Henlius Reports 2019 Full-Year Results: Multidimensional Innovation Highlights and Steady Progress in Globalization and Commercialization

On March 23, 2020, Henlius (2696.HK) announced its full-year results for 2019, sharing the company’s development progress and overall achievements over the past year.

As an international innovative biopharmaceutical company, Henlius aims to provide high-quality and affordable innovative biologics to patients worldwide, with its product portfolio covering oncology, autoimmune diseases, and other therapeutic areas. In 2019, Henlius generated operating revenue of approximately RMB 90.9 million, primarily driven by sales growth from the commercialization of its products. In February 2019, the company’s first product, Hanlikang® (HLX01), received official approval from the National Medical Products Administration (NMPA), becoming China’s first biosimilar. The domestic sales of Hanlikang® are handled by Jiangsu Fosun, a subsidiary of Fosun Pharma, the controlling shareholder of Henlius. Henlius is responsible for the manufacturing and supply of Hanlikang®, and shares equally with Fosun Pharma all net profits derived from the sales of HLX01 (Hanlikang®) in China.

While accelerating the commercialization of products under development, Henlius has intensified its R&D efforts, focusing on the development of follow-on products to build a sustainable and steadily growing pipeline of innovative therapies. In 2019, the company’s cumulative R&D expenditures amounted to approximately RMB 1.407 billion, representing a 44.66% increase from 2018. These funds were primarily allocated to expanding the product portfolio, preclinical research, clinical trials, and costs associated with the expansion of the R&D team.

Following the launch of Hanlikang®, Henlius has also made significant progress in the market approval processes for several of its core products. HLX02 (trastuzumab for injection) was submitted for regulatory review in both China and Europe, becoming the first “Chinese-origin” biosimilar whose Marketing Authorization Application (MAA) was accepted by the European Union. It has successfully passed the Good Clinical Practice (GCP) inspection by the European Medicines Agency (EMA), while the on-site Good Manufacturing Practice (GMP) inspection has been completed, with all activities advancing as scheduled.

The New Drug Application (NDA) for HLX02 and HLX03 (adalimumab injection) has been accepted by the National Medical Products Administration (NMPA) and included in the priority review program, with the potential to launch in 2020 to serve more patients. Patient enrollment for the Phase III clinical trial of HLX04 (a bevacizumab biosimilar) has been completed, and preparations are underway to submit the NDA to the NMPA.

The Company is also focused on the development of innovative biologics and combination oncology therapies, actively advancing the clinical development of multiple drug candidates across various global regions. HLX10, an anti-PD-1 monoclonal antibody independently developed by the Company, has successively received clinical trial approvals in the United States, Taiwan (China), and mainland China. Phase 2 monotherapy clinical trials are being conducted for MSI-H/dMMR (microsatellite instability-high/mismatch repair deficient) solid tumors and chronic hepatitis B, with the potential to file for marketing approval in late 2020 or early 2021 based on the Phase 2 study results.

While actively advancing the clinical development of monotherapies, Henlius has fully launched its differentiated “Combo+Global” (combination therapy + globalization) strategy. Centered on HLX10, the company has initiated multiple clinical trials globally in combination with other agents to explore treatments for various solid tumors, including esophageal squamous cell carcinoma, lung cancer, liver cancer, gastric cancer, cervical cancer, and head and neck squamous cell carcinoma. Furthermore, the company is rapidly expanding its pipeline of innovative projects, having sequentially commenced clinical trials for novel drug candidates such as HLX07 (anti-EGFR monoclonal antibody), HLX20 (anti-PD-L1 monoclonal antibody), HLX22 (anti-HER2 monoclonal antibody), and HLX55 (anti-c-MET monoclonal antibody). It is also accelerating the preclinical development of other innovative products in its pipeline, including HLX26 (anti-LAG3 monoclonal antibody) and HLX23 (anti-CD73 monoclonal antibody).

The company’s current product pipeline extensively covers tumor-specific targets (such as EGFR, HER2, and c-MET), anti-angiogenic targets (such as VEGF and VEGFR), and tumor immunity-related targets (such as PD-1, PD-L1, and CTLA-4), all of which hold significant market potential. Notably, for innovative targets like c-MET, no specific drugs have yet been approved globally. HLX55 is poised to become the first-in-class anti-c-MET monoclonal antibody. In addition to efficiently and specifically blocking the binding of c-MET to its ligands, HLX55 offers a unique advantage: it can simultaneously induce c-MET internalization and degradation. Through this dual mechanism of action, HLX55 enhances the inhibition of the c-MET signaling pathway, thereby potentially demonstrating superior anti-tumor efficacy in clinical settings.

During the R&D process, the Company has accumulated extensive research data and practical experience regarding target-antibody interactions across relevant biological pathways, as well as the relationship between antibody structure and efficacy. Leveraging the Group’s comprehensive bispecific antibody development platform, innovative technologies such as its humanized alpaca single-domain antibody phage display library with industry-leading capacity, and robust clinical trial operational capabilities, the Company is poised to achieve significant breakthroughs in the development of bispecific antibodies targeting PD-1, PD-L1, EGFR, HER2, and other targets within a relatively short timeframe.

Henlius Innovation R&D Progress

Henlius has established phased capacity planning aligned with its product development cycles. Leveraging its robust quality management system, the Company has progressively enhanced and refined its large-scale manufacturing capabilities to achieve cost-effectiveness and effectively reduce production costs. The Company has completed the construction of its biologics manufacturing facility (Xuhui Site) in the Caohejing Hi-Tech Park, Shanghai. Built in accordance with international quality standards, the facility covers a total area of approximately 11,000 square meters and has a production capacity of 14,000 liters. The Xuhui Site and its accompanying quality management system have successfully undergone multiple on-site inspections and audits by the EU Qualified Person (QP) and the Company’s international commercial partners, and have completed the European Medicines Agency (EMA) GMP on-site inspection. The facility is capable of meeting the Company’s current clinical and commercial manufacturing needs.

To further optimize capacity planning and prepare for the near-term commercialization of its products, the Company commenced construction of Songjiang Base (Phase I) in 2019. This facility is designed with a planned production capacity of 24,000 liters and includes filling and formulation lines. Meanwhile, the Company has also initiated the construction of Songjiang Base (Phase II), which covers an area of 200 mu. Designed and built in accordance with international GMP standards, this base fully leverages new continuous manufacturing technologies, aligns with Pharmaceutical Industry 4.0 benchmarks, and achieves automation, informatization, and intelligence in biopharmaceutical production. The piling works for Phase I of the project have been completed, along with the excavation support, foundation, and substructure works for the main production building. Upon full completion, the project will meet the commercial production needs of more than 20 innovative products.

Aiming to enhance the accessibility of high-quality biologics, Henlius continuously refines its overall commercial planning and product marketing strategies, establishing a comprehensive, innovative business operation model. The Company has built an in-house commercialization team for the domestic market to handle the commercial promotion of its core oncology products, including HLX02 (trastuzumab for injection), HLX04 (bevacizumab biosimilar), HLX07 (anti-EGFR monoclonal antibody), and HLX10 (anti-PD-1 monoclonal antibody), among other blockbuster oncology assets that are being progressively commercialized.

The Company’s commercial operations team comprises approximately 100 professionals with extensive industry experience in multinational pharmaceutical companies. It is organized into five core divisions: marketing, channel management, pricing and market access, domestic sales, and strategic planning. With a well-established organizational structure and clearly defined responsibilities, the team is well-positioned to leverage first-mover advantages, efficiently drive the Company’s commercialization efforts, and achieve steady growth in product sales volume. Meanwhile, the Company actively leverages its partners’ existing expertise in various product areas to support the commercial promotion of its products. Drawing on the commercialization experience gained from Hanlikang®, the Company plans to entrust Jiangsu Wanbang with the domestic commercial sales of HLX03 (adalimumab injection) following its market launch.

Guided by its mission and strategic positioning, Henlius is actively advancing its global footprint and accelerating the implementation of its international operational strategy. The company’s three R&D centers—located in Shanghai, China; Taipei, China; and California, USA—work in close collaboration to create synergies and efficiently drive R&D progress.

Furthermore, the company has established a comprehensive presence in the international market by entering into strategic commercial partnerships with global pharmaceutical companies such as Accord, Cipla, Biosidus, Jacobson, KG Bio, and Farma De Colombia. To date, it has signed commercial cooperation agreements for multiple core products, including Hanlikang, HLX02, and HLX10, covering nearly 100 countries and regions across Europe, Latin America, Southeast Asia, the Middle East, and North Africa. In June 2019, the company partnered with Accord to successfully submit and gain acceptance for the marketing authorization application for HLX02 (trastuzumab for injection) to the European Union, thereby advancing the regulatory approval process for HLX02 in the EU.

While expanding into the mainstream biopharmaceutical markets of Europe and the United States, the Company has prioritized the development of emerging markets as a key component of its global strategy. In September 2019, the Company reached a cooperation agreement with KG Bio, granting KG Bio exclusive rights to develop and commercialize HLX10 (an anti-PD-1 monoclonal antibody) for certain indications and combination therapies in ten Southeast Asian countries. Under this agreement, the Company is eligible to receive total transaction proceeds of up to USD 692 million, comprising an upfront payment of USD 10 million, milestone payments totaling no more than USD 672 million, fixed royalties, and USD 10 million in funding support for two upcoming combination therapy trials of HLX10 initiated by the Company. In 2019, the Company recognized approximately RMB 2.6 million in revenue from this collaborative service.

Henlius' Global Strategic Layout

Mr. Zhang Wenjie, President of Henlius, stated:2019 was a milestone year in the development of Henlius. During this year, the company officially listed on the Hong Kong capital market, entering a new phase of development. It also witnessed the launch of Hanlikang® (rituximab), China’s first biosimilar, marking the beginning of a new stage in commercialization. Moving forward, we will continue to uphold international quality standards, further strengthen lean operational management, drive the implementation of our commercial strategic plans, and actively seek collaboration with like-minded partners across various sectors to accelerate our mission of benefiting patients worldwide.

Dr. Liu Shigao, Co-founder and Chief Executive Officer of Henlius, stated:Innovation and internationalization are the two most critical development strategies for Henlius. Guided by the core philosophy of “affordable innovation,” we have initiated and will continue to advance comprehensive, multi-dimensional innovation. Beyond R&D innovation, we will place greater emphasis on technological, process, business model, management, and strategic innovation, thereby intensifying our overall innovation efforts. Meanwhile, we must remain steadfast in our corporate mission and vision, boldly expand globally, strive for world-class competitiveness, and make high-quality innovative biologics accessible to more patients worldwide!

Henlius (2696.HK) is an international innovative biopharmaceutical company dedicated to providing high-quality, cost-effective innovative biologics to patients worldwide, with a product portfolio covering oncology, autoimmune diseases, and other therapeutic areas. Since its establishment in 2010, the company has adhered to a product development philosophy centered on global collaboration and integrated innovation. With R&D centers located in Shanghai, China; Taipei, China; and California, USA, Henlius possesses significant advantages in synergistic efficiency.

Henlius’ core product development strategy integrates biosimilars with innovative R&D. Starting with biosimilars, the company has progressively developed innovative monoclonal antibody (mAb) products. By combining its self-developed anti-PD-1 and PD-L1 mAbs, Henlius pioneered immuno-combination therapies in China. It has proactively built a diversified pipeline of innovative mAbs and tumor immuno-combination therapies, establishing an integrated biopharmaceutical platform encompassing research, development, and commercial-scale manufacturing.

To date, Henlius has successfully launched one product, had its new drug applications accepted for two products in China, and had its new drug application accepted for one product in the European Union. Furthermore, 15 products and eight combination therapy regimens are currently undergoing more than 20 clinical trials worldwide. Notably, the company’s first blockbuster product, Hanlikang® (rituximab injection), received approval for new drug registration from the National Medical Products Administration (NMPA) in February 2019, becoming the first biosimilar approved for marketing in China.

HLX03 (adalimumab injection) and HLX02 (trastuzumab for injection) have had their new drug applications accepted by the National Medical Products Administration (NMPA) and have been included in the priority review program. HLX02 has successively launched international multicenter Phase III clinical trials in mainland China, Ukraine, Poland (European Union), and the Philippines, becoming the first biosimilar in China to conduct international multicenter Phase III clinical studies. Its marketing authorization application was accepted by the European Medicines Agency (EMA) in June 2019.

Furthermore, the Company has progressively initiated multiple tumor immunotherapy combination regimens involving HLX10 in conjunction with its proprietary products—HLX04 (a bevacizumab biosimilar) and HLX07 (an anti-EGFR monoclonal antibody)—as well as chemotherapy, and is conducting multiple clinical studies globally.