Hansoh Pharma Strikes $2.01B Global Deal with Merck for Oral GLP-1 Agonist HS-10535

On December 18, 2024, Hansoh Pharma and MSD jointly announced that they had signed a global exclusive licensing agreement for HS-10535 (an investigational oral small molecule GLP-1 receptor agonist).

According to the agreement, Hansoh Pharma granted MSD global exclusive rights to develop, manufacture, and commercialize HS-10535. Hansoh Pharma will receive an upfront payment of $112 million and is eligible to obtain milestone payments of up to $1.9 billion based on the development, regulatory approval, and commercialization progress of the drug candidate. Additionally, Hansoh Pharma will also receive royalties based on product sales (the total amount of this collaboration could reach up to $2.012 billion, approximately RMB 14.66 billion). Under specific conditions, Hansoh Pharma may co-promote or exclusively commercialize HS-10535 in China.

In China's pharmaceutical industry, there has always been a saying: "For innovation in China's pharmaceuticals, look to Jiangsu; for innovation in Jiangsu's pharmaceuticals, look to Lianyungang." This fertile ground of Lianyungang has given rise to leading pharmaceutical companies such as Hansoh Pharma, Hengrui Medicine, Kangyuan Pharmaceutical, and Zhengda Tianqing, continuously delivering several groundbreaking new drugs to China's pharmaceutical industry.

Among them, Hansoh Pharma (Hansoh Pharmaceutical Group Company Limited) was founded in 1995. It has subsidiaries such as Hengsen Pharmaceuticals, Changzhou Hengbang Pharmaceuticals, and Hansoh Biomedical. The company focuses on areas such as anti-tumor, anti-infective, central nervous system diseases, metabolic diseases, and autoimmune diseases. It was listed on the Hong Kong Stock Exchange in June 2019 (03692.HK).

As a leading pharmaceutical enterprise in China, Hansoh Pharma has consistently ranked among the top 100 global pharmaceutical companies and within the top three of China's best industrial enterprises for pharmaceutical R&D product lines for many years. It is a key national high-tech enterprise and a national model enterprise for technological innovation. Behind its growth lies the dedication of the group's founder, Ms. Zhong Huijuan.

In the eyes of most outsiders, Zhong Huijuan is best known as the wife of Sun Piaoyang, chairman of Hengrui Medicine, dubbed the "leading figure in the pharmaceutical industry." Due to the marital relationship between Zhong Huijuan and Sun Piaoyang, as well as the equity ties between Hansoh Pharma and Hengrui Medicine, there have been many questions raised about the two. In December 2015, the Shanghai Stock Exchange issued an inquiry letter regarding the ambiguous relationship between Hengrui Medicine and Hansoh Pharma, requesting clarification on whether the two companies were operating as a "pharmaceutical couple's shop," "shadow company," or "indistinguishable entities."

After verification with relevant documents, it was proven that Hansoh Pharma and Hengrui Medicine have a clear relationship and both operate legally. However, doubts persisted and controversies continued. It wasn't until Zhong Hujuan developed Hansoh Pharma into a publicly listed company that her status as the "Queen of Pharmaceuticals" and "Pharmaceutical Tycoon" came to the forefront, silencing the skeptics. In 2020, this hardworking "Queen of Pharmaceuticals," Zhong Hujuan, claimed the top spot on the "2020 Hurun Global Self-Made Women Billionaires List" with a net worth of 106 billion yuan.

Under the leadership of Zhong Huijuan and the company's core team, Hansoh Pharma achieved a total revenue of 6.506 billion yuan in the first half of 2024, representing a year-on-year increase of 44.2%. Of this, revenue from innovative drugs and collaborative products reached approximately 5.032 billion yuan, accounting for 77.4% of total revenue, successfully transforming into an innovative biopharmaceutical company focused on the development and sales of innovative drugs.

Currently, Hansoh Pharma has established four research and development centers in Maryland, USA, and in Shanghai, Changzhou, and Lianyungang, China, with over 1,700 professional R&D personnel. The company has built a comprehensive R&D system covering the entire process from frontier information collection, compound design and screening, pharmacological and toxicological studies to clinical medical research. It has also created several national-level R&D institutions, including a National Enterprise Technology Center, a Postdoctoral Research Station, and a State Key Laboratory. Hansoh Pharma possesses efficient capabilities in discovering innovative large-molecule and small-molecule drugs, with an R&D layout covering monoclonal antibodies, ADC drugs, siRNA, bispecific antibodies, and fusion protein products. Currently, the company has over 30 innovative drug projects conducting more than 50 clinical trials, forming a rich and competitive R&D pipeline.

In terms of innovation, Hansoh Pharma has received approval for the market launch of seven innovative drugs, including six first-in-class new drugs independently developed in China: Ameile (Aumolertinib), China's first third-generation EGFR-TKI; Haosen Xinfu (Flumatinib), China’s first second-generation TKI for chronic myeloid leukemia; Hengmu (Tenoforvir Alafenamide Fumarate), China’s first oral anti-hepatitis B virus drug; Shengluolei (Epoetin Lambda), the world’s only approved EPO mimetic peptide; Fulaimai (Liraglutide), China’s first once-weekly GLP-1RA formulation; Milinda (Minocycline Nitroimidazole), the first innovative anti-anaerobic drug globally in 40 years; and Xin Yue (Inebilizumab), a humanized CD19 monoclonal antibody introduced as the world’s first treatment approved for adults with AQP4 antibody-positive NMOSD.

Regarding the pipeline HS-10535 in this transaction, Hansoh Pharma has not officially disclosed information such as its indications, clinical trial phases, or research data. However, in a press release, Hansoh Pharma quoted a comment from an MSD executive: "Through this agreement, we will leverage our research experience in incretin biology to evaluate the potential of HS-10535, including the possibility of providing additional cardiometabolic benefits beyond weight loss." From this perspective, MSD values the drug's potential in areas such as weight management and cardiovascular health.

In fact, this is not the first time that MSD has laid out GLP-1 drugs.

In August 2020, MSD entered into an exclusive licensing agreement with Hanmi Pharmaceutical. Under the agreement, MSD will obtain the exclusive rights to develop, manufacture, and commercialize efinopegdutide (HM12525A) in the United States and globally. Efinopegdutide is a once-weekly glucagon-like peptide-1/glucagon receptor (GLP-1/GCGR) dual agonist developed by Hanmi, intended for the treatment of non-alcoholic steatohepatitis (NASH). Public information indicates that the drug also has indications for diabetes and weight loss.

On the other hand, this is not the first time that China's GLP-1 drugs have been recognized by leading MNCs.

In November 2023, AstraZeneca announced an exclusive licensing agreement with Shanghai Chenge Bio, under which AstraZeneca will develop and commercialize the small molecule GLP-1 receptor agonist ECC5004 discovered by Chenge Bio for the potential treatment of obesity, type 2 diabetes, and other comorbidities. According to the terms of the agreement, Chenge Bio will receive an upfront payment of $185 million and is also eligible to receive up to $1.825 billion in future clinical, regulatory, and commercial milestone payments, as well as royalties. AstraZeneca will obtain exclusive development and commercialization rights to ECC5004 in all regions outside of China. In China, Chenge Bio and AstraZeneca will collaborate on the co-development and co-commercialization of ECC5004.

In addition to the aforementioned MNC giants, Novo Nordisk, Eli Lilly, Roche, Amgen, Pfizer, and Boehringer Ingelheim are also racing fiercely in this field.GLP-1 Class (including GLP-1 receptor agonists, GLP-1R/GIPR dual agonists, GLP-1R/GCGR dual agonists, and related drugs), a new type of hypoglycemic and weight-loss medication, is becoming a highly sought-after project by MNCs. Novo Nordisk's semaglutide is also expected to become the next "blockbuster drug."

In China, Novo Nordisk's semaglutide patent will expire in 2026, and a large number of domestic generic drug companies have already entered this field, preparing to join the commercial competition phase. As of November 20, 2024, four weight-loss products targeting GLP-1R and GLP-1R/GIPR have been approved in China, developed by Huadong Medicine, Renhe Biotechnology, Novo Nordisk, and Eli Lilly. In the domestic clinical stage, even more companies are working on GLP-1-based weight-loss pipelines, including Innovent Biologics, Chengdu Bright Future, CSPC, Livzon Group, United Laboratories, Shenzhen Hanmi, HuiSheng Pharmaceuticals, Jiuyuan Gene, Wanbang Medicine, Hansoh Pharma, Gan & Lee Pharmaceuticals, Gmax Biopharm, Zhi Tai Biotech, Derui Pharmatech, Hengrui Medicine, and BrightGene Bio-Medical.

However, with the high standards set by Novo Nordisk's Wegovy and Eli Lilly's Zepbound in the GLP-1 weight loss sector right from the start, upcoming competitors will need to demonstrate advantages in efficacy, safety, or convenience to stand a chance against Novo Nordisk and Eli Lilly. New types of GLP-1 drugs, such as oral administration and dual-target options, are key areas that major pharmaceutical companies are focusing on for future development.

Moreover, as various products gradually enter the market, GLP-1类产品 also have a huge demand in terms of production capacity. Since this year, both Novo Nordisk and Eli Lilly have invested in building factories in China to expand their production capacity. It can be foreseen that after the competition in technology and products reaches a certain stage, the GLP-1 track will soon witness competition in products and prices. We look forward to more亮眼的数据 from China's GLP-1 pipelines, gaining wider recognition from multinational corporations (MNCs), and bringing better products to patients as soon as possible.

References:
1. "The Evolution of the 'Medicine Queen': From Chemistry Teacher to Earning 167 Million Yuan a Day"
2. "More Than $2 Billion! MSD Acquires Global Rights to Hansoh Pharma's Oral Weight Loss Drug"