Resurgence of Small Molecule Innovative Drugs: Driving Technologies and Value Scenarios

On June 14, 2022, the 6th Future Healthcare 100 Conference, themed “China Stories,” kicked off. The conference analyzed industry hotspots from five dimensions—policy orientation, technological frontiers, capital perspectives, industrial innovation, and market demand—interpreted development trends in the future healthcare industry, and promoted transformative changes in the innovative healthcare sector.

The five-day conference will feature over 200 distinguished guests from the healthcare and medical sectors, presenting two days of main forums and more than 20 themed sessions in specialized fields. The event comprehensively covers areas including nucleic acid therapeutics, cell and gene therapy, innovative small-molecule drugs, ITBT (Information Technology-Biotechnology), digital therapeutics, life science tools, personalized diagnosis and treatment, AI-assisted diagnostics, cardiovascular care, ophthalmology, brain science, health management and health insurance, Internet-plus smart hospitals, assisted reproduction, rehabilitation robotics, and digital marketing for pharmaceutical companies.

By VCBeat,VB100, VCBeat New MedicineOrganized by: GTJA Investment in Collaboration withHosted byDevelopment of Innovative Small-Molecule DrugsThe forum was held onJune17DayUpperThe meeting was held online in the afternoon.The event brought together innovative companies and investors from this niche sector, focusing on therapeutic breakthroughs achieved by small-molecule drugs across several different disease areas. It provided many valuable insights for assessing industry development trends and identifying investment opportunities.

The following is a summary of the viewpoints presented by speakers and panelists at the Forum on the Development of Innovative Small-Molecule Drugs, with edits made to preserve the original meaning.

Executive Partner, GTJA Investment Group Teng Yuhang

A New Journey in the Development of Innovative Small-Molecule Drugs in China

Representative Types of Innovative Small-Molecule Drug Companies in China: Teng Yuhang Categorizes Them into Three Groups

The first category comprises generic drug manufacturers transitioning into innovative pharmaceutical companies, with Hengrui Medicine being the most typical and widely recognized representative. These companies have accumulated experience through the stages of generic drugs and improved new drugs, possessing robust manufacturing capabilities and strong commercialization potential.

The second category comprises pharmaceutical companies in the clinical stage. These enterprises leverage diverse product portfolios and technology platforms to benchmark against international first-in-class innovations and engage in differentiated competition. Their products have advanced to the clinical validation phase and demonstrated promising prospects for clinical application. There are numerous representative companies in this category, including Jacobio Pharmaceuticals and Kintor Pharmaceutical, which are already listed on the Hong Kong Stock Exchange.

The third category comprises innovative pharmaceutical companies that have already achieved commercialization. Based on differences in their business models, these enterprises can be further divided into two types: those primarily focused on independent research and development, and those mainly relying on in-licensing. Representative companies are well-known to the public, such as BeiGene and Zai Lab.

In light of current pain points and market dynamics, GTJA Capital believes that the development of innovative small-molecule drugs in China will exhibit the following trends in the future.

First, there is a shift toward developing true Best-in-Class and First-in-Class therapies, which entails enhancing innovation capabilities while rejecting pseudo-innovation and “me-worse” drugs. This requires companies to do more than simply discover a new molecular entity; the new molecule must demonstrate clear superiority over existing medications already on the market.

Second, increase investment in innovative platforms and technologies such as AI, PROTACs, and molecular glues. In the future, in addition to developing drugs, it is essential to achieve faster timelines and higher efficiency. This will necessarily require the adoption of newer technological platforms to provide enabling support.

Third, we must respect a development approach that is guided by clinical needs and aligned with international standards. This places higher demands on domestic clinical development capabilities. Ultimately, the goal is to adopt a global perspective and explore independent pathways for expanding into overseas markets.

Chairman, CEO and President of Xunuo Pharmaceutical Xu Yinglin

Developing Best-in-Class Innovative Anti-Tumor Drugs

Over the past year or two, a growing number of investors, including corporate entities, have come to recognize that every company must cultivate its own core strengths rather than chasing after particularly hot targets. Engaging in such bandwagon effects and herd behavior ultimately leads to excessive internal competition. Therefore, over the past four to five years, Xunuo Pharmaceuticals has consistently adhered to the principle of avoiding herd mentality and refraining from chasing trends, earning strong recognition from investors. This strategy has laid a highly successful foundation for Xunuo Pharmaceuticals over the past five years, and the company will continue to advance in therapeutic areas where it holds competitive advantages.

A key consideration in clinical development, both in China and the United States, is that clinical resources are paramount. Therefore, Xnuo Pharma collaborates with China’s leading top-tier specialized hospitals for its programs in lymphoma and other solid tumors. Each partner hospital is among the most prestigious institutions in municipalities directly under the central government, provincial capitals, or first-tier cities. Moreover, all principal investigators (PIs) are recognized experts in their respective fields.

In Xuanuo Pharmaceutical's pipeline, Xu Yinglin placed particular emphasis on abexinostat.

Abexinostat has currently reached the New Drug Application (NDA) stage. It is expected that the NDA for the treatment of follicular lymphoma will be submitted in the third quarter of 2022, with approval and market launch potentially occurring as early as the first half of 2023. The next two indications under development are renal cell carcinoma and diffuse large B-cell lymphoma. Outside of China, Abexinostat has several ongoing clinical studies in the United States. Taking mantle cell lymphoma as an example, XenoPort Pharmaceuticals has completed a Phase I clinical study in collaboration with Janssen Pharmaceuticals and is currently exploring the initiation of a registrational Phase II clinical trial in the U.S. in partnership with Janssen. There is hope to submit an NDA in the United States in the first half of 2023, positioning the company as one of the few Chinese pharmaceutical companies capable of launching innovative drugs in the U.S. market.

Founder of Weimu Biotech andCEO Shen Wang

Clinical Demand-Driven Innovation in Ophthalmic Pharmaceuticals

China’s ophthalmic drug market is currently equivalent to approximately one-quarter to one-third of that in the United States, and it is projected to exceed half of the U.S. market size by 2030. The primary driver is the accelerating aging of the population. While both China and the United States are entering an aged society phase, China’s aging process is occurring at a faster pace. Many ophthalmic conditions, particularly degenerative diseases such as dry eye disease, glaucoma, age-related macular degeneration (AMD), and diabetic macular edema (DME), are closely associated with advancing age.

Looking further at market segmentation, fundus diseases account for the largest market share both globally and in China, followed by dry eye disease and more severe forms of glaucoma. Weimou has established a strong presence across these three indications. For dry eye disease, Weimou’s first drug candidate, VVN001, has completed Phase II clinical trials in the United States with promising results, while its Phase II clinical trial in China is currently underway. Additionally, VVN461, a drug candidate for the treatment of uveitis, is entering Phase I clinical trials in China. In the area of glaucoma, Weimou has developed VVN539, a potent intraocular pressure-lowering agent, which has just completed its Investigational New Drug (IND) application in the United States. Moving forward, Weimou’s primary strategic focus will shift toward fundus diseases, with multiple projects already in progress. The company is also evaluating various drug delivery technologies for ocular fundus therapies. It is expected that, starting from 2023, one new drug candidate for fundus diseases will enter the IND stage every one to two years.

Currently, the primary treatment for retinal diseases remains the inhibition of VEGF-mediated neovascularization. In 2020, sales of retinal disease treatments in the United States approached $7 billion, with anti-VEGF drugs holding an absolute dominant market position. However, patient compliance with anti-VEGF therapy is poor, as it requires intravitreal injections every one to two months. Long-term use imposes a significant burden on patients, both practically and psychologically. Nearly four years of follow-up data indicate that even among patients receiving pharmacological treatment, failure to adhere to the frequent injection regimen results in continued vision loss. Therefore, there remains an unmet clinical need in this market for therapies with extended dosing intervals to improve both compliance and therapeutic outcomes.

Furthermore, there is a significant unmet clinical need in diabetic retinopathy. Approximately 40% to 50% of patients with diabetic retinopathy exhibit poor or no response to anti-VEGF therapy. Weimou is currently testing and developing drugs targeting multiple different pathways, including multi-target agents, with the aim of identifying therapies that offer superior efficacy compared to anti-VEGF treatments. The company is also evaluating various administration routes, including intravitreal and suprachoroidal injections, and has initially achieved promising results.

Founder of Dannov Pharma andCEO Ma Zhenkun

How Small-Molecule Conjugation Technology Addresses Clinical Pain Points: A Clinical Needs-Driven Approach?

DanoMed is a company dedicated to the fields of bacterial infections and metabolism-related diseases. Guided by clinical needs, we are committed to developing truly differentiated products. Currently, several of our candidates have passed proof-of-concept in clinical trials and entered Phase III clinical development, covering therapeutic areas such as infections associated with implanted medical devices, hepatic encephalopathy in liver cirrhosis, and Helicobacter pylori infection.

As the population ages, medical technology advances, and overall payment capacity improves, the use of implantable medical devices has become increasingly common. Consequently, infections associated with these devices have emerged as a growing and unmet medical need. Implantable device-related infection is an emerging healthcare challenge; to date, no antimicrobial agents specifically approved for treating such infections have been marketed. Current management primarily relies on explantation and replacement surgery for eradication, which consumes substantial medical resources and imposes significant suffering and economic burden on patients.

Why Can’t Infections Associated with Implanted Medical Devices Be Eradicated Using Existing Antibiotics? The reason is that infections related to implanted medical devices differ from ordinary infections, possessing unique biological characteristics. The surface of the implant provides a favorable environment for bacterial growth. Bacteria can colonize the implant surface and form biofilms, within which the bacteria exist in a state of slow metabolism or dormancy. Bacteria growing in this state can effectively resist the bactericidal effects of traditional antibiotics, particularly those whose mechanism of action involves inhibiting cell wall synthesis. Meanwhile, necrosis of the tissues surrounding the medical device and poor vascularization make it difficult for human immune cells to reach the site of infection, thereby effectively helping the bacteria evade the body’s immune response mechanisms.

In light of the biological characteristics of infections associated with implantable medical devices, Dannov Pharma has selected RNA polymerase as its therapeutic target for novel drug development. The significance of this target in treating biofilm-associated infections has been substantiated by extensive biological, preclinical, and clinical data.

DanoMed has adopted two distinct drug discovery strategies. The first strategy involved high-throughput screening of a small-molecule library targeting RNA polymerase, which yielded the lead compound CBR-703. However, structural optimization based on CBR-703 failed to produce any new drug candidates suitable for clinical development. The second strategy used the RNA polymerase inhibitor rifamycin as the lead compound and addressed drug resistance by designing multi-target conjugate molecules. By employing this approach, DanoMed designed, synthesized, and evaluated approximately 1,000 conjugate molecules, successfully identifying the new drug candidate TNP-2092.

Danuo Pharmaceuticals has completed Phase I and Phase II clinical studies of TNP-2092 under an Investigational New Drug (IND) application in the United States, demonstrating its safety and efficacy. The drug has received three designations from the U.S. FDA: Qualified Infectious Disease Product (QIDP), Orphan Drug, and Fast Track. Currently, multi-regional clinical trials (MRCT) are being conducted, including in China and the United States.

Founder of Purui Benchmark,CEO: Ji Xuwu

How Can Multi-Omics Data Mining Facilitate Differentiated Development Strategies for New Drugs?

From the perspective of PreciseDx, a drug’s clinical positioning and development strategy are no less important than its target and molecular structure. This is particularly true as there is growing recognition that new drug R&D should be guided by clinical value. Assessing a drug’s clinical value, or determining how to maximize it, essentially hinges on identifying the clinical positioning under which the drug can achieve optimal therapeutic efficacy.

New drug developers all aim to maximize the clinical value of their investigational drugs through innovation and differentiation. Selecting the optimal clinical positioning for investigational drugs—by identifying the best indications, leveraging innovative biomarkers, and developing novel combination regimens—to establish them as “me-different” therapeutics is a goal shared by many pharmaceutical companies. Helping our pharmaceutical partners achieve this objective is the core mission of PreciseDx.

Critical decisions regarding clinical positioning and clinical development strategies require systematic capabilities in translational medicine. Currently, such capabilities remain scarce within the industry. Moreover, with the rapid advancement of new technologies such as omics and the swift accumulation of massive datasets, the threshold for building novel translational medicine capabilities is increasingly high. This is precisely why Dr. Ji Xuwo and Professor Han Liang from The University of Texas MD Anderson Cancer Center founded Precise Benchmark, developing AIBERT, a multi-omics data mining system designed for innovative drug R&D, to provide decision-support services to pharmaceutical companies.

In Purui Benchmark’s workflow, research begins with a small number of samples from early-stage pharmaceutical studies, which may include cell lines, mouse models, or limited clinical specimens. Based on these samples, Purui Benchmark generates drug-related omics data. Preliminary mining of these omics data yields numerous conclusions awaiting validation, referred to as hypotheses. For example, a typical hypothesis might posit that the optimal indication for a certain drug is colorectal cancer, or that the efficacy biomarker for a specific drug is amplification of a particular gene. These hypotheses are then fed into the AIBERT system.

The AIBERT system comprises a functional omics experimental platform and an omics data mining (computational) platform, integrating both wet-lab and dry-lab approaches. PureDiag validates the aforementioned input hypotheses by leveraging extensive computational analysis of large-scale omics data, applying multiple rounds of filtering, and iteratively refining results through combined wet- and dry-lab experiments, ultimately yielding the most reliable conclusions. These conclusions can serve as the basis for decision-making in new drug development.

AIBERT can be used not only for the clinical positioning of “me-different” drugs but also for the evaluation of innovative (pre-drug) targets. Leveraging the AIBERT multi-omics data mining platform, Purui Benchmark has assisted pharmaceutical partners with multiple drug candidates, advancing innovative and differentiated R&D.

Founder of Huimei Digital Technology andCEO Zhang Xinyan

How Pharmaceutical Companies Can Achieve Success in the Era of Rapid Digital Penetration“Omni-channel Marketing”?

In the marketing phase of China’s entire pharmaceutical industry, Huimei Digital Technology has divided it into three stages:

Marketing 1.0, known as the Era of Land Grabbing. During this era, drug prices were sufficiently high, providing ample margin for pharmaceutical manufacturers to employ a large number of sales representatives. This offline visitation and information dissemination model, reliant on a vast force of representatives, characterizes the Marketing 1.0 stage.

During the Marketing 2.0 phase, driven by medical insurance controls on drug prices, the advent of centralized volume-based procurement (VBP), and the impact of the pandemic, pharmaceutical companies were compelled to rethink how to achieve more agile physician engagement. This led to the emergence of a hybrid “air-and-ground” business model. In this stage, online virtual representatives and offline field sales representatives worked in tandem to deliver information and facilitate communication with physicians.

As pandemic management becomes normalized and the capacity of lower-tier markets to absorb pharmaceutical products improves, pharmaceutical companies are increasingly focusing on how to strengthen the bond between their brands and physicians. Consequently, these companies are building their own physician platforms and portals to facilitate greater online engagement, multi-dimensional collaboration, and the integration of omnichannel data.

This 3.0 era is referred to by Huimei Digital Technology as “omni-domain marketing.” It essentially represents the new frontier of integrated marketing that unifies enterprises, physicians, and patients.

Taking Huimei Digital Technology as an example, its SCRM platform (Physician Portal/Representative Workspace) is designed to empower pharmaceutical companies by building their operational capabilities through the integration of data and systems, thereby facilitating the dissemination of academic marketing activities targeting physicians. In online collaborative operations with physicians, Huimei Digital Technology leverages the medical framework and expertise of the Mayo Clinic to provide clinicians with support in both clinical practice and scientific research. Meanwhile, Huimei Digital Technology also assists physicians in patient management and education, including follow-up care and disease progression management.

This creates a new frontier for marketing: an integrated triad of enterprises, physicians, and patients.

Huimei Shuke is the industry’s first company to pioneer a physician-centric, omni-channel marketing solution. It provides an integrated marketing platform, operational services, and digital products, enabling a new ecosystem that empowers end-to-end digitalization of pharmaceutical marketing. This approach meets pharmaceutical companies’ needs for digital, omni-channel marketing across both pre-launch and post-launch phases.

Targeted Protein Degradation: The Next Golden Age of Small-Molecule Drugs

Senior Researcher at VCBeat Institute Wang Jiaqi

PROTAC, as a representative technological approach in the field of protein degradation, offers three major advantages:

First, it holds promise for overcoming drug resistance. In 2018, the Crews research group developed a PROTAC molecule that can effectively overcome the C481S resistance mutation associated with ibrutinib.

Second, PROTACs hold promise for transforming undruggable targets into druggable ones. The mechanism of action of PROTACs differs fundamentally from the occupancy-driven model of traditional small molecules; it is event-driven, requiring only the attachment of a ubiquitin “tag” to the target protein to trigger its degradation. This implies that proteins previously considered undruggable have the potential to be degraded via PROTAC technology.

Third, superior performance. The ability of PROTACs to degrade proteins enables their clearance, meaning that they not only inhibit protein function but also modulate both enzymatic and non-enzymatic activities of proteins.

There are approximately 20 to 30 companies in China’s protein degradation sector, indicating a relatively small number of participants overall. Among them, HaiChuang Pharma has recently completed its initial public offering. These domestically established small and medium-sized enterprises focusing on PROTAC or the protein degradation space were mostly founded around 2017 and 2018, a period that coincided with the booming development of the PROTAC field.

The overseas protein degradation sector already has a large number of companies, with representative players including Arvinas, C4 Therapeutics, and Kymera Therapeutics. Meanwhile, many major pharmaceutical companies are also entering this field, such as Eli Lilly, Bayer, and Roche.

The market capitalization performance of these listed companies also reflects public perception of the protein degradation sector. Arvinas had a market cap of $500 million when it went public in 2018, which has since quadrupled to approximately $2 billion. Similarly, China-based HaiChuang Pharma started with a market cap of around RMB 3 billion at its IPO and has now risen to roughly RMB 3.4 billion. Of course, this growth in market capitalization has experienced fluctuations, closely tied to developments within the targeted protein degradation field.

Two decades ago, four key questions regarding protein degradation remained unanswered: first, whether these agents possess drug-like properties; second, whether they are safe for humans; third, whether they can degrade target proteins; and fourth, whether they have therapeutic effects on diseases. These four questions have now been satisfactorily addressed, completing the proof of concept for this new field and ushering it into the phase of clinical translation.