Hengrui Medicine Secures $152.5M Deal to Bring Pyrotinib to India with Dr. Reddy's

On October 8, 2023, Hengrui Pharma issued an announcement stating that it had reached an agreement with Dr. Reddy’s Laboratories (hereinafter referred to as “Dr. Reddy’s”), an Indian pharmaceutical company, to exclusively license the rights for the development and commercialization of its independently developed human epidermal growth factor receptor 1/2/4 (HER1/HER2/HER4) targeted drug, pyrotinib maleate tablets (hereinafter referred to as “pyrotinib”), within India to Dr. Reddy’s, an Indian listed company.

Under the terms of the agreement, Hengrui Pharma will receive a $3 million upfront payment and is entitled to receive up to $152.5 million in sales milestone payments. In addition, Hengrui Pharma is also entitled to receive double-digit percentage royalties based on the annual net sales of the licensed products in the licensed territory.

Pyrotinib (trade name: Airuini) is an oral HER1, HER2, and HER4 tyrosine kinase inhibitor (TKI) independently developed and owned by Hengrui Pharma. It is a small-molecule, irreversible, pan-ErbB receptor tyrosine kinase inhibitor and the first domestically developed anti-HER1/HER2/HER4 targeted therapy in China.

In 2018, pyrotinib received conditional approval for marketing from the National Medical Products Administration based on Phase II clinical trials, becoming the first innovative drug in the field of solid tumors in China to gain conditional approval based solely on Phase II clinical data.

In 2019, pyrotinib was included in the National Reimbursement Drug List.

In 2020, pyrotinib received full approval for marketing based on the results of two pivotal Phase III studies (PHENIX and PHOEBE), in combination with capecitabine for the treatment of patients with HER2-positive recurrent or metastatic breast cancer who have previously received trastuzumab therapy.

In 2022, pyrotinib was approved for its second indication: in combination with trastuzumab and docetaxel for the neoadjuvant treatment of patients with HER2-positive early or locally advanced breast cancer.

In 2023, pyrotinib received approval for its third indication: in combination with trastuzumab and docetaxel, it is indicated for the treatment of patients with HER2-positive recurrent or metastatic breast cancer who have not previously received anti-HER2 therapy in the advanced setting.

Pyrotinib is not making its first overseas foray. In September 2020, Hengrui Pharma licensed the rights for the development and commercialization of pyrotinib in South Korea to HLB-LS for a total transaction value of $105.7 million. The current collaboration with India’s Dr. Reddy’s involves licensing terms that are slightly higher than those previously granted to HLB-LS.

For the breast cancer indication, HER2 small-molecule inhibitors currently marketed domestically and internationally include Lapatinib (brand name Tykerb), Neratinib (brand name Nerlynx), and Tucatinib (brand name Tukysa). According to the EvaluatePharma database, the combined global sales of Lapatinib, Neratinib, and Tucatinib in 2022 amounted to approximately USD 603 million.

According to public information, Dr. Reddy's was founded in 1984 and is a global integrated pharmaceutical company headquartered in Hyderabad, India. It is publicly listed on the New York Stock Exchange (ticker symbol: RDY), the National Stock Exchange of India (ticker symbol: DRREDDY), and the Bombay Stock Exchange (ticker symbol: 500124).

From the perspective of its development path, Dr. Reddy's growth into an international pharmaceutical enterprise is inextricably linked to its overseas expansion. In 2015, Dr. Reddy's formed a strategic alliance with Amgen for the Indian market and acquired a portfolio of branded drugs from UCB in India. In 2016, it acquired eight generic drugs from Teva for the U.S. market, thereby expanding its collaboration with India-based Gland Pharma in the U.S. market.

Currently, Dr. Reddy’s offers a diverse portfolio comprising active pharmaceutical ingredients (APIs), generic drugs, biosimilars, and innovative medicines, along with a range of pharmaceutical custom manufacturing services. The company’s primary therapeutic areas include gastrointestinal disorders, cardiovascular diseases, diabetes, oncology, pain management, and dermatological conditions. Its key markets encompass the United States, India, Brazil, China, and Europe.

Prior to Hengrui Pharma, Dr. Reddy’s had already entered into a strategic marketing collaboration with Kuihua Pharmaceutical Group in 2021 to promote pediatric rare disease medications in the Chinese market. The partnership covers two products: vigabatrin for oral suspension, an imported rare disease drug for the treatment of infantile spasms, and trientine hydrochloride capsules, a rare disease medication for the treatment of pediatric Wilson’s disease (also known as “copper baby disease”). These two drugs fill the domestic gap for such therapies and will also enrich Kuihua Pharmaceutical’s pediatric drug pipeline.

In May this year, Dr. Reddy’s entered into a collaboration with Junshi Biosciences to jointly conduct R&D and commercialization of toripalimab injection, an anti-PD-1 monoclonal antibody independently developed by Junshi Biosciences, in Latin America, India, and South Africa. Additionally, Dr. Reddy’s Laboratories has the option to expand the licensing scope to cover Australia, New Zealand, and several other countries.

Since the beginning of this year, Hengrui Pharma has achieved multiple milestones in its global expansion. This collaboration with Dr. Reddy’s marks the company’s second major international move in the past two months.

In February, it licensed its EZH2 inhibitor to Treeline Biosciences for a cumulative total of $700 million; in May, edralbrutinib (a BTK inhibitor) for the treatment of neuromyelitis optica spectrum disorder (NMOSD) received Orphan Drug Designation from the U.S. Food and Drug Administration (FDA); this July, the FDA accepted the Biologics License Application for camrelizumab in combination with apatinib as a first-line treatment for liver cancer.

On August 14, Hengrui Pharma announced that it had reached an agreement with One Bio, a U.S.-based company, to grant One Bio a paid license for the SHR-1905 injection project (hereinafter referred to as “SHR-1905”), a Class 1 innovative drug with independent intellectual property rights. Under the terms of the agreement, the upfront payment and near-term milestones for this new drug licensing transaction total $25 million. Subsequently, based on the first regulatory approval of SHR-1905 in each of the agreed-upon countries and regions and its actual annual net sales, One Bio will pay Hengrui Pharma cumulative R&D and commercial milestone payments of up to $1.025 billion. In addition, Hengrui Pharma will receive tiered royalties at a double-digit percentage of actual annual net sales.

As a representative of traditional pharmaceutical companies transitioning toward innovation and upgrading, Hengrui Pharma, which started with active pharmaceutical ingredients (APIs) and generic drugs, has consistently maintained its investment in research and development. According to relevant financial reports, the company’s cumulative R&D expenditure over the past decade has reached RMB 29.2 billion, ranking among the top in China’s pharmaceutical industry.