MNCs Accelerate Acquisition of Chinese Innovative Drugs, Sparking a Global 'Buying Spree'

Dec 10, 2024 07:30 CST Updated 07:30

CR PHARMA COMM

Pharmaceutical Circulation Service Provider

Biokin

Pharmaceutical R&D Developer

Bristol-Myers Squibb

Biopharmaceutical and Nutritional Product R&D and Sales

AstraZeneca

Biopharmaceutical Manufacturer

CSPC

Developer of finished drugs and active pharmaceutical ingredients

Novartis

Drug Development and Manufacturing

Boehringer Ingelheim

Developer of Innovative Drugs and Therapies

Sinopharm

Pharmaceutical and Medical Device Distributors and Supply Chain Service Providers

Source: PharmaBlock

Author:YiyiEditor: Vitamin

On November 26, 2024, Pfizer Investment Co., Ltd. and China Resources Pharmaceutical Commercial Group Co., Ltd. officially signed a strategic cooperation agreement, under which CR PHARMA COMM obtained the commercial promotion rights for four key oncology drugs from Pfizer. The collaboration will officially commence on December 1st, and employees affected by this partnership will attend an offline communication session in Shanghai. Final employee placement will be completed by the end of December.

The four drugs involved in this transaction have been on the Chinese market for many years, namely Aromasin (AROMASIN, Exemestane), Ibrance (IBRANCE, Palbociclib), Pharmorubicin RD (Pharmorubicin RD, Epirubicin Hydrochloride), and Xalkori (XALKORI, Crizotinib).

China, as the world's second-largest pharmaceutical market,It is expected to exceed one trillion RMB by 2025.For large multinational pharmaceutical companies worldwide, the revenue share from the Chinese market is crucial. Original research-based pharmaceutical companies, leveraging their first-mover advantage, are typically able to quickly capture the majority of market share in relevant fields during the early stages.

However, judging from the recent developments of Pfizer's four key oncology drugs, as pharmaceutical policies and economic conditions change, the environment of China's pharmaceutical market is becoming increasingly complex, and the difficulty of drug promotion continues to rise.

Against this background,Multinational pharmaceutical companies choosing to cooperate with local distribution enterprises can, to a certain extent, optimize the supply chain and reduce operating costs., enhance its penetration in the Chinese market, particularly in lower-tier cities and grassroots medical institutions, to avoid impacts from market access barriers and policy changes. Meanwhile, multinational pharmaceutical companies can focus their resources on core competitive areas such as new drug development.

MNC Authorization Trading Boom Approaches

In the current pharmaceutical market, multinational corporations (MNCs) are frequently engaging in licensing deals, especially in the fields of antibody-drug conjugates (ADCs) and bispecific antibodies, presenting a booming landscape.

According to statistics,In the first nine months of 2024, global pharmaceutical companies reached 31 deals on bispecific antibody drugs, far surpassing any single year in the previous three years.In the ADC field, there have been several significant deals this year. For instance, Merck acquired the global exclusive license for LM-299, a PD-1/VEGF bispecific antibody developed by Limin Pharmaceuticals, with an upfront payment of $588 million; BioNTech acquired Promab with an upfront payment of $800 million, obtaining full rights to its bispecific antibody drug development platform and pipeline of candidate drugs. Meanwhile, Biokin reached an exclusive licensing and cooperation agreement with Bristol-Myers Squibb for the BL-B01D1 (EGFR×HER3 bispecific antibody ADC) project, with a potential total transaction value of $8.4 billion.

These frequent licensing deals indicate that MNCs are paying increasing attention to China's pharmaceutical market, and also reflect the growing influence of China's innovative drugs in the global pharmaceutical field.

Typical Cases

Biokin's "Going Overseas" Legend

Biokin and Bristol-Myers Squibb have reached a collaboration with an exclusive license and cooperation agreement, which has attracted widespread attention in the pharmaceutical market, with a potential total transaction value of up to 8.4 billion US dollars.

Biokin's BL-B01D1 is an ADC based on a bispecific topoisomerase inhibitor that can simultaneously target both epidermal growth factor receptor and human epidermal growth factor receptor 3 (EGFR×HER3). It is currently in Phase II clinical trials and has demonstrated promising anti-tumor activity in patients with non-small cell lung cancer and breast cancer whose disease has progressed after standard treatment.

In this collaboration, BMS will pay SystImmune, a wholly-owned subsidiary of Biokin, an upfront payment of 800 million USD and near-term contingent payments of up to 500 million USD. Upon achieving development, registration, and sales milestones, SystImmune will receive additional payments of up to 7.1 billion USD. The two parties will collaborate to advance the development and commercialization of BL-B01D1 in the United States. SystImmune will exclusively oversee the development, commercialization, and production of BL-B01D1 in mainland China through its affiliates and will also be responsible for manufacturing part of the drug supply for regions outside mainland China. BMS will have exclusive responsibility for the development and commercialization of BL-B01D1 in other global regions.

This collaboration holds significant importance for China's innovative drug industry.On the one hand, it has brought sufficient financial support for Biokin's R&D, showcasing the value and potential of China's innovative drugs in the global pharmaceutical field. On the other hand, it has also set an example for other domestically produced innovative drug companies in China, encouraging more enterprises to increase their innovation and R&D efforts and actively expand into the international market.

CSPC's Breakthrough in Lipid-Lowering

CSPC Pharmaceutical Group Limited and AstraZeneca have reached an exclusive licensing agreement to advance the development of a preclinical innovative small molecule lipoprotein(a) inhibitor, YS2302018. AstraZeneca will obtain the exclusive global rights for the development, manufacturing, and commercialization of YS2302018.

CSPC will receive an upfront payment of US$1.0 billion and is entitled to potential development milestone payments of up to US$370 million, potential sales milestone payments of up to US$15.5 billion (totaling US$19.2 billion), as well as tiered sales royalties.

YS2302018 has the potential to bring more benefits to patients with dyslipidemia. It was discovered by CSPC's AI-driven small molecule drug design platform, demonstrating excellent pharmacokinetic properties and superior efficacy in both in vitro and animal models, without significant safety risks.

The characteristic of this novel small-molecule lipid-lowering drug lies in its effective binding with Apo(a), thereby preventing its assembly with ApoB-100 particles to form Lp(a). As one of the significant breakthroughs in the prevention and treatment of cardiovascular diseases, it may serve as a monotherapy or combination therapy, including being used in conjunction with the oral small-molecule PCSK9 inhibitor AZD0780, further strengthening AstraZeneca's cardiovascular product pipeline.For details, see:Over $2 Billion! AstraZeneca Partners with CSPC to Target Lipid-Lowering Drug Market。

Its market prospects are broad, with more than 8 million people worldwide suffering from elevated Lp(a) levels and cardiovascular diseases, resulting in 2.6 million deaths annually.Currently, there are no approved lipid-lowering drugs targeting Lp(a) available globally, and this drug is expected to become a new therapy for controlling cardiovascular risk in populations with high Lp(a).

Chengdu Baiyu Pharmaceuticals Co.,ltd.'s Anti-Tumor Collaboration

Chengdu Baiyu Pharmaceuticals Co., Ltd. has signed an exclusive licensing agreement with Novartis for a small molecule anti-cancer drug. According to the agreement, Baiyu will receive a $70 million upfront payment, as well as up to $1.1 billion in milestone payments related to development, registration, and commercialization, along with corresponding royalties. Novartis will obtain the global exclusive rights for the development and commercialization of this innovative small molecule drug. For more details, see:Chengdu Baiyu Pharmaceuticals Co., Ltd. Signs Exclusive Licensing Agreement with Novartis for an Investigational Small Molecule Anticancer Drug。

Chengdu Baiyu Pharmaceuticals Co., Ltd. focuses on drug development in the four major fields of central nervous system, oncology, autoimmune diseases, and anti-aging. It has successfully developed modern botanical drugs, "Ginkgo Biloba Lactone Injection" and "Ginkgo Total Lactone Dropping Pills." This collaboration showcases the company’s achievements in anti-tumor drug research and offers global patients a new potential option for cancer treatment.

BI Collaborates with Sinopharm Group Co.,Ltd.

Starting from January 1st next year, Sinopharm Group Co., Ltd. and Boehringer Ingelheim China will sign a strategic cooperation agreement. The two parties will cooperate on Boehringer Ingelheim's product Sifrol.^®(General Name: Pramipexole) and Pradaxa^®(General Name: Dabigatran Etexilate) will start cooperation for promotion in China from next year.

MNC Strategy Changes in China

Export Performance of China-Produced Bispecific Antibodies

Chinese-produced bispecific antibody drugs have been successively acquired by MNCs in the pharmaceutical market, a trend driven by various reasons and impacts.

First, from the market performance perspective, the global bispecific antibody drug market scale is continuously expanding. As of now,A total of 15 bispecific antibody drugs have been approved for marketing globally. The global bispecific antibody drug market sales exceeded $6 billion in the first half of 2024 and are expected to break through the $10 billion mark for the first time this year.Among them, the revenue of Amgen's Blinatumomab has been growing steadily and is expected to break the $1 billion mark this year; Roche's Emicizumab revenue has even exceeded $5 billion, becoming a blockbuster drug. Driven by these two bispecific antibody products, pharmaceutical companies have begun to refocus on bispecific antibody platforms.

Secondly, China's innovative drug companies have already secured a position in the global bispecific antibody field. Akeso Biopharma has received approval for the market launch of two bispecific antibody drugs, Cadonilimab and Eveci, each with the distinction of being the world's first. Driven by the increasing adoption of bispecific antibody drugs, Akeso Biopharma’s performance has entered an era of explosive growth. Content expansion:Akeso, the leading dual-antibody company, is about to play its "next ace"。

In addition, Biokin has developed a bispecific ADC based on its bispecific antibody technology. The bispecific ADC drug BL-B01D1, which set a record for the highest upfront payment in an overseas deal, demonstrated breakthrough efficacy in Phase I clinical studies published in the prestigious journal *The Lancet Oncology*. The results showed significant effects across various solid tumor patients who had failed previous treatments.

Chinese-produced bispecific antibody assets have successively gained favor from multinational corporations (MNCs), partly because bispecific antibody platforms in China have frequently been involved in major deals.Such as Merck paying $700 million upfront for the CD3/CD19 bispecific antibody drug CN201 from Tongrun Bio, and acquiring the global exclusive license for LM-299, a PD-1/VEGF bispecific antibody from Limin Pharmaceuticals, with a $588 million upfront payment; BioNTech acquiring Promab for $800 million upfront, obtaining full rights to its bispecific antibody drug development platform and candidate drug pipeline.On the other hand, the "Akeso Effect" is fermenting, and multinational corporations (MNCs) are recognizing the enormous potential of PD-1/VEGF bispecific antibodies held by China's Biotechs, attempting to find the next "Ivonesc."PD-1/VEGF bispecific antibodies currently under research in China include SSGJ-707 from 3SBio/Genor Biopharma, RC148 from RemeGen, JS207 from Junshi Biosciences-U, SCTB14 from Sinocelltech-U, B1962 from Tasly, and others, all of which are at different stages of clinical research.

The Export of China-Produced Bispecific Antibodies is Booming, Significantly Impacting the Pharmaceutical Industry in China. On one hand, it has brought substantial financial returns to domestic innovative drug companies, enabling them to further increase R&D investment and enhance innovation capabilities. On the other hand, it has also showcased the strength and potential of China's innovative drugs in the bispecific antibody field to the world, providing opportunities and confidence for domestic innovative drug companies to expand into international markets.

MNCs Rush to Acquire Chinese Assets in China

MNCs in China Are Gradually Fading Out the Logic of Selling Drugs and Starting to Aggressively Purchase Chinese Assets. This Strategic Shift Is Mainly Reflected in the Following Aspects:

First, the changes in the situation of MNCs in China can be seen from the CIIE.At the CIIE, MNCs not only launched more "Made in China" productsSuch as Takeda's introduction of BBM-H901 injection from Belief Biomedical and Novartis' launch of a renal disease product portfolio after acquiring Sinopharm Ruihe.At the same time, it is actively seeking and linking more innovative medical assets in China.MNCs are increasingly investing in BD, with transactions becoming more frequent. Starting from 2023, a wave of BD activities in China's pharmaceutical industry has gradually emerged, and the momentum continued into 2024, becoming even more intense. The number of BD deals between MNCs and China's innovative drug sector has exceeded 80, with the total transaction value now approaching the $50 billion mark.

Secondly, the transaction assets are gradually extending from the mid-to-late stage to the early stage.Among nearly 40 BD deals completed by MNCs this year, over 80% were in Phase I clinical trials or earlier. For example, Novartis signed a major collaboration worth up to $4.1 billion with Bowang Pharmaceuticals for a Phase I clinical project.

Finally, MNCs not only strengthen their own pipelines through BD but also focus on "China-specific" demands.Focusing on ADCs, large-molecule drugs, and small-molecule drugs as the main areas, with ADCs being the hottest. At the same time, multinational corporations (MNCs) are also paying attention to local market demands in China. For example, Takeda has licensed BBM-H901 from Belief BioMed, targeting nearly 100,000 patients with Hemophilia B in China; AbbVie has heavily invested $1.7 billion to acquire the TL1A antibody FG-M701 from Mabgenix, focusing on inflammatory bowel disease, where the patient population in China is rapidly expanding and becoming increasingly younger, indicating a clear market demand.

The main reasons for this strategic shift are the continuous maturation of China's pharmaceutical industry, the significant narrowing of the gap between domestic pharmaceutical companies and multinational corporations (MNCs), and the gradual escalation of market measures such as the "National Reimbursement Drug List (NRDL) + Volume-based Procurement," which has greatly increased competitive pressure on MNCs. At this critical stage, Business Development (BD) is considered the most reasonable approach, as MNCs aim to participate more deeply in China’s healthcare innovation process to unlock greater market opportunities.

Opportunities for Collaboration in the Oncology Market

Taking the cooperation between China Biologic Products and Boehringer Ingelheim as an example, the collaboration between multinational corporations (MNCs) and local pharmaceutical companies in the oncology market has broad prospects. China Biologic Products and Boehringer Ingelheim announced a strategic partnership, under which both parties will leverage their respective strengths and resources to jointly develop and commercialize Boehringer Ingelheim's oncology pipeline in mainland China.

On one hand, BI's selection of China Biopharmaceutical as its most important oncology pipeline partner in the highly competitive Chinese market is a strong recognition of the company’s innovation capabilities and commercialization. China Biopharmaceutical ranks among the top five pharmaceutical enterprises in China’s oncology field, with over 40 innovative oncology pipelines and projects, a professional oncology sales team of nearly 3,000 people, and total oncology pipeline sales reaching 8.8 billion RMB in 2023.

On the other hand, both parties are "old money" pharmaceutical enterprises with a century-old history, sharing many similarities in innovative inheritance, stable management structures, and abundant cash flow.

In this collaboration, three cutting-edge anti-cancer drugs in the late clinical stage have attracted significant attention.

BrigimadlinIt is a highly effective, orally administered MDM2-p53 antagonist that inhibits the interaction between TP53 and its negative regulator MDM2, leading to tumor cell cycle arrest or apoptosis, and also possesses immunomodulatory functions. The drug's indication for dedifferentiated liposarcoma (DDLPS) has entered the pivotal Phase III clinical stage, and this indication has been granted Fast Track designation by the FDA. Additionally, the indication for biliary tract cancer (BTC) has received Orphan Drug designation.
ZongertinibAs a selective HER2 inhibitor, it has been granted Fast Track designation by the U.S. FDA.
DLL3/CD3The bispecific T-cell engager BI 764532 has also been granted Fast Track designation by the U.S. FDA, as well as Orphan Drug designation for the treatment of small cell lung cancer.

Deep Participation of Local Chinese Pharmaceutical Companies in the Strategic Layout of Multinational Pharmaceutical Companies Reflects International Recognition of Their Progress in Innovation and Commercialization. Amid Profound Changes in China’s Pharmaceutical Industry Environment, Collaboration Between Multinational and Local Chinese Pharmaceutical Companies May Become a Major Trend, Jointly Expanding the Oncology Market and Bringing More Innovative Treatment Options to Patients.

Future Outlook

The MNC-authorized transactions in the pharmaceuticals market have broad development prospects in the future and will continue to provide a strong driving force for the innovative drug industry.

From the market trend perspective, the global bispecific antibody drug market size is continuously expanding and is expected to break through the 10 billion USD mark for the first time this year. Chinese innovative pharmaceutical companies have already occupied an important position in the global bispecific antibody sector, with domestically produced bispecific assets successively gaining favor from multinational corporations (MNCs). This trend is expected to continue in the future. As more Chinese innovative pharmaceutical enterprises increase R&D investment and enhance innovation capabilities, more competitive bispecific antibody drugs will emerge, further driving the development of the global bispecific antibody drug market.

The Shift in MNCs' Strategies in China Will Also Bring New Opportunities to the Innovative Drug Industry. MNCs are Gradually Moving Away from the Drug-Selling Logic, Actively Acquiring Chinese Assets, with Transaction Assets Extending from Late-Stage to Early-Stage, Focusing on "China-Specific" Needs, with ADC, Large-Molecule Drugs, and Small-Molecule Drugs as the Main Battlegrounds. This Will Drive the Continuous Maturation of China’s Pharmaceutical Industry, Further Narrowing the Gap Between Domestic Pharmaceutical Companies and MNCs. In the Future, Cooperation Between MNCs and China’s Innovative Drug Enterprises Will Become Closer, Jointly Exploring Greater Market Opportunities.In the oncology market, the cooperation prospects between MNCs and local pharmaceutical companies are increasingly...Vast.

In addition, the continuous intensification of policies will also provide strong support for the development of the innovative drug industry. Driven by the implementation of the "Major New Drug Creation" policy and the acceleration of drug review and approval, China's innovative drug R&D capabilities have entered the ranks of international leaders. In the future, with more policy support and the launch of pilot programs for the review and approval of innovative drug clinical trials, the clinical advancement speed of innovative drugs will be greatly accelerated, bringing more opportunities for the development of the innovative drug industry.

In summary,The future development of MNC-authorized transactions in the pharmaceutical market is highly promising, set to inject significant momentum into the growth of the innovative drug industry.

References:

1. "2024 China Pharmaceutical Market Development Trends Report"

2. "Global Innovative Drug R&D and Market Landscape Analysis Report"

*Disclaimer: This article only introduces the research progress in the pharmaceutical and disease fields, briefly describes the research overview, or shares pharmaceutical-related information. It does not recommend any treatment or diagnostic plans, nor does it constitute any advice on related investments.If there are any omissions in the content, please feel free to communicate and point them out!

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