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In the first half of this year, 51 domestic bio-innovative pharmaceutical companies are in full swing. Some of them will apply for U.S. Food and Drug Administration (FDA) approval as the first step to enter the global market.

After nearly ten years of development, my country has become one of the few developing countries in the world that can independently develop innovative biological drugs. Moreover, many innovative drugs approved for marketing in my country in the past two years are the first in the world. Many Chinese bio-innovative pharmaceutical companies with globalization ambitions choose to enter overseas markets. Industry analysts pointed out that internationalization has become a relatively clear direction for the development of my country's biopharmaceutical industry.

During the "Thirteenth Five-Year Plan" period, the amount of new drugs under development jumped to the second place in the world

In the first half of 2022, at least 51 Chinese innovative pharmaceutical companies are intensively promoting their "going overseas" business. On May 18, Hengrui Medicine, a top-ranking domestic company in new drug R&D investment, announced the establishment of a wholly-owned subsidiary to enter overseas markets in a big way. In the past, most of my country's "going overseas" drugs were mainly based on the export of raw materials, but now domestic bio-innovative pharmaceutical companies are gearing up to "go overseas".

This is due to the vigorous development of China's bio-innovative drug industry in the past decade. It is reported that during the "13th Five-Year Plan" period, the number of new drugs under research has jumped to the second place in the world, becoming one of the few developing countries in the world that can independently develop innovative biological drugs. At present, China has become the country with the largest number of biosimilar drugs under development, and more than 200 clinical applications for biosimilars have been approved.

The vigorous development has also brought about fierce competition in the domestic innovative drug industry. At the end of last year, the average price of 67 exclusive new drugs was reduced by 61.71%. Industry experts predict that more than 30 biosimilar drugs will be approved for marketing in China in the next three years. Therefore, many bio-innovative pharmaceutical companies choose to enter overseas markets.

Wan Jiang, senior vice president of Betta Pharmaceuticals, said that there are three ways for my country's biological innovative drugs to "go overseas". The first is to go overseas independently, and local pharmaceutical companies conduct clinical trials overseas, apply for listing and later commercialize sales on their own. The second is to go overseas by "boat", which mainly includes license out, patent authorization, and local pharmaceutical companies sell overseas or global rights and interests of their products to overseas companies, and overseas companies are responsible for follow-up work. The third is to join hands to go overseas, that is, joint development between Chinese pharmaceutical companies and overseas pharmaceutical companies to share costs and benefits.

According to a related report from Ekai Capital, the total transaction value of the license out of domestic pharmaceutical companies in 2021 will reach 13.3 billion US dollars. According to incomplete statistics, since 2017, 6-8 innovative drug products in my country have submitted drug marketing applications to the FDA every year.

Innovative pharmaceutical companies apply for the US FDA admission ticket layout "going overseas"

Many domestic innovative pharmaceutical companies will apply for the US FDA as the first step to enter the global market.

It is reported that in the global pharmaceutical product consumption market, the United States, China, the 5 EU countries, Japan and other regions account for 38.7%, 18.3%, 12.6%, 7.5% and 22.9% of the market respectively.

"Drugs are developed based on global clinical needs, and they will inevitably explore the international market." Yang Dajun, chairman of Ascentage Pharma, told reporters that China's original innovative drugs take the road of internationalization. On the other hand, if it is successful, it can obtain a broader commercial return space.

The reporter learned that after the launch of Merck's anticancer drug K, a multinational pharmaceutical company, in 2014, its sales have continued to grow every year, with global sales reaching US$17.2 billion in 2021.

Approved listing in the United States enjoys a higher pricing advantage, which is more conducive to global promotion. According to Yang Dajun, in general, the price of an innovative drug in the country where it is first listed determines the price of its promotion in the global market. The United States has formed a relatively sound innovative drug pricing system, and the pricing is relatively scientific.

Legend Bio Sidaki Orenza is the second bio-innovative drug approved by the US FDA in my country in recent years. Cedarquiorenza is indicated for the treatment of adult patients with relapsed multiple myeloma. Multiple myeloma is considered an "incurable malignancy" and its incidence has surpassed that of acute leukemia. Huang Ying, CEO of Legend Bio, said that the efficacy of Cidaki Orenza is better than that of similar products already on the market in the United States, and the price is higher than that of similar drugs in the United States.

Legend Bio Sidaki Orenza was approved by the US FDA in February this year, and was approved by the European Union in May. This is Legend Bio's cell therapy production base in Belgium. It is expected to be operational in 2023 and will serve patients in Europe, the Middle East and Africa.

Emerging market countries are expected to be the breakthrough

However, most Chinese innovative pharmaceutical companies have failed to get what they wanted. From the rejection of Wanchun Pharmaceutical at the end of last year to the rejection of Innovent Bio, Junshi Bio, and Chi-Med Pharmaceutical this year... According to incomplete statistics, since 2017 So far, only two innovative biological drugs have been approved for marketing in the United States.

Is there a shortcut to "going to sea"? Huang Ying believes that there is no way to overtake on a curve, and the key to the FDA's approval of Sidaji Orenza lies in the "competitiveness" of the drug, that is, the clinical value of the drug, which can solve the urgent clinical needs of patients around the world. Li Jin, a well-known expert in my country and director of the Department of Oncology at Shanghai Oriental Hospital, pointed out that the drug can truly meet some unmet treatment needs, or lead in efficacy or safety, "there is no reason for the FDA not to approve it."

In addition to clinical value, talent and funding are also important. On May 24, the FDA approved the listing of Tapinarof, a drug for the treatment of psoriasis, which was the first to be approved for marketing in my country in May 2019. The team of the inventor, Dr. Chen Genghui, previously transferred the overseas development rights. Chen Genghui believes that internationalization requires a talented team including partners who understand global pharmaceutical commercialization. According to relevant sources of Hengrui Medicine, Hengrui spent 1.236 billion yuan on overseas research and development last year, and also built its own overseas team.

"We should not only focus on the US, Europe and Japan markets. Emerging market countries such as the "Belt and Road" countries have vast pharmaceutical market potential and unmet clinical needs, and Chinese innovative drugs can gain a place in these countries." Yang Dajun said. Africa is the continent with the highest concentration of developing countries. Its industrialization has just started, and its demographic dividend is huge. Sidibe, the special envoy of the African Medicines Authority, said that the African pharmaceutical industry will grow from US$19 billion in 2012 to US$66 billion in 2022, making it the fastest growing market in the world.

In recent years, the state has successively introduced policies to encourage and support innovative pharmaceutical companies to “go overseas” to emerging market countries, to promote domestic pharmaceutical companies to enter the international market at a higher level, strengthen investment and cooperation with countries jointly building the “Belt and Road”, and actively explore emerging pharmaceutical markets.

Wan Jiang believes that China's innovative drugs are of good quality, suitable prices, and good services from pharmaceutical companies, which are more suitable for the needs of patients in developing countries. According to reports, the price of the anticancer drug PD-1 independently developed by many domestic pharmaceutical companies is only one-tenth of that of the original drug developed by foreign companies, which is fully affordable by developing countries. Industry insiders suggest to accelerate the "going out" of my country's pharmaceutical innovative products and further release domestic pharmaceutical production capacity.