual report inquiry letter to Changyao Holdings, requesting an explanation regarding whether the company's provision for bad debts on accounts receivable is reasonable and sufficient, and whether there is any situation of regulating the company's profits through the provision for bad debts. Public information shows that the company's director and general manager, Luo Ming, has been listed as a dishonest executor by the court.

"New Compliance Observer" believes that: The CSRC and other capital market regulatory authorities emphasize that the capital market is an information market, and the authenticity, accuracy, completeness, timeliness, and fairness of information disclosure are the basis for investors' decision-making and an important foundation for the healthy development of the capital market. Damaging the "Three Publics" principles of the capital market and the legitimate rights and interests of investors is a key focus of securities regulation and enforcement.

All companies, controlling shareholders, actual controllers, directors, supervisors, senior management personnel, and other "key few" should learn, respect, and abide by the law, providing investors with a public, transparent, authentic, and credible publicly-listed company.

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