Drugmakers increasingly looking abroad
Innovation, talent recruitment and retainment all key to worldwide success
Chinese startup Jacobio Pharmaceuticals, founded in 2015, recently received a $20 million milestone payment from global pharmaceutical giant AbbVie, marking the first milestone payment following the initial upfront fee of $45 million at the outset of Jacobio and AbbVie’s collaboration inked in 2020.
The Hong Kong-listed startup is mainly engaged in the research and development of new drugs at the clinical stage. Its main drug development projects include JAB-3068 and JAB-3312.
The milestone payment was triggered by the inoculations of the first two patients in the Phase-1/2 clinical trial of its SHP2 inhibitor JAB-3312 in combination with PD-1 antibody pembrolizumab and MEK inhibitor binimetinib, respectively.
SHP2 is an oncoprotein associated with multiple cancers, as well as a potential immunomodulator. Inhibiting SHP2 activity is therefore of significant therapeutic interest as it can potentially reduce cancer cell growth and modulate immune responses to generate antitumor activities.
Jacobio is just one of an emerging group of Chinese pharmaceutical companies with ambitions to rely on in-house discoveries and develop global-standard first-in-class and best-in-class therapies. Such companies are mostly biotech and biopharmaceutical startups.
Many of them have been able to out-license their innovative products to big-name pharmaceutical giants rather than focusing on in-licensing.
Jacobio entered into a licensing agreement with AbbVie in May 2020 to develop and commercialize SHP2 inhibitors, including JAB3068 and JAB-3312.
According to the collaboration agreement, AbbVie will be granted an exclusive license to the SHP2 portfolio. Jacobio will continue to conduct early global clinical trials of JAB-3068 and JAB-3312 inhibitors, while AbbVie will cover the R&D expenses.
Upon completion of the trials, AbbVie will be in charge of global development and commercialization. Jacobio will exclusively develop and commercialize the SHP2 inhibitors in the Chinese mainland, Hong Kong and Macao. Jacobio will also receive royalties from AbbVie from global sales.
Wang Yinxiang, chairman and CEO of Jacobio, said the company is the second drug developer in the world to engage in clinical development of an SHP2 inhibitor drug candidate, following Novartis.
JAB-3068 received investigational new drug approval from the US Food and Drug Administration to enter clinical development in January 2018.
JAB-3312 received investigational new drug approval from both the USFDA and China’s National Medical Products Administration in 2019.
As of late June, there were only six companies worldwide with SHP2 inhibitors undergoing clinical trials, Wang said.
“When establishing the company, it was clear for us that we must focus on the global market, and to that end, only global-standard first-inclass drugs, rather than ‘me too’ approaches, will work. It will be of limited value for Chinese companies to develop fast-follower drugs, and for the next decade, opportunities will mainly be for companies that develop global-standard first-inclass drugs,” he said.
Since embarking on the collaboration, the company has been working with AbbVie to accelerate the global development of its SHP2 inhibitors in clinical trials via either monotherapy or in combination therapy modalities at more than 30 sites globally.
The company has several projects to file for investigational new drug approvals between 2021 and 2022, Wang said.
According to Liu Jubo, CEO of Chinese biologics company Evive Biotech, the nation’s pharmaceutical industry has been shifting from mainly producing generics to innovation-driven novel drug development, and strong independent R&D capability will be the core competence of companies seeking to achieve sustainable growth or expand their global footprint.
Evive recently filed its Biologics License Application for Ryzneuta (also known as F-627) with the USFDA, following successful conclusion of global Phase-3 clinical trials that met primary and secondary endpoints.
The drug is a novel treatment for chemotherapy-induced neutropenia — a common side effect of many forms of chemotherapy characterized by low levels of neutrophils, a type of white blood cell that fights infections.
A record 271 cross-border licensing partnerships were concluded last year between Chinese pharmaceutical companies and multinational companies, including Roche, Bayer, AbbVie and Pfizer, data from
ChinaBio showed. ChinaBio is a Shanghai-based consulting and advisory firm focusing on the domestic life sciences industry.
The figure represented an increase of nearly 50 percent from 2019 and more than 300 percent from 2015.
The largest out-licensing deal in 2020 was I-Mab Biopharma’s partnership with global drugmaker AbbVie Inc for the rights to lemzoparlimab — also known as TJC4 — which is an anti-CD47 monoclonal antibody discovered by the Shanghai-based company to treat multiple forms of cancer.
Anti-CD47 therapies are one of the most competitive branches in cancer drug development. The therapies target a signal that allows cancer cells to avoid being attacked by the patient’s own immune system.
According to the announcement in September 2020, the deal was estimated to be worth more than $2.9 billion.
In January this year, BeiGene Ltd and Novartis entered a collaboration and licensing agreement granting Novartis rights to develop, manufacture and commercialize antiPD-1 antibody tislelizumab in North America, Europe and Japan.
BeiGene will receive $2.2 billion from Novartis for the arrangement. The upfront cash payment will be $650 million and the company is eligible to receive up to $1.3 billion on reaching regulatory milestones, and $250 million on achieving sales milestones, in addition to royalties on future sales of tislelizumab in licensed territories.
Although most of the licensing deals between Chinese pharmaceutical companies and their foreign counterparts are in-licensing, the out-licensing deals are seeing quick growth because Chinese biotech and biopharmaceutical companies now eye not only the domestic market, but also the global market, industry experts said.
China’s biopharmaceutical industry has made enough breakthroughs to be able to conduct research and development for cutting-edge drugs. Also, it needs broader space than merely the domestic market to grow bigger, they said.
Already the second-largest pharmaceutical market in the world, China’s prescription drug market totaled 1.2 trillion yuan in 2020 sales, which, if excluding patent drugs of traditional Chinese medicine and generics, was only about 70 billion yuan. That was much smaller than the US market’s $900 billion, said Feng Ting, vice-president of Lilly Asia Ventures.
“The future of Chinese innovative pharmaceutical companies relies on successful global operations, because that is the only way for Chinese pharmaceutical companies to grow into international pharmaceutical giants,” said Wu Xiaobin, president of BeiGene.
Tislelizumab is the first drug from
BeiGene’s immuno-oncology biologics program being developed globally for the treatment of a broad array of both solid tumor and hematologic cancers.
The company has established a strong global product R&D and commercialization system, as well as advanced facilities and manufacturing techniques for production to support the launch and commercialization of more innovative drugs in overseas markets.
In November 2019, its Brukinsa (zanubrutinib) was approved by the USFDA to treat mantle cell lymphoma in adult patients, marking the first cancer treatment developed in China to be approved for the US market.
As of March, clinical trials conducted or planned by the company totaled more than 100, including 25 Phase -3 or potentially registration enabling clinical trials.
Amy Tang, a partner at Qiming Venture Partners, said that before 2015 there were almost no out-licensing deals between Chinese and foreign pharmaceutical companies.
“The out-licensing deals started to grow gradually since 2015 after China adopted a series of drug regulatory reforms to spur innovation and attract Chinese talent living overseas,” Tang said, adding that 2020 saw the largest number of out-licensing cases so far.
China’s innovative drug industry is undergoing a golden age of development because China has made great progress in encouraging the development of innovative drugs, especially in terms of attracting and cultivating talent and improving the regulatory environment, she said.
“It used to take an average of three years for an innovative drug to get investigational new drug approval in the past. Now the time span has narrowed to about three months,” Tang added.
The future of Chinese innovative pharmaceutical companies relies on successful global operations ...”
Wu Xiaobin, president of BeiGene Ltd