Exclusive Interview with Wu Qiong, CCO of JW Therapeutics: How Big Is the CAR-T Market and How Low Can Costs Go? Let’s Run a Bit Longer

In late March, Fosun Kite and JW Therapeutics, the only two companies with approved cell immunotherapy drugs, successively announced their 2021 annual results.

As pioneers in commercialization, they presented less than six months’ worth of revenue data, subjecting themselves to scrutiny from the entire industry.

In contrast, Fosun Pharma has disclosed very limited revenue data related to CAR-T therapies, whereas JW Therapeutics, listed on the Hong Kong Stock Exchange, has provided more detailed figures. Key metrics of significant interest, such as revenue, costs, and gross margin, are all reflected in its annual performance results.

Following the release of its annual performance results, VCBeat promptly contacted and conducted an exclusive interview with Wu Qiong, Senior Vice President and Chief Commercial Officer of JW Therapeutics.

In 2020, after Wu Qiong joined JW Therapeutics, she witnessed two major milestones for the company: its initial public offering (IPO) in Hong Kong, followed by the regulatory approval of its first CAR-T product, relmacabtagene autoleucel injection. The commercialization of this product has become the most challenging task facing Wu Qiong.

Over her 28-year career, Wu Qiong has worked at major pharmaceutical companies such as Merck & Co., gaining experience in the commercialization of 17 products. For sales teams, regardless of the drug being marketed, the focus has traditionally been within hospitals. However, no drug is as unique as CAR-T therapy, which not only requires building a specialized team from the ground up but also fundamentally disrupts the entire business model of pharmaceutical marketing.

Yet for other personalized, customized, and high-value products, such models share commonalities. As a result, Wu Qiong has also observed that at this year’s industry symposiums, “many cell therapy and gene therapy companies have asked us, ‘What is your business model?’”

With a mindset geared toward pioneering new models, he often joked with his team, “We are bound to end up in MBA textbooks; the only question is whether we’ll be featured as a positive case study or as a cautionary tale.”

Before the launch of the company’s first CAR-T product, questions from customers, investors, and the public centered on two key issues: whether CAR-T therapy is truly effective, and whether large-scale commercial manufacturing is feasible. After its market debut, the primary concerns shifted to whether the entire commercialization pathway could be successfully executed, whether JW Therapeutics could effectively sell its product, and what the actual market size would be.

Wu Qiong believes that over the past four months, they have clearly answered the first two questions: the commercialization pathway is viable, albeit complex; and CAR-T therapies can indeed be sold. Relmacabtagene autoleucel injection was approved on September 1, 2021, and publicly announced on September 3. The first prescription was issued on the same day, with 54 prescriptions written and 30 patients undergoing infusion within four months. “In fact, there are more patients waiting, as we need to proceed steadily.”

“We have found that there are patients willing to pay first-class prices, and they are quite numerous.” As for the actual size of the market, Wu Qiong believes, “Let’s each continue to run a bit longer.”

VB New Medicine:Following the commercial launch of CAR-T products, have you engaged in extensive communication with hospitals, clinicians, and patients? What are their needs?

Wu Qiong:For many years, hospitals have acted as the primary buyers (Party A) in the pharmaceutical supply chain. However, with autologous cell immunotherapy drugs, hospitals serve as both users and producers, functioning as both Party A and Party B. Therefore, we must provide training certification, quality certification, and sign quality agreements with each hospital. We also assist hospitals in establishing Multidisciplinary Team (MDT) groups to ensure proper management of any adverse events. As of the end of last year, a total of 61 hospitals had received training and certification. By February 8 this year, that number had further increased to 73.

Of course, patients’ willingness to pay is conditional. First, they must believe that your product is first-class; second, you must be able to provide first-class service. This is what we need to demonstrate.

VCBeat New Medicine:How does JW Therapeutics reach patients who are willing to pay?

Wu Qiong:We must first carefully and meticulously select medical institutions, as I believe the key to the commercialization of cellular immunotherapy lies in orderly expansion, rather than succumbing to chaos upon deregulation or stagnation under excessive control. Therefore, we have partnered with China’s top-tier specialized hospitals for hematologic and lymphoid malignancies, which collectively cover nearly 65% of patients. Meanwhile, through our digital marketing efforts, we educate patients on where to receive standardized CAR-T therapy, directing them to these central hospitals.

VB New Medicine:Which cities and hospitals currently account for the majority of patients who have been prescribed and completed infusion?

Wu Qiong:Based on the actual origins of our patients, who come from as far north as Heilongjiang, as far south as Yunnan, and as far west as Xi’an and even deeper into Northwest China, we have identified that the top five cities receiving patient inflows nationwide are Beijing, Shanghai, Guangzhou, Hangzhou, and Wuhan, with Chengdu ranking sixth. In other words, following initial treatment at primary and secondary care levels, patients gradually converge on these major centers, which consequently serve as the primary sources of our prescriptions.

We will moderately expand the scale of our hospital network, but our top priority is to excel in managing our designated core hospitals and establishing a robust system, as they have more extensive experience with our products and greater confidence in them. Moving forward, we will gradually extend our reach to hospitals across various provinces and municipalities through measures such as hospital pairing programs and cloud-based training. However, we will not engage in blind expansion; we believe that a network of over 100 hospitals is sufficient and will not exceed this number.

VB New Medicine:How does the company internally assess that there are 100 hospitals of such a scale?

Wu Qiong:First, Roche’s rituximab serves as the benchmark. As you can see, it has achieved coverage in 2,400 hospitals across China, spanning from top-tier institutions to lower-level facilities; we can examine its adoption curve. Second, since our products are used in hematology departments, we can reference the hospital networks of Pfizer and Merck & Co. involved in hematopoietic stem cell transplantation units. By analyzing their adoption curves, we identify the most strategic entry points. To date, approximately 80–90% of the hospitals we initially selected have proven to be the right choices.

VCBeat New Medicine:How was the current commercialization team of approximately 110 members established?

Wu Qiong:Throughout my 28-year career, I have previously commercialized 17 products. Whether dealing with chemical drugs, large-molecule biologics, or small-molecule therapeutics, our primary focus in commercialization has always been on one “P”: the Physician. In contrast, for cellular immunotherapy products, we must address six “Ps.” Beyond hematologic oncology and lymphoma specialists, we must also consider the Patient, the Provider (hospital), Partners, Policy Makers, and Payers.

We build our commercialization team around these 6Ps, aligned with our business model. Previously, the commercialization team was predominantly composed of sales personnel; however, sales is no longer the largest function. For instance, the CAR-T consultant team plays a critical role in ensuring comprehensive service throughout the patient’s treatment journey. Additionally, the hospital access team addresses training and certification requirements across the entire process. The innovative payment team, though small with only four members, is also highly important.

This year, we will not engage in large-scale team expansion, as we aim to build a lean and high-performing team that provides adequate coverage for hospitals. While this outlines the basic framework of our team, our key focus will be on strengthening the capabilities of team members and optimizing internal processes.

At an industry conference, Wu Qiong once candidly stated that although the CAR-T products of Fosun Kite and JW Therapeutics have been approved successively, their competitor is not Fosun Kite; in fact, the two companies are even becoming allies in the same trench. The other three competitors are more critical:

First, Class Choice: CAR-T products must demonstrate superiority over chemotherapy and autologous transplantation. Additionally, there are hospital-manufactured CAR-T therapies and a large number of free clinical trials.

VCBeat New Medicine:Some hospitals with which we collaborate and provide training are also conducting investigator-initiated trials (IITs) related to CAR-T. Why, then, are they willing to adopt JW Therapeutics’ commercialized CAR-T products?

Wu Qiong:Yes, hospitals are in a dilemma. We need to establish comprehensive collaborations with the hospital president’s office, the pharmacy department, the nursing department, and the medical affairs department. The primary issue to address is why hospitals should develop commercialized CAR-T therapies rather than treating it as a medical technology and developing in-house CAR-T products.

However, regarding investigator-initiated trials (IITs), the stance of the National Health Commission (NHC) and the Center for Drug Evaluation (CDE) is quite clear: such trials must first undergo approval and filing. Furthermore, IITs should not employ disguised charging methods, and payment cannot be made for unconfirmed efficacy.

Therefore, I believe that commercialized CAR-T therapy is vibrant, as it provides patients with more predictable efficacy and safety.

Since the approval of two commercialized products last year, this pathway has become increasingly mature. For us, a key priority is to leverage the window of opportunity presented by favorable policies to gradually streamline intermediate processes and steadily expand commercialization.

VB New Medicine:JW Therapeutics’ commercial manufacturing capacity is primarily located in Suzhou. Given that the Department of Hematology at the First Affiliated Hospital of Soochow University is among the top-tier in China, what collaborations currently exist between JW Therapeutics and this hospital?

Wu Qiong:Suzhou is currently our primary commercial production base. Last year, we established a strategic alliance with the First Affiliated Hospital of Soochow University. In the future, we may explore new business models in Suzhou. For instance, in the field of cellular immunotherapy, could enterprises not only sell products but also establish CAR-T collaboration centers with hospitals? These are all models worth exploring.

Furthermore, we are currently engaged in discussions with several overseas insurance companies regarding potential collaborations. Although our relmacabtagene autoleucel injection is priced at RMB 1.29 million in China, it remains more affordable compared to the $410,000 price tag abroad. Could we see a “Dying to Survive 2.0” scenario in the coming years? If Chinese CAR-T therapies become both newer and more cost-effective than their foreign counterparts, could we establish a pilot program in Suzhou to attract international patients for treatment in China, thereby extending access to a broader global patient population?

We are also exploring how to leverage policy innovations to expand our coverage across Southeast Asian countries. There are many new models to pursue, which is where the interest lies.

VBNewMed:What are the latest developments in commercial insurance? What will be the key focus areas going forward?

Wu Qiong:Huiminbao has progressed rapidly. On February 21 this year, we processed our first claim, providing a Hangzhou Huiminbao enrollee with the maximum payout of RMB 500,000. In late March, another Huiminbao policy in Ningbo saw a claim payment of RMB 508,000. Recently, the second Huiminbao claim case in Hangzhou has entered the claims settlement process. Additionally, one more case is expected to be settled soon under the Million Yuan Medical Insurance plan.

The reimbursement ratio varies by city; currently, the coverage cap in Hangzhou is RMB 500,000, while in Ningbo it reaches RMB 1 million.

The future will undoubtedly feature a multi-tiered payment system. However, this year we are focusing on integrating our product into Huiminbao (city-specific supplemental medical insurance), million-yuan medical insurance, and special drug insurance. To date, our product has been included in 44 million-yuan medical and special drug insurance plans, as well as 16 Huiminbao plans.

By participating in commercial medical insurance, we aim to lay the groundwork for future participation in national medical insurance negotiations. While inclusion in the national medical insurance scheme cannot be ruled out in the future, I believe that in a few years—once our second-line indications are approved and production costs are reduced through next-generation manufacturing technologies—we will be better positioned to meet the access criteria for national medical insurance, offering broader coverage at a lower cost.

Previously, to ensure rapid market entry and establish a leading competitive advantage, JW Therapeutics used imported raw materials and excipients during technology transfer and clinical trials. For a period after product approval, the company was still required to use the imported materials specified in the original manufacturing process.

This entails high costs. Indeed, cost has become the most pressing concern for the entire industry in the commercialization process.

JW Therapeutics’ plan is to significantly reduce costs this year by optimizing technologies and procedures to minimize raw material waste and scrap; in the medium term (2–3 years), to further lower costs by substituting imported materials with domestically sourced supplies; and in the long term (3–5 years), to reduce the cost of next-generation CAR-T products through new processes and technologies.

VCBeat New Medicine:The industry is particularly concerned about cost issues. Which components currently have relatively high costs?

Wu Qiong:Our selling price is RMB 1.29 million, which includes value-added tax (VAT) and logistics costs. We are fully aware of the need to reduce costs as quickly as possible. Generally, costs can be divided into three categories: labor costs, fixed assets, and raw materials. Currently, raw material costs account for the largest proportion, while labor costs are relatively lower.

By the end of last year, our product had been commercialized for less than four months; therefore, the annual performance data disclosed was not statistically significant. As we continue to advance our commercial production and complete a full fiscal year, the resulting data is expected to be more meaningful.

VBNewMed:What Are the Pathways and Objectives of Cost Control?

Wu Qiong:First, we will gradually validate the substitution of certain domestically produced materials to continuously improve our gross profit margin. Material substitution is a dynamic process, and we will release more specific data in the second half of the year. We expect that domestic substitution will reduce the short-term cost of raw material manufacturing to approximately 40–50% of the original level within the next one to two years. We remain confident in our ability to lower costs this year.

In the medium to long term, we have strategic technical iterations and updates, including the substitution of certain key raw and auxiliary materials. This requires conducting validation clinical trials to provide data across different timeframes—some lasting six months, others one year, and some even two years. We will only implement these substitutions if they are proven to have no adverse impact on the product.

Overall, in the next phase, we will implement substitutions for certain critical materials and equipment. From a long-term perspective, we are pursuing a Next-G strategy focused on next-generation manufacturing technologies. This initiative is listed separately in our product pipeline because we clearly recognize that, in the field of cell immunotherapy, manufacturing processes define the product. Consequently, the impact of new process applications on product safety and stability must be re-evaluated and validated through clinical trials.

VBNewMed:Not long ago, Legend Biotech’s BCMA-targeted CAR-T therapy was approved in the United States. What are the key areas of focus for the entire cell-based immunotherapy industry this year? Will it also be a year marked by significant changes and uncertainties?

Wu Qiong:In my view, cell therapy is in a phase of accelerated development. In the past, the industry focused more on upstream investment and R&D pathways. However, this year marks the first full year of commercialization for both us and Fosun Kite. We are pleased to see new products approved overseas, while in China, some companies will gradually enter the market. Their participation will further propel the industry to new heights.

Secondly, emerging approaches such as CAR-NK and UCAR-T, which are currently of significant interest, will likely become a focal point for the industry over the next 1–2 years, particularly regarding whether these novel modalities can more clearly demonstrate equivalence or even superiority.

Of course, there is considerable debate over the feasibility of the CDMO model in cell immunotherapy commercialization, which is likely to become a hot topic. Investors are most concerned with whether cell immunotherapy can achieve both critical acclaim and strong market performance. In other words, how rapidly can our commercialization model grow, how low can costs be reduced, and can an internally sustainable profitable model be achieved? I believe this is also the primary concern of the industry.