Rising Trend of Clinical Development Terminations in Pharma Partnerships Signals a New Normal

　　【Pharmaceutical Network Industry Dynamics] Since the process of developing and marketing a new drug is costly, labor-intensive, time-consuming, and highly risky, the License-in model has been gaining popularity in the industry in recent years. However, it is worth noting that as biopharmaceutical innovation companies rise, the market becomes increasingly open, and pharmaceutical companies engage in more frequent License-in collaborations, incidents of clinical development termination for innovative drugs involved in global cooperative projects have also started to occur more frequently.
 

For example, on July 18, Sesen Bio announced that it would terminate the clinical development of the immunotoxin Vicineum in the United States. It is reported that Sesen Bio had reached cooperation agreements with Hikma Pharmaceuticals and Qilu Pharmaceuticals respectively, granting the development rights of Vicineum in the Middle East and North Africa, and Greater China. Qilu Pharmaceuticals announced on July 31, 2020, that it had obtained the exclusive development and commercialization rights of Vicineum in China, paying an upfront payment of 12 million US dollars, and subsequently needing to pay 23 million US dollars for technology transfer and registration regulatory milestones.
 

On July 8, MacroGenics announced the termination of the Phase II clinical trial of its core investigational product, the B7-H3 monoclonal antibody enoblituzumab. Previously, I-Mab Biopharma paid an upfront fee of $15 million, potential development and regulatory milestone payments of up to $135 million, and a share of annual net sales revenue to collaborate with MacroGenics, obtaining exclusive rights for the clinical development and sales of enoblituzumab in Greater China.
 

In mid-June, AbbVie terminated a four-year collaboration with Morphic Therapeutic, Inc. based in Massachusetts. Public information shows that in 2018, AbbVie and Morphic established a research and development partnership to jointly advance Morphic’s oral integrin therapy, blocking TGF-β activation in fibrotic diseases. In April, AbbVie also announced the termination of its collaboration with BioArctic, halting the subsequent clinical development of the Parkinson's disease treatment drug α-synuclein (aSyn) antibody ABBV-0805.
 

In the same month, Nektar and Bristol-Myers Squibb also announced the termination of the global clinical development plan for Bempegaldesleukin in combination with Opdivo. This decision was based on the pre-planned analysis results of two late-stage studies combining BEMPEG (Bempegaldesleukin). It is reported that Opdivo (Nivolumab) is used for kidney cancer and bladder cancer. A pre-planned interim analysis found that the study combination failed to improve overall survival rates achieved by TKI in the two populations.
 

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From the above analysis, it can be seen that although the reasons for the termination of these pharmaceutical companies' R&D collaborations vary, they are mainly divided into active and passive categories. The active category is mostly due to changes in the competitive market landscape or concerns about intensified future market competition, leading companies to proactively halt R&D in innovative drugs. On the other hand, the passive category primarily involves drugs whose efficacy or safety did not meet expectations.
 

It is expected in the industry that, with more and more pharmaceutical companies accelerating the development of innovative drugs, such cooperation terminations will become the norm. After all, as clinical trials advance, uncontrollable factors will continue to increase, and the requirements for the clinical development and financial support capabilities of partner companies will also become increasingly higher.
 

Notably, risks often coexist with rewards. Under the License-in model, the pharmaceutical industry has already seen numerous successful cases. For instance, Zai Lab is using the profits generated from "license-in" R&D to support its independent new drug development, creating a virtuous cycle that further boosts economic benefits. Additionally, BeiGene has obtained exclusive rights for the development, production, and commercialization of sitravatinib from Mirati Therapeutics in Asia (excluding Japan), Australia, and New Zealand, expanding its product pipeline.
 

Disclaimer: In any case, the information or opinions expressed in this article do not constitute investment advice to any person.