Luye Pharma Acquires Boan Biotech to Accelerate Global Expansion in Biologics

On December 1, 2019, Luye Pharma Group announced the acquisition of Shandong Boan Biotechnology Co., Ltd. (Boan Biotech) to accelerate the global expansion of its biologics business. According to the announcement, Luye Pharma acquired a 98% equity stake in Boan Biotech, thereby obtaining all of its products under development, antibody screening platform, intellectual property rights, antibody production platform, and other assets. This move enabled Luye Pharma to establish a complete industry chain in the biologics sector, encompassing research and development, manufacturing, and commercialization.

Under the agreement, Luye Pharma will pay the relevant fees in three stages, including an upfront payment of RMB 723.4 million and two final payments of RMB 361.7 million each.

Boan Biotech is a comprehensive biopharmaceutical company dedicated to the development of antibody products, including biosimilars and innovative drugs, with a focus on oncology, central nervous system disorders, diabetes, and immune diseases. Leveraging robust R&D capabilities in biologics, advanced technologies, and large-scale production capacity across the entire industry chain, Boan Biotech has positioned itself at the forefront of domestic macromolecular drug development. Over the past few years, the company has accumulated extensive experience in antibody generation and lead optimization, cell line establishment and process development, as well as pilot-scale and commercial manufacturing. It owns proprietary platforms including transgenic mice for fully human antibodies, phage display technology, and nanobody platforms. In addition to China, the company is also engaged in biologic product development for the U.S. and European Union markets.

Luye Pharma, a member of Luye Life Sciences Group, is an international pharmaceutical company dedicated to the research and development, manufacturing, and sales of innovative drugs, with a focus on four therapeutic areas: central nervous system (CNS), oncology, cardiovascular, and digestion and metabolism. Among these, CNS and oncology are its core strategic areas.

The acquisition of Boan Biotech will further strengthen Luye Pharma’s pipeline of investigational products, accelerate global business growth, and support its ambition to become a leading global pharmaceutical company. With the U.S. launch of its innovative formulations drawing nearer and other R&D pipelines reaching maturity, Luye Pharma is comprehensively advancing its next-phase strategic objectives and actively positioning itself to become a global innovative pharmaceutical company.

In addition to continuously strengthening its established advanced formulation technology platforms, Luye Pharma is actively pursuing technological transformation and upgrading, with a focus on key areas such as innovative biological antibodies, cell therapy, and gene therapy, which is critical to the successful realization of its next-phase strategy.

Biopharmaceuticals have become one of the fastest-growing and most innovative sectors in the global pharmaceutical industry. Public data indicate that the global biopharmaceutical market size is projected to grow from $228 billion in 2019 to $323 billion in 2023, representing a compound annual growth rate (CAGR) of 7%. Driven by substantial unmet medical needs, increasing R&D investment, significant advancements in biotechnology, and favorable policies, the market for biologics is expected to continue its growth trajectory in the coming years.

Amid rapid growth, the biopharmaceutical market also features exceptionally high barriers to entry, primarily including intensive integration of knowledge and skills, a complex development process spanning 8–10 years, technical non-replicability, challenging production and supply chain management, substantial capital investment, and stringent regulatory requirements, all of which impose high demands on pharmaceutical companies seeking to enter this field.

Luye Pharma regards its biologics business as a key growth opportunity in the coming years, and the addition of Boan Biologics will help Luye Pharma accelerate its entry into this field. Boan Biologics’ rich portfolio of biosimilars and innovative drugs, along with its high-quality assets in global clinical R&D and commercialization, is of significant strategic importance to Luye Pharma’s successful deployment of its biologics strategy.

Boan Biotech boasts a robust pipeline of investigational products spanning various stages of development, comprising biosimilars (which carry relatively lower clinical risk due to their well-established targets and mechanisms of action) and innovative drugs (with the potential to become first-in-class and/or best-in-class therapies within their respective product or indication categories).

Products in Development: Biosimilars

Among the eight biosimilar candidates in Boan Biotech’s pipeline, five have entered clinical development, including two (LY01008 and LY06006) currently in Phase III clinical trials and three (LY01011, LY09004, and LY01012) currently in Phase I/II clinical trials. Subject to successful clinical progress, these products are expected to receive regulatory approval in the coming years. Upon obtaining relevant marketing approvals, LY01008 and LY06006 are anticipated to be indicated for the treatment of colorectal cancer/non-small cell lung cancer and osteoporosis, respectively, while LY01011, LY09004, and LY01012 are expected to be indicated for bone metastases from solid tumors, neovascular (wet) age-related macular degeneration (AMD) and other indications, and metastatic colorectal cancer, respectively. The company’s other three preclinical biosimilar candidates—LY01015, LY05008, and TS1808—are being developed for various oncology indications, type 2 diabetes, and psoriasis, respectively.

Luye Pharma has strategically selected these products to address unmet medical needs and therapeutic indications with significant market potential in both China and globally. These products will bolster Luye Pharma’s expansion into diverse strategic therapeutic areas, such as orthopedics and ophthalmology. Furthermore, these biosimilars leverage proven therapeutic targets and mechanisms of action, supported by the extensive global use of their respective comparable and originator drugs. The portfolio of biosimilars and innovative drugs from Boan Biotech will be highly complementary to Luye Pharma’s existing core strengths in the central nervous system, oncology, cardiovascular, digestive, and metabolic sectors. This acquisition will help Luye Pharma maintain its position as a leading pharmaceutical enterprise in the Chinese market.

To maintain its leading position in this niche sector and ensure long-term sustainable growth, Luye Pharma previously licensed four biologic antibody drugs—LY01008, LY06006, LY01011, and LY09004—from Boan Biotech. These are biosimilars of Avastin®, Prolia®, Xgeva®, and Eylea®, respectively, and have progressed smoothly in clinical development since licensing. These products are also entering the Investigational New Drug (IND) application stage in the United States, Europe, or Japan markets.

InR&D Products: Innovative Antibodies

In addition to its biosimilar pipeline, Boan Biotech currently has more than ten candidate innovative biological products in development as novel antibody therapies. These products have the potential to become first-in-class and/or best-in-class drugs within their respective product classes and/or indication categories. Upon obtaining relevant marketing approvals, Boan Biotech’s novel antibody portfolio—comprising a diverse range of candidates targeting indications from solid tumors to asthma—is expected to further enrich Luye Pharma’s product portfolio through acquisition. These novel antibody products have the potential to provide Luye Pharma with substantial and excellent growth opportunities over the long term.

In addition to Boan Biotech’s pipeline products, the integration of its proprietary technology platforms into Luye Pharma will further strengthen Luye Pharma’s R&D and manufacturing capabilities, facilitating the discovery and development of next-generation novel therapeutics.

Boan Biotech holds intellectual property rights for its fully human antibody transgenic mouse technology, phage display technology, and nanobody platform, which can significantly supplement Luye Pharma’s current technical capabilities, particularly in the research and development of future new antibody candidate drugs. Boan Biotech has filed three patent applications in China to protect the manufacturing processes of its biosimilars LY01008 and LY09004, over 20 patent applications related to the protection of sequences for its innovative drugs, and holds one patent concerning a method for preparing transgenic animals capable of expressing human antibodies. These assets will substantially enhance Luye Pharma’s R&D strength and raise development barriers in the field of innovative biologics.

Meanwhile, Boan Biotech’s scientific research and academic teams, along with its end-to-end production platform, will further strengthen Luye Pharma’s existing R&D and manufacturing capabilities. In terms of supply chain resource integration, Boan Biotech’s antibody production platform boasts high-quality manufacturing capacity and stringent quality control, with existing facilities capable of meeting both clinical production requirements and future commercialization needs. Boan Biotech’s current production platform and manufacturing management team will help enhance Luye Pharma’s biologics manufacturing and quality management systems, further optimize the company’s biologics production efficiency, and reduce production costs. Furthermore, Boan Biotech’s production system can be integrated into Luye Pharma’s global supply chain, enabling faster market access for subsequent biologics in China and other global markets upon launch.

Regarding this acquisition, the management of Luye Pharma Group stated: “The addition of Boan Biotech will further broaden the Company’s portfolio of biologics, particularly innovative biological antibody drugs, and enhance our R&D and manufacturing capabilities in this field. Boan Biotech’s products and technologies will complement those of the Company, facilitating the strategic integration of resources and synergistic development across multiple business areas, including R&D, production, and marketing.”

Currently, Luye Pharma has extensively laid out its biologics product portfolio both domestically and internationally through independent R&D and international collaborations. In the United States, Luye Pharma collaborates with multiple cutting-edge biotechnology companies to develop next-generation innovative antibody products in the field of cancer immunotherapy, continuously increasing its R&D efforts and supply of new biologics. Biologics will serve as one of the core strategic focuses for Luye Pharma’s future business, further strengthening the company’s global product portfolio and core competitiveness. Luye Pharma is also committed to providing global patients with greater access to high-quality, innovative biologics.