2021 Cross-Border Healthcare Innovation & Partnership Summit: Summary and Outlook
On Sept 23rd and 24th, the 2021 Cross-Border Healthcare Innovation & Partnership Summit was successfully held virtually by MSQ Ventures and The BayHelix Group. This summit consisted of 2 panel discussions, 2 expert speeches, and 7 company presentations. The two panel discussions were “China for Global: Out-licensing opportunities, challenges, and perspectives”, and “Cross-border Collaboration Opportunities: Unmet medical needs and emerging technologies in China”. The two expert speeches were about “Drug Licensing and Patent Linkage”, and “Latest progress of IND and NDA review procedures in China”.
MSQ Ventures received highly positive feedback from the audience and will continue to boost cross-border collaboration and communication in the biopharmaceutical industry.
Panel Discussion: “China for Global: Out-licensing opportunities, challenges, and perspectives”
In Sept 2020, AbbVie inks $2.9B cancer deal with China’s I-Mab Biopharma;
In Feb 2021, Coherus BioSciences Bioscinece shells out $150M upfront to China’s Shanghai Junshi Biosciences Co Ltd for anti-PD-1’s U.S. and Canadian rights;
In July 2021, Biogen taps Chinese Biotech InnoCare Pharma 诺诚健华(HKEX：09969) in $125M upfront for midstage MS drug pact
In August 2021, Seagen Strikes $2.6B ADC deal with China‘s RemeGen Biosciences;
On Sept 23, 2021, we are excited to have these deal makers as the speakers at this special panel to share their experiences, insights, and forecast of global biopharma’s collaboration. These distinguished speakers are:
• Joan (Huaqiong) Shen, I-Mab Biopharma, CEO
• Sridhar Gopal, AbbVie, Head of International Business Development
• Natasha Hernday, Seagen, Executive Vice President of Corporate Development and Alliance Management
• Michael Fleming, Coherus BioSciences, Chief Strategy Officer
• Sean Zhang, MD, FCP, InnoCare Pharma 诺诚健华(HKEX：09969), CMO
The panel discussion is hosted by our CEO, Mrs. Echo Hindle-Yang.
Here’s a brief summary of the content covered during the panel discussion:
What is the past, now, and future of China innovation?
Chinese biopharma is transitioning from being fast followers to true innovators, driven by regulatory reform, government support, and an influx of returnees. The healthcare community in China is rapidly coping with global development. For example, many PIs in the hospitals have been trained in western countries, with an open mind, and are willing to accept new concepts and new science. More importantly, supported by a positive funding environment, many talents choose to set up their own companies, aiming to tackle the unmet medical needs. All these are the cornerstones for China's innovations.
Strategies for out-licensing?
The differentiating advantage is the key. In the case of Innocare, their BTK inhibitor orelabrutinib was licensed out to Biogen. It is a marketed compound with a superior safety profile compared with other approved compounds, and also a CNS penetrated BTK inhibitor.
To develop a quality drug, talents are essential. The new biotech companies in China are set with international standards. Taking I-Mab as an example. I-Mab was founded by returnees. All of the executives are from Europe, the US, and other parts of the world. Many employees of I-Mab have overseas experience, sharing the same mindset about how to develop a high-quality compound.
In the meantime, If Chinese innovators want to build value in the portfolio for out-licensing, they should be mindful of the US market situation or the European market situation, the standard of care, and how it might differ from the standard of care in China. There could be differences in the standard of care, study design, timeline, and circumstances where PFS might be an acceptable primary endpoint for the Chinese regulators but not for the US.
Lastly, IP protection and data privacy are critical for implementing partnership. Chinese companies should learn how to approach these in the best way and communicate early to make sure find the best solution for both parties.
Real-world Case Studies: What's the strategy of license from China? What do you see as the advantages of these assets developed in China compared to others?
Abbvie
As we see that 52% of the deals are in oncology, Abbvie is also doing a fair number of deals in oncology. CD47 was one area we were looking at very keenly. We are happy that we were able to come to an agreement.
I-Mab's team has done a wonderful job in progressing the assets. We believe this asset has the potential to be the best in class. I-Mab had been in touch with Abbvie for the last few years. We were also following I-Mab for some time. Then we started discussing. Though it was a tough time with COVID, we managed to do the due diligence and close the deal. We are happy about that collaboration.
I would encourage all the entrepreneurs on this call to continue meeting a big pharma on various occasions.
Seagen
We had the chance to meet people from RemeGen and learn about the data couple of years ago before the deal. It is quite a typical process in these deals. You get an idea and ruminate on it for a while. You watch data evolving. When time becomes right for both parties, you execute a deal. We did this whole deal remotely during the global pandemic.
We were excited about the capability RemeGen brings to the table. The data, the quality coming out of China, and the innovative medicine opportunities align with our interests when we look for opportunities to license. In this case, I felt like all of the interests aligned quite nicely.
Coherus BioSciences
We made a decision two years ago to make the pivot into oncology, that is to have a PD-1. In the near term, we felt that the market was huge with so many billion dollars of opportunity that we could effectively compete. In the long term, we must have a PD-1 as a backbone for combinatorial approaches, and for competing, a better one than others.
We reviewed several different PD-1s. We were pleased with the quality of the molecule that we got from Junshi. They brought a very broad pipeline of monotherapy opportunities.
In terms of the near term and long term, Junshi made a lot of sense. It's an excellent molecule. That's what we were looking for.
Panel Discussion: “Cross-border Collaboration OPPORTUNITIES:Unmet medical needs and emerging technologies in China”
As we see the surge of China cross-border collaborations in recent years, one key question to ask is what are China’s true unmet medical needs? Apparently, oncology has gained tremendous traction, and expects to keep its dominant role, but are there any other opportunities being overlooked?
We are excited to have a group of opinion leaders, each of whom has unique experience and expertise in regulatory affairs, VC/PE, and/or entrepreneurship, will share their insights from a range of perspectives.
These distinguished panelists are:
• Dr. Jun Bao, IMPACT Therapeutics 英派药业, President and CEO
• Dr. Tom Du, Evergreen Therapeutics, Inc., Co-founder and Chairman
• Dr. Jack Wu, Antengene, Head of Global BD Search & Evaluation
• Dr. S. Frank Yan, 3E Bioventures Capital, Partner
• Dr. Chunlin Adam Zhao, AnLong Bio, Founder and CEO
The panel discussion is moderated by our Managing Director, Dr. Jingzhen (Ginger) Ding.
Here’s a brief summary of the content covered during the panel discussion:
What is your opinion on the newly released new policy in oncology drug clinical trial guidance draft? How will the new policy impact on domestic and cross-border collaboration?
The new policy is overwhelmingly welcomed by the panelists, as it can save capital and clinical resources, encourage Chinese companies to develop truly innovative products, as well as promote the Chinese biotech/pharma industry to upgrade to the international standard quickly.
Bao Jun, Impact Therapeutics:
It's good for companies that are doing true innovation because that would actually set up a high entry barrier. It also promotes the company to carefully design the clinical development plan when in-licensing products from oversea companies. Maybe CDE’s opinion may impact cross-border licensing even before deal closed.
Frank Ye, 3E Bioventures Capital:
This new policy will be good for the Chinese biotech/pharma industry in the long run. It raises the bar, so Chinese biotech/pharma cannot only fast follow on the validated targets. This new policy will save resources, including both capital resources and patient/clinical resources, towards truly innovative drugs. In addition, the new policy will also encourage Chinese companies to in-license the truly innovative drugs and best in class candidate to the level of international standard.
Adam Zhao, Anlongmed:
Before Anlongmed, I’ve also built companies in the diagnostic field. From companion diagnostic prospective, the new policy will also promote deeper collaboration between diagnostic companies and pharma companies.
How will the new policy impact on corporate strategy, especially in the crowded space?
Jack Wu, Antengene:
The impact will be on multiple dimensions. First, it promotes the company to align new assets searching with their focused corporate strategy. For example, even within the oncology field, we still have differentiations on different cancers, solid tumors, hematological tumors, etc. Second, it promotes the company to think about the strategy of taking more assets. At Antengene, we take combinational and complementary strategies on assets. Combinational strategy means taking assets that can combine with our own pipeline; a complementary strategy means taking assets that are complementary to our existing pipeline, especially in the same or core indications. Half of Antengene’s leadership is from Celgene, with extensive experience in the multiple myeloma and DLBCL field, so it helped a lot.
Bao Jun, Impact Therapeutics:
PARP is the first validated target on synthetic lethality. Impact Therapeutics is one of the first five companies working on PARP inhibitors in China. The new policy helped us as it raised the bar for future PARP inhibitors entering the field. There are also two additional insights. One is for Chinese companies, if you are fast following a validated target, please be in the top 5, otherwise, you need to plan a head-to-head comparison with one of the most advanced 5 candidates on the same target. The other insight is for global MNCs or biotech/pharma seeking collaboration, you will have a lot of candidates to choose from for partnering. You may compare and pick the best candidate, like the deals in PD-1 cases.
Frank Ye, 3E Bioventures Capital:
Companies should look for new white space created by the novel therapy recently on market, for example, brain metastasis. Taking Tucatinib against Her-2 as an example, Her-2 space is very crowded, but Tucatinib can still be approved in 2020 by FDA, due to its activity in the brain metastasis patient population. This is a great example for an old target getting rejuvenated by finding new white space. Not only in Her-2+ breast cancer, similar unmet clinical need or opportunities should exist in other brain mets. We should pay more attention to these areas.
What types of assets would Chinese companies like to in-license even if the assets are still in the early stages?
Jack Wu, Antengene:
It is a very interesting question. We always asked ourselves how early we want to evaluate the assets. The short answer is case by case. For example, for a novel MOA, even if the asset is still in the early stage, like a novel target in an interesting pathway, we can go earlier in development stage. The reason for this move is that the drugs are approved earlier. Taking the 17 oncology new drugs approved by FDA last year as example, about half of them are approved only with Phase II trial, many of which the approval is even based on Phase I/II trial. The faster development speed drives everyone looking into earlier stage asset, where the true innovation is. The caveat comes from the potentially best-in-class asset. It is more challenging to evaluate the potential of a drug purely based on preclinical data.
Frank Ye, 3E Bioventures Capital:
It is a balance, late-stage vs pre-clinical. For us, we are more interested in investing in early-stage first-in-class assets, especially for smaller biotech. For the smaller biotech, it would be more difficult for them to compete for the best-in-class asset. Usually, for an asset, the best-in-class potential usually comes from late-stage clinical development. Developing a drug into a later stage is not an easy task and it is the specialty for big pharma. I’d rather go after smaller biotech for early-stage asset, bear the risk and show clinical benefits, and then find a strong big pharma partner for further development. So, if you ask my opinion on pre-clinical vs late-stage asset, I’d go for in-licensing early assets from global pharma and develop them into later stage.
Adam Zhao, Anlongmed:
One of the reasons why people start to evaluate pre-clinical asset is because the competition they faced, especially in the oncology/immunology area. But for gene therapy/rare disease area, the competition is not so high yet. From my point of view, the most valuable part of an asset is the clinical trial data from the US. We are still looking for products that are having clinical data in the US. And at this moment, as we do not face a lot of a competition. Maybe in the future, we need to go for earlier asset, but for the time being, we are still focusing on the products with US/EU clinical data.
When do you think China will be ready for gene therapy and rare disease therapy? How to tackle the reimbursement problem?
Adam Zhao, Anlongmed:
It is an interesting question; I think now it is the right time because we talked to several companies and several personnel experts in this field. They have been working in this field for the last 10 years. In 2018, the government started picking up the policy for rare diseases, es, especially the reimbursement issue. For example, Sanofi acquired Genzyme with 4 rare disease drugs. They sold these rare disease drugs in China for a long time, but the sales of the drugs never picked up until 2018. The reason behind the sales increase is some of the provincial governments, like in Jiangsu, Shandong, and Zhejiang, started to include these rare disease drugs in the provincial drug reimbursement list. The sales of these rare disease drugs in the 3-province accounted for 50% of the overall sales in China. Also from 2018, the sale growths are also significant: in 2019, it achieved a 50% growth rate; in 2020, the growth rate is about 100%, and we predict the YOY growth rate in 2021 will be over 100%. Considering some of the products already achieved sales at 20M USD/year, plus the >100% growth rate, the market is there. In addition, for rare diseases, pharma companies do not need to spend too much effort in marketing and sales, managing relationships with physicians, etc. A smaller sales team is required compared to traditional drugs, as they are only required to maintain government relations as well as selected PIs in the field. And that's one of the reasons we are looking into this field.
One caveat in the gene therapy field is that a limited amount of rare disease therapies is approved in the US market. The approved ones are either enzyme replacement or small molecule inhibitors, for AAV products, thus it is still a long way to go. However, I do think the patient reservoirs in China can change or accelerate the market approval process globally. The Chinese government is very supportive to perform clinical trials in the Chinese market, and we have very good PI pools for rare diseases. The most famous PIs are returnees from the western world, not only practicing clinical duties but also conducting clinical research. The PIs are eager to participate in global trials. To conclude, I think now is the right time to get into the rare disease field, as the patient pool, the PI & government support all encourage interest from Biotech companies. For our own company Anlongmed Bio, we started the company last year, but we already successfully closed two rounds of fund-raising and rolled over $70M dollars. We even set up a 50,000 m2 AAV facility in Beijing, all are prepared for potential collaboration in the future.
How about the reimbursement issue for rare diseases? Efficacy reimbursement?
Adam Zhao, Anlongmed:
Efficacy reimbursement is more for paying for a cell therapy product in the US - you pay while it is effective. But I think the rare disease area will adopt a similar structure, in US and in China. Based on our communication with Chinese provincial governments, especially for Zhejiang, Jiangsu and Shandong provinces, they are willing to pay half a million US dollars for some of the rare diseases yearly. So, million-dollar payments for one shot like gene therapy is not impossible because we can allocate the payment into several years, like 5 or even 10 years. The total price for treating the rare disease is not astronomical for the government agency.
What other therapeutic areas or indications that Chinese companies are looking for in the upcoming years?
Frank Ye, 3E Bioventure Capital:
Oncology will still be important area for the years to come, but other than oncology, we think neurology, including neurodegenerative diseases and neuroinflammation diseases are good to pursue. Aging is big issue in China, so neurodegenerative disease is inevitable, representing a huge market.
Jack Wu, Antengene:
CNS, autoimmune diseases, rare diseases, etc. China has a huge population base. So even for rarely occurred diseases, the market is still big in China.
Bao Jun, Impact Therapeutics:
I was trained as a neurologist working on Huntington diseases. So, nothing excites me more than if there is a treatment for neurodegenerative diseases. I think the science will be there and the technology will be there. However, it maybe still hard especially for the chronical diseases. I think some acute diseases might be tickled first, for example polyglutamine repeats diseases.
Adam Zhao, Anlongmed:
Gene therapy is our exclusive focused area, rare disease is a plus. I spent a lot of time convincing people that Anlongmed is their right collaborator choice: we have gene therapy manufacturing capacities, commercial channels, diagnostic collaborations, distribution capabilities, as well as reimbursement experts, etc. We also recently opened a US office in New York, so please contact us if you’d like to find a Chinese partner for gene therapy.
Expert Speech: “How to monitor pharmaceutical patent listing and generic challenge under China’s patent linkage system”
The excellent speech is given by IP expert Tony Chen, Partner of Jones Day's Shanghai office and Chairman of The BayHelix Group.
Tony Chen is a partner at Jones Day's Shanghai Office. He has led the Firm's China IP team and local counsel in representing multinational pharmaceutical companies in patent invalidation and infringement disputes before the CNIPA and IP courts. Tony is a leader in promoting strong IP protection regimes in China for pharmaceutical innovation, including patent linkage, patent term restoration, and regulatory data protection. He is an advisory member of the U.S. – China IP Cooperation Dialogue organized by the U.S. Chamber of Commerce and Renmin University of China. Tony was trained as a molecular biologist before he studied law.
China has recently passed the amendment to its patent law and formally established a drug patent linkage system. The amended patent law became effective on June 1, 2021. Tony Chen is our expert speaker at this MSQ Webinar Series. His expert speech” How to monitor pharmaceutical patent listing and generic challenge under China’s patent linkage system”.
Here are the key takeaways from the conversation:
1. Why did pharmaceutical patents became matter in China?
China did not have the patent cliff before 2017, but now China has two patent cliffs. With the emergence of a steep patent cliff, the pharmaceutical patent has become critical for successful deal-making in China.
NRDL Cliff (National Reimbursement Drug List Cliff): Since 2017, pharmaceutical companies launching in China aim to have their drugs added to the National Reimbursement Drug List and to be covered by the national basic medical insurance (BMI) for hospital use. In return, the price of the drugs would be lowered significantly.
VBP Cliff (Volume-Based Procurement Cliff): including drug procurement reform for generic drugs, and 3 rounds of China Volume-Based Procurement (VBP), using volume in exchange for reduced bid price by at least 50%.
2. How is the Patent critical for staying away from VBP?
KYPROLIS is an anti-cancer medication acting as a selective proteasome inhibitor. It was developed by Onyx Pharmaceuticals. KYPROLIS is licensed to BeiGene in China under a strategic collaboration with Amgen. U.S. Food and Drug Administration (FDA) approved it on 20 July 2012. The same drug was launched in China in July 2021. According to the orange book, from the approval date till patent expiration date, the drug is given 14 years of exclusivity in the US. But the drug is given 4.1 years of exclusivity in China. If the generic challenge gets successful, the exclusivity period is even shorter than 4 years.
3. Where can we access the patent information?
China patent information registration platform for Marketed drugs, the website is publicly accessible, run by CDE, includes three major sections, patent registration, patent information publicity, patent certification.
4. What’s the three Key IP questions for drug licensing deals?
DO you have patents for listing in Orange Book?
How many years of protection will they provide?
Can they withstand patent challenges from generics or biosimilar?
5. How to get up to speed with patent linkage in China?
Search Orange Book in English
Search by MA holder
Track patent declaration
Research RLD registration & Patent information
Track CDE status of generics
Understand pharmaceutical IP index: “π Value” How big is the π Value of the drug?
π Value is a dynamic index that changes as the start Point (Market approval date of a new drug) and /or endpoint (Loss of market exclusivity to generic drug competition) change. It projects the future exclusivity potential of a new drug product.
6. How to increase the π Value of my drug?
Obtain multiple patents in a family
Prosecute patents in anticipation of patent linkage litigation
Plan for patent term extension
7. How to use Drug IP Radar?
GBI is a Healthcare Intelligence Provider, found in Shanghai in 2002, has built a diverse portfolio of market intelligence solutions for pharmaceutical and device companies and other service providers.
GBI has SOURCE database that is a pharma intelligence system providing industry professionals with China market news, data, and analytical tools that serve as critical input and context for decision-making.
SOURCE is a must-have resource for any company working in the pharma and biotech industries. Research and evaluate competitor pipelines and portfolios. Screen and carry out due diligence on potential licensing and investment opportunities. Develop market access strategies according to pricing and reimbursement trends. Stay up-to-date with industry and policy developments via SOURCE news, reports, and interviews. Identify market size and forecast potential via hospital tendering data.
Expert Speech: “The latest progress of IND and NDA review procedures in China”
The outstanding speech is given by Regulatory expert Jianqing Chang, Vice President of Drug Regulatory Policy of Tigermed.
Jianqing Chang joined Tigermed in 2013, following working with PDPAC for 5 years as Director Drug Regulatory and Science where she devoted in drug regulatory policy advocacy. She had 15 years’ experience in drug registration and clinical trial with the local subsidiaries of Schering AG, SmithKline Beecham and Schering-Plough
Here are the major takeaways from the conversation:
Starting from 2015, China has undergone massive reformation in the drug regulation and registration process to encourage drug R&D, to upgrade the quality standard and to meet the unmet medical needs in China.
Highlighted Success in the IND stage:
Pre-IND consultation: CDE is here to guide and discuss the questions that the company may have to ensure an efficient approval process
IND Approval: within 60 business days (If no comments from CDE after 60 business days, the clinical trial can proceed as planned) significantly shorten the time needed than before
IND approval valid for 3 years
Highlighted Success in the NDA stage:
4 Accelerate pathways for NDA Approval
Breakthrough Therapy
As of 9/23/2021, 74 drugs have been granted with such designation.
Conditional Approval
Orphan Drugs
Innovative drugs that at targeting life-threatening diseases with clear unmet medical needs
Priority Review
130 business days: drugs with priority review designation
70 business days: rare disease drugs that are urgently needed for clinical use that have been marketed overseas and have not been marketed in China
Special Approval
MRCT data, overseas data are acceptable to support NDA filing
Recent Hot Topic: CDE issued Guideline for Clinical Value-Oriented Oncology Drug Clinical Research and Development (Draft for Comments)
For later on head-to-head trial design: better to compare with one of the following criteria 1. Guideline recommended drug; 2. Widely acceptable precision drug available
Cannot simply demonstrate the superior efficacy than chemotherapy to be expected to getting approval in China
Single-arm trial will be valid for those indications that currently do not have a treatment approved.
MAH
In the old days, the authority only looked at safety, efficacy and QC of the drug. Nowadays, the applicant also needs to pass the MAH qualification review handled at provincial level authority combined with NDA review process. Quality insurance, risk control and liability compensation will be examined there.
The issue related to cross boarder licensed drug. Contract manufacturing cross border is not feasible. If MAH in China, then the contract manufacturing site for finished product must be in China. If MAH is outside of China, then the contract manufacturing site for the finished product should also be overseas.
Q&A
Given the differences between China and Global Approval, what are the key components to consider in designing a global trial for Global approval including China.
Consider the guidance from authorities (FDA, EMA, CDE) first and incorporate ICH/CTD guidance for trial design. Not really a big problem here.
For MAH you mentioned, could the MAH holder presumably be the licensee and manufactured the finished dosage form and import API from the overseas organization?
Yes, API imported or manufactured locally both acceptable. This is not the issue. What they look at is the manufacturing site of the finished product. If MAH in China, then the manufacturing site for finished product must be in China. If MAH is outside of China, then the manufacturing site for the finished product should also be overseas.
Is that possible for MAH holder to repackage the drug in China, imported finished and finished the packaging here in China. Does that count as MAH in China? What if the product is a biological product (e.g. Antibody), is it okay for MAH holder to import the raw material from the original owner and finish packaging here in China? Does that count for manufacturing from the MAH?
I am not sure at the moment, will need to follow up on those.
What is the key regulatory difference between getting a biological drug approved in China vs. a chemical drug approved in China?
Very small difference.
Conditional approval/ single-trial arm trial. How to define the accessible? Through MOA?
If there is NO treatment available, one could consider single arm trial for the innovative drug. As long as there is a treatment available for such indication, there is no point to conduct single arm trial and obtain approval.
Accessible = commonly used in the clinical. This means either be included in the clinical treatment guidance or commonly recognized by the physicians in practice. It does not have to be the most recent approved drug for such indication.
Which aspect would be the key if the new guideline (Guideline for Clinical Value-Oriented Oncology Drug Clinical Research and Development) is in place in the future?
There should be not a huge difference after the guideline is in place. This is because right now the applicants are followed the idea of this guidance already. This is a common practice for CDE for several years already. Just this time they put down as guidance but in fact in practice for a while already.
Company Presentation
There were in total 7 companies presenting their assets during the summit. The companies were: Shattuck Labs, Triumvira, C4 Therapeutics, Senda Biosciences, ViCardia Therapeutics, Adocia, and Selecxine.
MSQ Ventures was thankful to all the participants and attendants for joining this summit with us. During this summit, we witnessed how different thoughts come together. We hope to see you again at our next event in December!
Any inquiries, please contact us at event@msqventures.com