Qyuns Therapeutics Files for IPO on HKEX: A Rising Star in Autoimmune and Allergic Disease Biologics Backed by Dr. Guoliang Yu

Recently, Quanxin Bio submitted its prospectus to the Hong Kong Stock Exchange, aiming for a listing on the Main Board.Quanxin Biologics is one of the few domestic biotechnology companies in the late clinical stage that focuses exclusively on biologics for autoimmune and allergic diseases. Founder Qiu Jiwan and Co-founder Dr. Yu Guoliang are both prominent figures in the field of rabbit monoclonal antibody technology.

A Blockbuster Drug Emerges in the Autoimmune Disease SectorCurrently, adalimumab (Humira) holds the top position among global autoimmune disease therapeutics. In 2022, its global sales reached $21.24 billion. Developed by AbbVie and launched in 2002, Humira has accumulated over $200 billion in global sales to date. It ranked as the world’s best-selling drug for eight out of the past ten years (from 2013 to 2022). Relying on Humira, AbbVie has consistently maintained a leading position in the performance rankings of multinational corporations (MNCs).

The domestic autoimmune disease sector has developed relatively slowly. According to incomplete statistics, the market for biologics in the autoimmune and allergy fields in China reached RMB 7 billion in 2021, yet it covered fewer than 200,000 patients. As multinational corporations’ drugs gain approval in China and are included in the national medical insurance catalog, and with an increasing number of domestic pharmaceutical companies entering the field, the market is gradually expanding. Given China’s vast population base, autoimmune therapeutics hold immense potential.

Quanxin Biologics has a clear strategic focus, centered on rabbit antibody technology licensed from Epitomics. As a serial entrepreneur, founder Qiu Jiwan brings extensive experience in pipeline planning and product development: over seven years, he has advanced six candidates into clinical trials. The ustekinumab biosimilar QX001S is expected to achieve commercialization as early as 2024; QX002N, indicated for ankylosing spondylitis, is set to initiate Phase III clinical trials; and QX005N, indicated for atopic dermatitis, has already entered Phase II clinical trials.On the Eve of an Autoimmune Boom, Quanxin Biologics’ IPO Filing Adds Fuel to the Market

Quanxin Biopharma, established in 2015, boasts an impressive pedigree. Its founder and CEO, Qiu Jiwan, brings nearly three decades of experience in the biotechnology industry. After graduating from Fudan University’s Department of Genetics and Genetic Engineering in 1993, he joined Hangzhou Jiuyuan Gene Co., Ltd., where he participated in the research and development of China’s first recombinant human granulocyte colony-stimulating factor (rhG-CSF), interleukin-11 (IL-11), and other recombinant protein therapeutics.

Qiu Jiwan is a typical serial entrepreneur with deep ties to Dr. Yu Guoliang, a Fudan University alumnus and one of the pioneers in the field of rabbit monoclonal antibody technology.Dr. Yu Guoliang is a renowned Chinese-American scientist and entrepreneur who has invested in more than 20 biotechnology and healthcare companies and co-founded over 10 biotechnology firms.

Advancing rabbit monoclonal antibody technology and the related industry stands as one of Dr. Guoliang Yu’s significant achievements: In 2001, Dr. Yu co-founded Epitomics with Weimin Zhu, successfully developing a series of groundbreaking global patents that addressed challenges such as the stability of rabbit hybridoma cells. Rabbit monoclonal antibodies are characterized by high affinity, high specificity, high sensitivity, and great diversity, enabling the generation of antibodies that are difficult to produce in mice.

Throughout Qiu Jiwan’s nearly 20-year entrepreneurial career, he has maintained close collaboration with Dr. Yu Guoliang. Since 2004, Qiu Jiwan has served as Deputy General Manager of Yikang Biology, the Chinese subsidiary of Epitomics, where he was primarily responsible for establishing production and technical platforms, with a business focus on raw materials for diagnostic reagents. He subsequently founded Taikang Biology and Quanxin Biology, aiming to develop a series of drug products based on rabbit monoclonal antibody technology. Dr. Yu Guoliang was a co-founder of both companies, and Epitomics served as the technological source for these two enterprises.

Taikang Biopharma was established in December 2005. During his tenure at Taikang Biopharma, Qiu Jiwan established a large-scale production technology platform for high-affinity rabbit monoclonal antibodies, as well as a technology platform for long-acting protein therapeutics. In 2015, Qiu Jiwan sold Taikang Biopharma and founded Quanxin Biologics, advancing rabbit monoclonal antibody technology into specialized drug development focused on antibody therapeutics for immune-related diseases.

Qiu Jiwan is keenly attuned to the unmet needs in the field of autoimmune diseases. Qiu believes that while autoimmune diseases are not fatal, they severely impact patients' quality of life and constitute a significant social issue. By 2015, Humira had surpassed Lipitor to become the new blockbuster drug with annual sales exceeding $10 billion. At that time, China was still relying on very early-stage and traditional corticosteroid-based therapies, lacking highly effective, precise, and targeted therapeutic agents.

After years of development, Quanxin Biologics, Apexigen (spun off from Epitomics), and Alder BioPharmaceuticals (acquired by Lundbeck) are regarded as leading companies in the global rabbit monoclonal antibody technology sector.

Based on this, Quanxin Biologics can be regarded as an ideal investment target, having completed multiple rounds of financing prior to submitting its prospectus.Investors includeEfung Capital,Hongtai Fund, Matrix Partners China, Triwise Capital, Cowin Capital, and Langmafeng Venture Capital; among them, Efung Capital has participated in investment since the angel round and made additional investments in multiple subsequent rounds.Public information indicates that the latest round was a C-round financing of RMB 227.5 million, completed in March 2022, with a post-money valuation of RMB 3.5 billion.

Quanxin Bio’s pipeline covers indications in four key therapeutic areas: dermatology, rheumatology, respiratory, and gastroenterology, including psoriasis, atopic dermatitis, rheumatoid arthritis, inflammatory bowel disease, and asthma.Of the nine projects under development, six have entered clinical stages. Eight of these were developed using its rabbit monoclonal antibody platform, including two core products: QX002N and QX005N.

QX002N is a high-affinity monoclonal antibody targeting IL-17A. Quanxin Biologics has obtained Investigational New Drug (IND) approval for QX002N for the treatment of ankylosing spondylitis and lupus nephritis, with plans to prioritize the development of QX002N for the ankylosing spondylitis indication. In March 2023, the Phase II clinical trial met its primary endpoint following evaluation by the Independent Data Monitoring Committee (IDMC), and preparations for the Phase III clinical trial were expected to commence in 2023.

QX005N is designed to inhibit IL-4Rα. Quanxin Bio has obtained IND approval for QX005N for the treatment of five indications (AD, PN, CRSwNP, CSU, and asthma), making it one of the IL-4Rα-targeted candidate drugs in China with the broadest range of indications. Quanxin Bio has initiated Phase II clinical trials for atopic dermatitis and completed patient enrollment in February 2023.

IL-17A and IL-4Rα are both well-validated blockbuster targets. It is evident that Quanxin Biologics’ strategy is to leverage the advantages of its rabbit monoclonal antibody technology for fast-follow development, thereby accelerating product advancement.

While discovering drug candidates leveraging rabbit monoclonal antibody technology, Quanxin Biologics has been transforming into a platform-based company. During its first four years of establishment, Quanxin Biologics operated under the early-stage biotech model, focusing on advancing a single drug pipeline. In 2019, the company initiated a strategic transformation, rapidly establishing a process development platform and a drug quality research platform. It also invested in the construction of Saifushi’s “Antibody Drug CDMO Production Base,” built in compliance with Good Manufacturing Practice (GMP) standards set by China’s National Medical Products Administration (NMPA), the U.S. Food and Drug Administration (FDA), and the European Medicines Agency (EMA), thereby laying the groundwork for large-scale commercial production.

In 2020, the Saifu Shi production base was put into operation.It was also in this year that Quanxin Bio entered a period of commercial transformation. The company partnered with Huadong Medicine to jointly develop and commercialize QX001S, and welcomed Huadong Medicine as a key institutional shareholder.

QX001S is expected to be Quanxin Biologics’ first commercialized drug and has the potential to become the first approved ustekinumab biosimilar in China. The development, clinical trials, and manufacturing of biosimilars involve higher costs than small-molecule generics, creating certain barriers to entry. Potential indications for QX001S include psoriasis, psoriatic arthritis, Crohn’s disease, ulcerative colitis, and systemic lupus erythematosus. Zhongmei Huadong (a subsidiary of Huadong Medicine) plans to submit a Biologics License Application (BLA) in China in the third quarter of 2023 and to commence commercialization of QX001S in the second half of 2024.

If QX001S achieves successful commercialization, it will be a highly competitive product. Johnson & Johnson’s ustekinumab (Stelara) recorded sales of $9.1 billion and $9.7 billion in 2021 and 2022, respectively.

The prospectus shows that Quanxin Bio currently has no operating revenue. However, while corresponding R&D expenses increased from RMB 152 million to RMB 257 million, the net loss decreased from RMB 426 million to RMB 312 million. Other current assets amount to RMB 635 million, including cash of RMB 213 million and financial assets of RMB 400 million; current liabilities stand at RMB 122 million. In the short term, cash reserves are sufficient to cover current liabilities and are expected to support the research, development, and market launch of QX001S.

Image source: Quanxin Biologics prospectus

Successfully advancing six drug candidates from Quanxin Biologics into clinical trials within seven years, proactively establishing manufacturing capacity—or more broadly, full lifecycle drug management capabilities—and promptly securing commercialization partners clearly demonstrate Qiu Jiwan’s resource integration and operational prowess as a serial entrepreneur.

The patient population in the autoimmune disease field is large, and treatment courses are prolonged. However, one of the reasons for the poor domestic sales of autoimmune drugs, represented by Humira, is their high price. Nevertheless, as more autoimmune drugs are included in the national medical insurance coverage, some changes have become clearly evident.

As of the new National Reimbursement Drug List (NRDL) released on March 1, 2021, dupilumab (Dupixent), an IL-4Rα-targeted agent, became the only targeted biologic approved for moderate-to-severe atopic dermatitis. According to Frost & Sullivan, the market size for autoimmune biologics in China is projected to reach $17 billion by 2030, with atopic dermatitis representing the largest therapeutic indication—a key focus area being actively pursued by Quanxin Bio’s QX005N.

Dupixent was approved for sale in China in 2020. Prior to its inclusion in the national medical insurance scheme, each prefilled syringe cost RMB 6,666; after coverage, the patient’s out-of-pocket expense dropped to RMB 790 per syringe. Last year, Dupixent generated sales of RMB 1.8 billion in China, compared with RMB 100 million in 2020, the year it first received approval. The improved affordability has significantly driven the rapid volume growth of this autoimmune medication.

As chronic conditions, autoimmune diseases are clearly less urgent than cancers. Due to the lack of long-term medication payment capacity in China, they have received far less attention in the domestic market compared to Europe and the United States. In terms of market education, both patients and physicians have insufficient awareness of these diseases, although the influence of multinational corporations (MNCs) such as Johnson & Johnson, Abbott, and Novartis is gradually penetrating the Chinese market. On the pharmaceutical front, few domestic companies focus on the autoimmune sector; however, companies like Innovent Biologics and Keymed Biosciences have recognized the significant potential of autoimmune drugs and have established multiple pipeline assets. This trend sends a positive signal, as the driving force of any single company in this field is limited and requires participation from multiple players; meanwhile, it also highlights intensifying competition.

In the overseas market, the patent for Humira expired in the United States this year, and competition for adalimumab’s market share has become extremely intense, with companies such as Amgen rapidly moving to capture a portion of the market. The psoriasis market itself is already highly crowded, with risankizumab, guselkumab, ixekizumab, apremilast, ustekinumab, adalimumab, and other agents vying for dominance.

China’s autoimmune disease market is entering a period of rapid growth. Quanxin Bio’s focused commitment to the autoimmune field is a rare asset, further strengthened by its unique rabbit monoclonal antibody technology. Under the leadership of its founders, the company boasts a robust pipeline and steady development. Amid this era of transition and intense competition among major players, Quanxin Bio stands out as a promising pioneer in China’s autoimmune sector. However, whether the secondary market will continue to support the company ultimately depends on its commercialization performance.