Pharma Industry Quarterly Highlights: Over 60% of Companies Report Strong Q3 Earnings, GSK’s Dual HIV Therapy Approved, and NMPA Releases Reference List for Generic Drugs

Highlights:

1.Policy: Expert Review Interim Results Announced; "20th Congress" Promotes Continuous Development of Pharmaceuticals; National Healthcare Security Administration Affirms Positive Role of "Two-Invoice System"

2. Market Dynamics: 14 pharmaceutical BD deals; significant decrease in license-in projects, Wuxi Juno introduces the latest "T-cell immunotherapy" project;

3. Investment and Financing: Global financing events have plummeted, with only 15 new drug financing projects in China;

4. Pipeline: AstraZeneca's anti-CTLA-4 monoclonal antibody approved for marketing; Lilly's remternetug clinical trial application accepted;

5. Major Corporate Event: Lilly's Significant Weight-Loss Drug Tirzepatide Enters FDA Fast Track;

Policy Pharmaceutical News

Twenty Key "Medicine" Points to Drive Sustainable Development in the Pharmaceutical Industry

On October 16, the 20th National Congress of the Communist Party of China opened in Beijing. In the report, Xi Jinping emphasized the importance of improving people's wellbeing and enhancing the quality of life, and proposed multiple initiatives for support in the pharmaceutical sector.

• Expand the coverage of social insurance, and improve the financing and benefit adjustment mechanisms for basic pension and basic medical insurance, etc.;

  
  

• Deepen the reform of the medical and health system, and promote the coordinated development and governance of medical insurance, medical services, and pharmaceuticals;

  
  

• Promote the orderly connection of multi-layer medical security, improve the serious illness insurance and medical assistance system, and implement the settlement of medical treatment in other places, etc.;

  
  

• Establish public hospital reforms oriented towards public welfare and standardize the development of private hospitals.

  
  

• Promote the inheritance and innovative development of traditional Chinese medicine, innovate the coordination and integration mechanisms of medical prevention, and improve the public health system.

Results of Expert Review for Adjustment of Medical Insurance Catalog Released

On October 16, the National Healthcare Security Administration announced the "Preliminary Expert Review Results of the 2022 National Healthcare Security Drug Catalog Adjustment through Formal Examination," marking the conclusion of the expert review phase and the completion of more than half of the healthcare security catalog adjustment process.

Notably, the review results are mainly divided into four categories: proposed new negotiations, proposed new bidding, proposed negotiation renewals, and proposed simplified renewals.

NHSA Positively Responds to the Proposal of "Abolishing the Two-Invoice System"

On October 12, the National Healthcare Security Administration released the "Response Letter to Proposal No. 04377 of the Fifth Session of the 13th National Committee of the Chinese People's Political Consultative Conference," providing a response to the proposal on abolishing the "two-invoice system" for drug and consumable procurement in medical institutions. The reply affirmed the role of the "two-invoice system" in regulating the drug distribution market and stated that currently, a large number of varieties are still not covered by the new centralized procurement system. Additionally, some innovative products with insufficient competition and exclusive products cannot be included in bulk purchasing under the centralized procurement scheme. Therefore, the "two-invoice system" can still play an important role.

Moreover, the next step for the National Healthcare Security Administration will be to further expand the coverage of centralized procurement products, improve the price formation mechanism for listed drugs, and establish a sound market-driven price discovery mechanism, among others. The "two-invoice system" will be considered in conjunction with related reform policies.

"Guidelines for the Review of Clinical Trial Protocols for Drugs (Draft for Comments)" Released

On October 27, the Center for Drug Evaluation of the National Medical Products Administration released the "Work Specifications for the Review of Clinical Trial Protocols (Draft for Comments)."

It was clearly stated that, according to the Regulations on Communication and Exchange of Drug Research and Development and Technical Review, applicants should, in principle, submit a communication and exchange application to the Center for Drug Evaluation before the first clinical trial application for a new drug. This includes materials such as the overall clinical development plan, a complete first clinical trial protocol, a risk management plan, etc., and specifies the issues proposed for discussion.

Market Dynamics

BD Transactions Drop Significantly, Project Scarcity Becomes Inevitable

According to incomplete statistics, there were a total of 14 pharmaceutical BD transactions in China in October, including 5 cross-border asset purchases, 4 cross-border asset sales, and 5 domestic transactions within China.

After experiencing a boom in BD transactions both domestically and overseas in the past few years, the number of pharmaceutical deals, especially license-in projects, has significantly decreased. This decline is due to the impact of the COVID-19 pandemic on one hand, and a shift in the capital market's attitude towards licensed-in pipelines on the other.

Data Source: Yaoke Investment and Financing Database

Tablet

Data Source: Yaoke Investment and Financing Database

1. JW Therapeutics and 2seventybio Announce Strategic Collaboration to Accelerate the Development of T-Cell Immunotherapy

On October 27, WuXi AppTec and 2seventybio announced a strategic partnership. The two parties will establish a translational and clinical development platform for cell therapy, accelerating the development of T-cell immunotherapy products in mainland China, Hong Kong, and Macao.

Under the terms of the agreement, 2seventy will grant JW Therapeutics the rights to carry out the MAGE-A4 cell therapy program in mainland China, Hong Kong, and Macau. JW Therapeutics will be responsible for its development, manufacturing, and commercialization in China, and 2seventy is entitled to receive milestone payments and royalties based on product revenue.

$216.2 Million! IASO Biotherapeutics and Cabaletta Bio Reach Global Licensing Agreement

On October 11, Ixotech and Cabaletta Bio jointly announced that Ixotech granted Cabaletta the exclusive global rights for development, production, and commercialization of its clinically validated fully human CD19 sequence, to be applied in Cabaletta's development of modified T-cell products in the field of autoimmune diseases.

Cabaletta Bio will be eligible to receive upfront payments of up to approximately US$162 million for up to two products, as well as potential development and commercialization milestone payments and sales royalties. Cabaletta Bio has the priority to develop and commercialize products using the licensed sequences in Greater China.

Investment and Financing

Notably, in October, among the 15 new drug financings in China, the proportion of chemical drugs and biopharmaceutical R&D outsourcing decreased significantly, while financing in the biologic new drug sector took an overwhelming lead. From this perspective, at least among innovative companies, the majority clearly favor the biologics field, leaving small molecules decidedly overshadowed.

Data source: Yaoke Investment and Financing Database

$50 Million! Astellas Invests in Gene Therapy Company

On October 25, Astellas and Taysha Gene Therapies announced that they had reached a strategic investment to advance the development of Taysha's two adeno-associated virus (AAV) gene therapies targeting central nervous system (CNS) genetic disorders.

$1.7 Billion! Sumitomo Pharma Completes Acquisition of Myovant from Roivant

On October 24, Sumitovant Biopharma, together with its parent company Sumitomo Pharma (Sumitomo Pharmaceuticals), and Myovant Sciences jointly announced that they had reached a definitive agreement under which Sumitovant will acquire the remaining shares of Myovant for $27 per share in cash.

Colinbre Completes Nearly 200 Million Yuan in Series C Financing

Recently, ClinBrain, a leading enterprise in medical big data, has completed a C-round financing of nearly 200 million RMB, led by Legend Capital and followed by Guohe Investment.

Pipeline

Pipeline Progresses Rapidly, Industry Future Looks Promising

• On October 21, the CDE website showed that Eli Lilly's remternetug (LY3372993) injection clinical trial application was accepted for the treatment of Alzheimer's disease (AD).

  
  

• On October 21, the official website of the National Medical Products Administration showed that Pfizer's Tofacitinib Citrate Extended-Release Tablets received approval for a new indication in China.

  
  

• On October 21, the FDA's official website showed that AstraZeneca's anti-CTLA-4 monoclonal antibody tremelimumab (Tiximod) was approved by the FDA for marketing.

  
  

• On October 22, the CDE website showed that AbbVie's JAK1 inhibitor upadacitinib sustained-release tablets had a new indication submitted for marketing.

  
  

• On October 24, Novartis announced that the pivotal Phase III APPLY-PNH clinical trial met both primary endpoints.

  
  

• On October 25, GSK and its controlled ViiV Healthcare announced positive results from the Phase IIa proof-of-concept study of the HIV broadly neutralizing antibody N6LS (VH3810109).

  
  

• On October 29, the CDE website showed that GSK/ViiV Healthcare's HIV (Human Immunodeficiency Virus) drug Cabotegravir Injection and Cabotegravir Sodium Tablets had a new indication application submitted for marketing.

  
  

• Recently, Bristol-Myers Squibb (BMS) announced that the U.S. FDA has accepted the supplemental New Drug Application (sNDA) for its myosin inhibitor mavacamten.

Major Corporate Events

Over 60% of Pharmaceutical Companies Report Positive Q3 Earnings, Boosting Industry Confidence

The curtain has fallen on the third-quarter earnings reports, with over 460 medical companies listed on China's A-share market releasing their "report cards."

From the revenue data, optimism can take the lead for a while: over 60% of medical companies achieved year-on-year growth in total operating income in the first three quarters; 39 medical companies surpassed the "10 billion yuan" mark in revenue, and 16 companies saw growth of over 100%.

In terms of net profit data, there are also some standout companies in the third-quarter performance. However, the overall downturn in the pharmaceutical industry has been going on for more than just a day or two. The brief positive news from the third-quarter reports is hardly enough to fundamentally reverse the overall situation. It is hoped that in the upcoming 2022 annual reports, pharmaceutical companies can keep up the good work.

Global Pharmaceutical Companies Experience Leadership Shakeup: CEO Changes, Ownership Transfers, and Frequent Turnovers

In October, whether multinational corporations (MNCs) or local pharmaceutical companies, the frequent changes in personnel have drawn significant attention within the industry, especially the "mutual flow" of senior executives between MNCs.

On October 26, Merck's global leadership changed, with current CEO Robert M. Davis taking over as Chairman of the Board from Kenneth C. Frazier; meanwhile, the head of China’s Oncology Business Unit has also changed, with Tian Yu departing and Brecht Vanneste assuming the role.

On October 25, Roger Connor, head of GSK Vaccines, left to pursue a new role outside the company.

Recently, Yan Qiong, head of Novartis Innovative Drugs China's immunotherapy field, will leave Novartis.

In China, on October 10, former Vice General Manager and R&D CEO of Hengrui Medicine, Tao Wei Kang, joined Qilu Pharmaceutical.

Lilly's Heavyweight Weight Loss Drug Tirzepatide Enters FDA Fast Track

On October 6, Eli Lilly announced that the FDA had granted tirzepatide Fast Track designation for the treatment of adult obesity or overweight and weight-related complications. Based on discussions with the FDA, Eli Lilly will submit a rolling application for tirzepatide targeting adult obesity or overweight later this year.

In the weight loss market, Eli Lilly and Novo Nordisk have always been the main competitors. In June 2021, semaglutide (Wegovy) received FDA approval for its weight management indication, becoming the first and only once-weekly GLP-1 receptor agonist for weight management.

Tirzepatide is a once-weekly glucose-dependent insulinotropic polypeptide (GIP) and glucagon-like peptide-1 (GLP-1) receptor dual agonist.

Editor: Penicillin

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