BioAroundWorld Event April 19 & April 20
Summary & Review
On April 19th & 20th, 2022, BioAroundWorld as the first global platform for cross-border knowledge sharing in biopharma sector successfully launched its first online event. This event brought 2 round table discussions, 3 case studies and 1 expert sharing and invited many biopharm company executives, investors and experts to share their valuable insights and successful industry experience.
On April 19th the first day of event, the 7 founding members of BioArouldWorld Echo Hindle-Yang, Founder & CEO of MSQ Ventures, Joan Shen, Chief Executive Officer and Founder of NeuShen Therapeutics, Ed Zhang, Co-founder and CEO of Overland Pharmaceutical, Alvin Luk, CEO of Neurophth Therapeutics, Peter Greaney, Head Of Corporate Development of ADC Therapeutics, Tony Chen, Partner of Jones Day and Ginger Ding of Managing Director, MSQ Ventures gave an introduction of the BioAroundWorld and shared the vision and mission of BiaAroundWOrld; Then Joan Shen, Shawn Xiang, CEO of RareStone Group, Dewan Zeng, Head of Search and Evaluation Business Development at BeiGene, and Benjamin Yerxa, CEO of Opus Genetic had a round table discussion on the key considerations and strategies accelerating rare disease drug development; Last, the Global Capital Market Forecast Panel Discussion included Wendy Pan (moderator), Partner at Goodwin Procter, Philippe Gallone, Managing Director at Moelis & Company, Shoaib Ghias, Partner at Goodwin Procter, Echo Hindle-Yang, CEO at MSQ Ventures, and Bosco Yiu, Partner at Goodwin Procter.
Here is full video for first day event
Rouldtrable Discussion Topic 1#: “Key considerations and strategies accelerating rare disease drug development?”
Host: Joan Shen, Chief Executive Officer and Founder, NeuShen Therapeutics
Speakers:
Shawn Xiang, CEO, RareStone Group
Dewan Zeng, Vice President, Head of Search and Evaluation, Business Development, BeiGene
Benjamin Yerxa, CEO, Opus Genetic,
Joan Shen: I'm Joan Shen, the founder, and CEO of NeuShen Therapeutics. In our research, we will use AAV gene therapy platforms to develop drugs that address unmet needs. This fits into the rare disease space very well.
For rare diseases, there are substantial unmet needs in drug development. Patients’ needs guide us through the future directions. Fortunately, we see the public support and government supports globally. We've seen quite a few advancements in policymaking. In 2019, FDA updated the guidance for rare diseases.
On the other side of the world, we all noticed that China issued the guidance for rare diseases clinical development in December last year. The new guidance adopts the world standard very well, including the FDA standard. It encourages using bio-markers, modelings, and real-world data to measure clinical benefits or safety.
China issued a rare disease list in 2018. 121 rare diseases were listed. Recently, China has initiated another drafting of the rare diseases list. All these actions give very positive signals that we started to address the unmet needs of this population.
We should keep in mind that most rare diseases don't have a solution or adequate treatment. That's why we are here. No patient should be left out. I'm inspired to work with scientists worldwide to find solutions for patients who haven’t had adequate treatment yet.
Benjamin Yarx: I'm Benjamin Yarx, CEO of the foundation fighting blindness, which is a big global research foundation for inherited retinal diseases, and also the acting CEO of Opus Genetics, one of the spin-out companies that the foundation has funded.
We're working with various genes that caused blindness. There are about 300 different genes known to cause retinal blindness in kids and adults. For us, it's a blessing and a curse. It's a blessing that we know what to go after. It's a curse because we have 300 different genes to fix.
It's a very daunting task to go after these diseases. From our perspective, as a startup company here in the US, we are dedicated to going after programs for gene therapy where the science is really strong, regardless of the size of the population. Many companies focus on the larger buckets of the rare disease populations because they're chasing the commercial numbers. We're focused on following the science. First, the science is ready for gene therapy. Even if it's a small population, we're willing to take it on and bring forward for the patients.
Dewan Zeng: I’m head of search evaluation and business development at BeiGene. I've been at BeiGene for 5 years. I’ve been in the industry for about 24 years. Majority of my career, I was in clinical development. I started my clinical pharmacology career and led programs on phase one to phase three. About 3 years ago, I transitioned to business development. I look for more collaboration and innovation for BeiGene.
Most of my rare diseases experience was when I was at Gilead andled a program for rare diseases. It is a drug for long QT syndrome. I led a clinical study, a global study in the US and Europe. I'm happy to share more details about how we worked with patient advocacy and thought leaders.
Shawn Xiang: I’m the CEO of Rarestone Group. I'm leading a group of people to introduce innovative medicines for rare diseases into China and also commercialize these medicines to benefit more rare disease patients. About myself, I started my career many years ago as a consultant at McKinsey. Then I joined the pharma industry, focusing on commercializing innovative medicines in China and emerging markets. Then I started Rarestone Group a few years ago, which exclusively commits to rare diseases. We introduce innovative drugs to China and also build an ecosystem for the rare disease community.
Dewan Zeng: I can share my experience when I was at Gilead many years ago. We were interested in some arithmetic disorders. The late sodium channel inhibitor for LQT3 patients provided a perfect proof of concept. It can normalize the QT interval in these patients.
The question was, how different is rare diseases versus common diseases. In this case, we have the perfect bio-marker, QT normalization, but we probably won't have enough patients to do a survival or control arm. It would be a single-arm study to measure QT normalization to provide adequate safety and benefit. Luckily, this particular channel also plays a role in other cardiovascular diseases. One end we looked at was an ultra-rare disease. On the other end, it's Sudden Arrhythmia Death Syndromes. We could definitely run a cardiovascular outcome study to measure the effect of the drug on reducing sudden death. It’s an interesting mixture of rare and common diseases.
From a clinical trial perspective, fortunately, there's a registry of LQT3 in the US and many countries in Europe. So we know precisely where patients are. Many patients are children. We knew how to reach out to the patient advocacy and reach out to their parents. Even though there are challenges in enrollment, it's probably more inspiring to know how involved the patients are. If they feel better, they are able to do more exercise and more daily activity. They would immediately provide feedback to the drug developers. For rare diseases, I would say, it is probably more emotional with more patient involvement.
Joan Shen: That’s very touching. Every individual with a rare disease has a larger impact on society, their families, and their advocate groups. That inspires us to do the work. But I also want to address the concerns about the potential of commercialization. We need to increase the awareness of rare diseases. Some patients are left out. I've seen a lot of policy changes that benefit this small group of patients. We need to do more to help the sponsors to invest in these areas. So the patients can benefit. That's where we need to do more work.
Shawn Xiang: I want to echo with Dr.Zeng about the patient involvement in the clinical development of rare disease drugs. It can be challenging from time to time. That’s why at Rarestone we have developed the strategy of building an ecosystem to engage patients early on, even before we start planning out the clinical development.
When it comes to enrollment or trial design, we already have some patients in our friends circle and can reach out to them. When we start the patient enrollment, we already have many patients waiting in the queue, raising their hands and saying that they want to be part of the trial. When it comes to commercialization, we already have many prospective patients waiting for the prescription from their doctors.
In our ecosystem, we have three approaches to help address patients’ unmet needs. Number one, we provide free access to knowledge. Patients can search and understand the diseases. We have a rare disease encyclopedia published online for the Chinese patient community. It covers 140 rare diseases now. Number two, we set up internet hospitals dedicated to rare diseases so that patients don't have to travel thousands of miles to Beijing or Shanghai to get a diagnosis or treatment. More patients can have access to top physicians. Number three, we provide medical devices and other disease management solutions beyond drugs. As we all know that rare diseases patients need to manage their diseases beyond just taking pills. They need medical devices, special nutritional products, digital therapies, etc. These approaches create much patient appearance in our ecosystem, making it a one-stop shop where you can access knowledge, physicians, and other solutions to manage diseases.
We're still a young company, but we've made some progress. The feedback from the patient community is very positive and encouraging.
Joan Shen: Very impressive! When making these registries for different hospitals and cities, do you have to get the line alignment or permissions from individual hospitals or the government? How would you coordinate all these efforts together?
Shawn Xiang: We're taking a two-front approach. One front is to coordinate with hospitals and care providers. On this front, we're partnering up with the Chinese Alliance of Rare Disease. Then we have an effective top-down approach to engage different hospitals. More importantly, we directly engage patients and patient organizations. Through sponsorship and other support, we can build a connection with them. That's actually even more effective than reaching out to patients through doctors.
Joan Shen: That's very impressive! That’s the situation in China. Dr. Yerxa can share your practice or thoughts when you are conducting similar trials in the US.
Benjamin Yarxa: A big difference between normal pharmaceutical development and rare diseases drug development is the size of the trial. For example, we're talking about tens of patients, not hundreds of patients. For example, a typical phase 1/2 trial in our space is maybe nine patients. It's a smaller number of patients, but they're harder to find. So it still takes a lot of time for enrollment because we have to find people with the exact gene mutation and other entry criteria.
I want to echo the same thoughts of the other panelists. It's a little bit difficult to find these patients from around the world. Fortunately, there are registries. But when it's time for a trial and the visits increase in frequency, there's a lot of burden on the patients to travel. So I agree that in the future and even during the pandemic, we've learned that we can actually do parts of trials in a virtual manner. We need to optimize that for the future to find ways to do some things in the home or send people to the patients. It might be more efficient than flying them to a regional center for expensive visits.
In our space, once we identify the gene that needs to fix, we can engineer a potential gene therapy, which is really exciting. But the patients and the families go through a big decision because if you enroll in a trial, you get injected with gene therapy. That's your one chance to get the treatment because it's generally an exclusion criterion for future trials. It is a big decision to enroll in a gene therapy trial for the patients, maybe the only chance to do it.
Joan Shen: It's still challenging to design the trials. Have we thought about collaboration through different territories? So we can find more patients and bring this compound earlier to the market. Nowadays, we know most clinical trials are conducted separately in the US and China, especially in the gene therapy space. How can we coordinate better in the global clinical trial settings?
Benjamin Yarxa: We need to have partners we can work with within China. Coming from the US, we don't know the systems. We don't know the regulations. We don't know the culture. So we need really strong partners in the country that can help us do that. It's just a kind of a big challenge for us.
One thing I would like to highlight is that anytime you're doing a global trial, you need the same instrumentation so that you get very consistent data. One thing our foundation has been working on is making sure that one has the same instrument. If we can collaborate to make sure that we're getting data from the same source, then it can be very consistent, no matter where you are in the world. I think that would help.
Joan Shen: So far, have you experienced any challenges?
Benjamin Yarxa: Not yet. In our space right now, it's more US and Europe collaborating on trials together, because those relationships are strong, and they have similar instrumentation. But I think that in the future we’ll broaden our reach. I believe that if you want access to patients, you've got to have access to China. There's no doubt. That's true.
Joan Shen: Maybe Dewan can share with us how BeiGene collaborates globally to accelerate patient enrollment.
Dewan Zeng: I can share what we do in oncology. For our internal development, we do some in rare cancers. For example, HCC is not rare in China but maybe less prevalent in other countries. Typically, when BeiGene runs clinical development for our own internal program, we always run a global study. A lot of the first-in-patient study was done in Australia. Because the CTA in Australia is very fast. Once we finished dose escalation, we try to go to as many countries and regions as possible. For oncology trials, setting up those global protocols does take time. But it pays up in the end from an enrollment perspective. In the end, it also supports global registration.
Joan Shen: The efforts upfront can be paid off after you set things up to coordinate different areas. I can share some of my experiences, not in rare diseases. When I was in Pfizer doing an Alzheimer’s disease program, we wanted to come to Asia knowing the patients are here. But the instruments we used at the time were not validated because of the cultural sensitivity. We conducted validation studies in Asia, including Mailand China, Korea, Taiwan, Hong Kong, and Singapore, to map out the language differences and cultural differences. We validated these instruments to make sure the tool represents the true symptoms. Validation of the instrument could help facilitate global trials. This is a good example of how we should put more effort upfront to facilitate global development. I think similar efforts should be applicable to rare diseases as well.
Shawn Xiang: There're two points I would like to share. First, the Asian population, especially the Chinese population allows much faster approval process. If in the future, you consider Japan, China, and other Asian markets, then you should include the Asian population in the trials. That's critical. Second, how do you communicate with and engage the local authorities directly? You should try to convince them that rare disease is something special and help them innovate the regulatory policy system, help them make your own approval process as part of the innovation of the system.
Joan Shen: I agree completely. From the recent regulatory advancement, you can tell the patients’ needs have been heard. It comes to the next topic, how we can make it. We’ve already talked about the R&D part. How can we coordinate the commercial part and also convince the investors to invest in these efforts?
Shawn Xiang: Our team is focused on commercialization. Two components are equally important. You need to build the KOL community who are comfortable and familiar with your job and is able to diagnose and treat the patients in the right way. The other one is the ecosystem to engage the patients directly. How do you identify these patients and keep them on your medicine for a longer duration of treatment? That’s the key.
Benjamin Yarxa: In the space of gene therapy, it's a single treatment. It's a treatment that should last, theoretically a lifetime. So commercially, it looks really different from traditional pharmaceuticals, because it's a single administration. So the challenge here is that you have to pay everything up front in the normal system. We've seen the example of the first gene therapy approved in the US for an inherited condition. They worked out ways to have a money-back guarantee and make it easier for the payers. So they don't freak out when they are faced with $1 million therapy. But $1 million is not a lot of money if it's a single treatment that lasts a lifetime. We have to have these conversations with payers in advance of approval. So they're not shocked. We have to be willing to work with them because it's different for them. The benefit of rare is that there are not a lot of patients. So even though it's an expensive therapy, it's not a lot of patients.
People need to get comfortable with high-value treatments for these patients and just get comfortable with being willing to pay for them. For example, a lifetime of blindness is much more expensive in the long run. So it's actually it's a good value.
Basically, the commercialization curves for rare diseases drugs are very different. They ramp up fairly slowly. And then they peek. And they go down. There's a very long tail because you’ve treated the current population. Then you need to look for incidents of new cases.
For Opus, for example, we're working with several different gene therapies. We need to develop a stack of programs so that as one is peaking, the next one is coming right behind it. So we have a sustainable business of multiple programs.
Joan Shen: In China, the infiltration is slower. However, we already had the guidance for rare diseases development and the list of rare diseases. It is a good sign. For those diseaseslisted, there will be benefits for NRDL inclusion or other government reimbursement coverages. In China, because the population base is large, the number of patients would be relatively larger. If you can calculate the NPV, overall you can still have positive outcomes.
At last, each of us can share a few sentences about how you think the rare disease drugs should be developed and how the collaboration could be encouraged to accelerate the development.
Benjamin Yarxa: I hope to have global trials for rare diseases where one or two well-controlled trials with patients in multiple countries can serve as registration trials in all these different countries. That's the beauty of collaboration. And that's the world I'd like to see in the future.
Dewan Zeng: I think we start to see that. In different countries, the regulatory approval requirements for rare disease drugs are more flexible. I’d like to see more harmonization in different countries accepting data from other countries so that patients in different countries can have access to innovative medicine for rare diseases.
Shawn Xiang: Two key messages I would like to express. One is to utilize digital tools to engage patients. We can empower patients to accelerate global development and commercialization in the future.
The second one is to encourage the regulatory authorities to be more innovative, to be more willing to give rare diseases some special consideration. After all, it's not going to impact the large population.
Joan Shen: We still have 2/3 of the rare diseases not being covered by adequate treatment. No patient should be left out. I hope in the future, we have more collaborations for the rare diseases drug development, finding solutions for everyone.
And also this requires support from the whole society, not only from R&D perspectives but also from investment, commercialization, and regulation.
Rouldtrable Discussion Topic 2# Global capital market forecast
Host: Wendy Pan, Partner, Goodwin
Speakers:
Echo Hindle-Yang, Founder & CEO, MSQ Ventures
Shoaib Ghias, Partner, Goodwin
Philipe Gallon, Managing Director, Moelis & Company
Wendy: How are the capital markets for life sciences companies?
Shoaib: The US market right now is fairly soft. If you compare Q1 of this year to Q1 of last year, last year's Q1 was about $40 billion dollars, and this year's is only $2 billion dollars. Part of the reason the market has been soft is that a lot of the 2021 IPOs are not performing well, about 3 quarters of them are trading below their IPO price. Therefore, the valuations are down, and companies are digesting what the right valuation going to be and when the right window is going to open up for them. Across the board right now the US is quite a soft market.
Philippe: Similar observation in the Europe market, last year was a record year and 2020 was not bad either. A lot of biotech companies in Europe are looking at US Nasdaq listings, fewer and fewer local listings, which in that case has been extremely soft. Conversely, we have seen a relatively robust private market in terms of financing, not as an alternative to IPO, but still quite a bit of money available for a strong story in the private markets. That’s true for both EU and US market. We have seen slightly pick up in M&A as well. As the capital markets become less available, the biotech companies turn themselves into asset dilution instead of equity dilution. And of course, the valuation has been pressed so the benchmark tends to be more affordable for the acquirer compared to the peaks last year in the market which were very high.
Bosco: I think the Hong Kong market generally follows the global trend recently, so it has been a bit soft in the last 3 months in terms of successful listings of biotech companies. However, the infrastructure of biotech companies listing in Hong Kong is still very solid, as we have seen 29 applications in the pipeline waiting for the optimal time to go public. Once the economic cycle returns, Hong Kong Stock Exchange should remain strong and lead a position for Biotech companies to go public. The Hong Kong Stock Exchange has also initiated several SPAC listings recently, which also accommodated a de-SPAC opportunity for biotech companies, and where we have seen such requests via this route lately. Despite the short to mid-term expectations for a soft market, the fundamentals are still here and once the economic cycle goes back to normal a rebound should be promising.
Wendy: Speaking of SPACs, the US market has experienced almost 2 years of a boom or a trend. What’s your view about SPAC/de-SPAC deals?
Shoaib: The SPAC deal has become very trendy in 2020 and 2021. I think that excitement has been somewhat fading away because of a lot of regulatory push back, a lot of accounting issues, a lot of regulatory proposal, the benefit that typically a SPAC had in terms of providing projections, liability considerations are either going away or expect to go away. People are adjusting expectations and overall the entire cap IPO market drag, valuation drag has kind of drag down the expectation about redemption. The redemption of a lot of SPACs are going up, you see are going from 60% to 70 or 80%. On the other hand, there are few SPACs out there are ready to do deals. So, there may be an opportunity as well if someone wants to go public via this route. Consideration involving doing a strong PIPE transaction together with the SPAC to enable to fund the company even if there are redemptions and some creative ways when PIPEs are not available, when redemptions are high.
Philippe: I do not think the trend is going away completely, but it would significantly reduce the number of activities. It could still be a tool for some companies to go public, but one could see the setting apart there of what can go public versus what cannot. The situation is getting hard and there will be a lot of SPACs which disappear without making a deal over the next 12 months.
Echo: We have experienced all the changes that Shoaib just described. We were there on the front lines to deal with and act properly in response to those changes. The SPAC market this year which totally different from the market in 2020 and 2021, aligns with what’s happening in the traditional IPO route - it is hard to raise the money, and hard to find good quality targets to de-SPAC and sometimes the quality of the target does not match with the right size SPAC. However, I agree with Philippe that SPACs are not going to go away. The market has been more regulated under the SEC and it remains a good alternative way to go public for biotech companies. It is also important to build up a good team - legal, auditors, investment bankers as well as the sponsor team itself. The quality of the SPAC itself can be better after the series of changes implemented over time.
Wendy: Bosco, can you also comment on the difference between US SPAC rules and Hong Kong SPAC rules?
Bosco: The Hong Kong regulations are stricter than the US SPAC rules. Listing a shell company has not been something that the Hong Kong Stock Exchange has been very keen on in the past. The Hong Kong Stock Exchange regulatory body is midway between listing a shell company for acquisition purposes and aiming for a company of substance to be injected. The key difference is that a SPAC listing in Hong Kong is restricted to professional investors only. Professional investors must have current equity funds worth $1 billion dollars AUM or institutional or financial companies or even individuals with at least $1 million dollars in assets. There is also a very strict minimum ticket size of HK$1 million per ticket. Using that as the barrier to entry to the market lowers the risk of unsophisticated investors going towards a SPAC option, and, in turn, these restrictions lift once a de-SPAC happens. The other rule is that the sponsor needs to be licensed by the Securities and Futures Commission in Hong Kong. Later on, the de-SPAC target must meet the Hong Kong listing requirement itself despite only a de-SPAC transaction.
Wendy: Philippe, between a de-SPAC IPO and reverse merger for a biotech company with a failed clinical trial, what do you recommend?
Philippe: Both are interesting alternatives for a company in that situation, but a reverse merger into a shell company will be harder to do without strategic rationale. It could potentially narrow the candidate pool.
Wendy: It seems that even in a bear market, some companies can still raise money for a public or a private market. That said, in your view, apart from the general market situation, what are the most important factors that could affect a biotech company’s prospect for fund-raising?
Philippe: The market is ready for a company with an established track record, which has still been generous given generally being soft, for example, the recent Agenx deal. Companies must be aware of what stage they are at and what their financial goals are. Instead of an IPO, there are private funds available, and a lot of Series B + C’s going on for fund-raising. Other alternatives can be royalty financing, licensing, or regional deals.
Wendy: It is quite important for companies to clear their financial goals, and then further explore options. For example, in a cross-border partnership - the fund & pharma collaboration ie the JV structure of ADC and Hillhouse - is quite an interesting way to get endorsement in the market and achieve financial rewards at the same time.
Echo: This year we have observed more creative collaborations especially in the cross-border area compared to the past years where companies follow standard licensing deals. This year, we are seeing more China based innovative assets being licensed out and further collaborations with MNCs as well.
Wendy: Yes, the Harbour Biomed-AZ deal is a great example and moving forward we expect to see more and more transactions like that. Shoaib, back to the IPO discussion - for companies that want to be listed on Nasdaq, what do they need to do?
Shoaib: These days, if you want to be listed, you want to have a differentiated story, differentiated data, strong management, and crossover type of investors. It is also important to have a strong M&A candidate profile, as the investors are looking for that inflection point characteristic. We see companies interacting with the SEC on confidential basis to get ready for when the window opens to get out to the n market.
Philippe: Additionally, you have to have a strong IR outfit, because you cannot simply get out the market and educate people at the same time. This is an important exercise, which should happen ahead of the IPO, to get people on the ground and educate potential investors ahead of time – this is quite important. I would say IR and company education should start at least 1 year before the actual IPO happens, as investors do not have to discover the story in the crowded market. Investors are very selective, and they only go to the story that they understand better.
Echo: Validating data is also key here. Last year a lot of preclinical companies rushed into the market - cooling down the investors a lot.
Wendy: For non-US companies, for example China companies, they also need to be prepared on the accounting front. Last year, some of our clients experienced some difficulties getting an accounting firm lined up.
Wendy: The last piece of advice to the companies that looking for IPO opportunities.
Echo: Stay humble and develop validated data that cures patients.
Philippe: Prepare, build your relationships and be ready.
Shoaib: Manage your expectations. The valuation may not be desirable.
Bosco: Focus on the story and data validation to support the story. Then, the market will always be a viable option for financing.
Day 2, April 20th, 2022
CASE STUDY #1 Overland & ADCT
Host: Echo Hindle-Yang, Founder & CEO, MSQ Ventures
Speakers:
Ed Zhang, Co-founder and CEO, Overland Pharmaceutical
Peter Greaney, Head Of Corporate Development, ADC Therapeutics
Echo:
Before we started, I would like to reminder the audience two important dates: on December 14th, 2020 deal announced between ADCT and Overland to form a JV in China, and time fast forward to April 2021, they have their first patient dosed in China. Let’s go back from the beginning, how did you come across the idea of doing a JV in China? At the time, there was no successful precedent case.
Pete:
I can start with some key objectives that we have. We were looking to develop our lead program in China and launch in the Greater China area as the leading NHL targeted therapy. We as the company need to access all sector expertise with the whole objective of getting Lonca to patient as quickly as possible in China and building on that through label expansions. We were also looking for a partnership who understand our bigger objectives. With that been said, we were looking for a partner who could really contribute to the global development of Lonca and contribute to the life cycle, for example, how to move into earlier lines of DLBCL and additional indications. The other thought was at ADCT we also have other exciting programs but we do not have bandwidth to deal with all the activities in the Greater China region. Beyond Lonca, should we be applying to other assets? At the same time, it was great to have access to the capital in China.
When we had those objectives in mind and ran extensive process in the typical licensing way. Then, we thought about the idea of JV. We saw this as a formal and true collaboration which align with our objectives which I outlined earlier. The two parties work together to develop and build not just near term but long-term goals for ADCT and ultimately will be the best solution for patient.
Echo:
I still remember the process that we went through, understand the China market. I was a bit surprise when you brought up the JV idea as ADCT just went public with large amount of capital available. Let me turn to Ed. Ed, you are the investor to the ADCT for the IPO and then come up with the licensing and JV ideas. Can you please review the story behind?
Ed:
First of all, I would agree with what you said earlier there is no sliver bullet about which structure is the best structure, pros and cons among all the options like licensing, JV and co-development. At the end of the day, what made up our mind was the question that if our goal is to accelerate the global development and bridging the innovation among US, EU and Asia. A JV would offer a unique foundation between parties. When Pete and I initial discussed about different structures, it become very obvious from ADCT perspective, they want a dedicate partner who can allocate resources, prioritize ADCT programs and accelerate global development. In that regard, we feel strongly a JV could provide that kind of common interest and incentives with equity interest allocated exclusively between ADCT and Overland. Both parties would have strong interest to move this forward.
The negotiation was never easy which requires a lot of thought and discussion and alignment on the structure. Over the period of discussion, we built the trust between parties towards the company and team. In that regard, when we negotiate the contract, we have a potential global trial that Overland can participate but with short window to join. I can imagine that was a big decision on ADCT side to share large amount of confidential information with Overland and start planning for CTA filings in China while we are discussing the details in the contract. Long story short, I believe it is because of the level of trust and very strong collaboration spirit and ultimately enable us to file first CTA within a week after deal close.
Echo:
Ed, a step back, what do you think the key factor or the most important nature that Overland has to convince ADCT to do the deal and build up the brand-new team? How did you put up the solid plan?
Ed:
It was not easy. Three things to highlight from my perspective, first of all, we hope we come as credible and trustworthy partner. It is not by just talking, in that regard, I think we spent a lot of time, really thinking hard about how we can accelerate global development, how we can partner with ADCT to at least plan out a trustworthy development plan. Secondly, we probably came cross as a company that can really put the ADCT program as top priority. We had advantage doing that because in fact we are new, we can definitely prioritize ADCT programs with efforts. Last but not least, I have to say Overland, we are not a typical biotech because we backed up by Hillhouse. As the successful long term leading investor, when we build out Overland, we invest in the team from the very beginning. We accelerate hiring process over capable and incredible development team even before the deal. With that being said, I think the timing works out to have the team and tell our story and win ADCT’s trust.
Pete:
I fully agree with Ed. I think it’s the foundation of the relationship. We spoke about the trust and team. At the end of the day, I think it really about the people. When you set up a collaboration, trying to do a deal, if you do not get the people component right from the beginning, there will be issue in the future. Therefore, there is big emphasis on doing it with the right people. To make sure the right people, have the cultural fit, I think we saw from that context from Overland colleague share the similar attitudes with ours which was get things done, be transparent and have trust in the system. That was the people component. The other component was about having a dedicated team. We for fortunate enough to incredible amount of interest in Lonca in the pipeline from multiple players in China including very large players. The thing was quite clear to us was some of the companies had enormous pipelines. Then going back to the point that how to make Lonca be the shining new tool. So, we were really impressed with Overland putting a dedicated team to focus on the ADCT program. Another thing that I mentioned also earlier been Hillhouse backed biotech, not just thinking about having a dollar sign or having capital access in mind, more broadly, it was the interaction with Ed and Ed’s colleague at Hillhouse, it was quite fulfilling and rewarding. We saw they could bring more than just capital, which was important for trial development, but they could bring a network, a quite extensive network to ensure ADCT get the access to the expertise that we initially looking for.
Echo:
Cannot agree more. We really see Ed and the team been dedicated to this deal and figure out ways to put the resources and align with the expectation. People may see this as an easy process, simply you have the resources, putting things together so the other side could understand. The reality is not. I believe Overland did a great job on presenting the thinking behind in an easily understandable way. Some of the larger pharmaceutical companies that we talk to, they focus on themselves more rather than thinking about what the other side looking for.
Pete:
It is and it is critical, and we saw that they were true to their words then you build up that relationship of trust which translated into as Ed mentioned, we were collaborating as we were doing the deal. This ultimately led to patient benefit because we get Lonca to patient in some ridiculous short period of time.
Ed:
My suggestion here is that when we work with partners with different culture backgrounds, it is important to understand and appreciate our differences. It’s okay to have difference but we should always think from other’s perspective. At the end of the day, the key to success is to understand each other. It is not about how we get deals done, it is more about long term execution.
Pete:
You bring up a good point about culture. I think we talked about the culture difference within a context of a company but from our perspective it added another layer of geographic difference and was new to a lot of the people. The process of understanding the difference here is also a process of building up the appreciation and see where people were coming from. Echo, I think this is where you were an integral competent of making this relationship happen.
Echo:
The deal making process made me think I am a psychist and comforting both sides in the middle. I woke up had calls with Pete and then in the afternoon had calls Ed, the two teams had several calls in the middle. During the negotiation process, it is easily to get emotional and fight over the minor issue. Overall, I was so proud that I built such relationship here. Three of us had not sat on the same table, face to face but we did the deal.
Pete:
Yes, Echo. Just like you pointed out, three of us we have not sat on the same table, no face to face conversation ever. It is amazing to have such achievement during a such difficult time, COVID. I think that even put a bigger emphasis on that personal touch, that interaction, the trust. But, we did it.
Ed:
Both Pete and I really appreciate Echo regarding your advice and the kind of help along the way. I found that to be quite important during the discussion. To some degree, you become such respectful party in the middle, given Pete and I cannot meet up in person. I think having an advisor between, played an important role of our successful partnership at the end.
Echo:
Appreciate all your kind words. I think it is more about vision. And Ed you take every piece of ADCT information seriously to think about solutions and so on. Also, Pete at the time spent more than half a year with my team to understand China. When they get into the negotiation, half China expert already.
Let’s do something fun. There were several times that I was worried that the deal could fall apart. Do you remember such moment?
Ed:
The nature of this complex contract negotiation, for people involved in such discussion sometimes, always some sticking points during discussion. One thing I remember vividly was about the non-compete terms. I truly understand why we need such terms in the contract. But then it would be about how broad, how narrow or practical of those terms are. In that regard, Pete and I did spend a lot of time discussing certain points. At the end of the day, we really thinking from both perspectives for example for us a new company it is hard to commit not to do a lot of things because we cannot predict say 10 years down the road what will happen. Then, from Pete’s perspective it was quite important to avoid certain conflicts. What made us reach the agreement is understanding both sides which took some time, but as long as we have a common interest to really accelerate and bridging innovation for patients. We have our goal set, we will find a way to address the disagreement.
Pete:
Every deal has sensitive areas and each company has their own area of sensitivity and the way to get over that is just been transparent, have the conversations and as long as you know there is a mindset of trying to find solutions which we all have ultimately we did the deal.
Ed:
One more thing, we should not let legal to manage to drive. Sometimes it is a business decision, we have to take the responsibility and make the decision. We both had internal and external legal counsels, they were involved to certain degrees but if that is a business decision then we should make the decision for the best interest of the company and the product. We should not let legal to navigate and manage and held the discussion.
Pete:
That’s a general golden rule for any deal. It is business responsibility and land on that. It’s a relationship thing and we both had the moment of pick up the phone and ask is this really an issue? We can then take it off-line rather than taking the whole group.
Echo:
For the last few minutes, let’s talk about future. You guys have made some record to close the deal, bring the drug to patient in China. What’s next?
Ed:
It’s really about deliver of what we discussed and reach the goal. Again just like Bio Around World vision, really about bridging innovation, to bring the truly differentiate therapy to patients. We always against the clock. In the past year, after deal close, Overland have received strong support from ADCT. We are able to submit 4 CTA within a year and all of them approved without any delay and in fact some of them approved ahead of the deadline. We have 2 trials on going now, the bridging pivotal trial, the FPI happened within 9 month after deal close. Again, really appreciate team’s efforts and ADCT’s support. Of course, along the way, we see challenges as long as we share the same vision. We will find a solution to any issue. To my points earlier, we should be open minded and think from other people’s perspectives with such mindset we will be successful.
Pete:
Deliver on the promise. We have already had some success on that with evidence to support. Add to Ed’s point, we always learning. We got off to a great start, we talked about culture, relationship, getting the operation up and running in parallel to negotiation really got us off to a good start, but there is always areas that we can learn and keep exploring. For example, we had a great model but we have already changed that during the collaboration as we testing out other more efficient ways. By having the continued transparency as we always do, to get things moving in right way.
Another thing is that no been able to physically meet could cause some hardship in relationship building. It’s really to appreciate our colleagues on how hard they have worked along the way, communicating, negotiating to make things work. Therefore, personally I look forward to the time when we can sit in the same room, visit our sites. I could see what could happen in the future beyond what we have already achieved.
CASE STUDY #2 How to Maximize Your Asset’s Value for Deal Making: A Case Study Presentation by NeoImmuneTech
Speaker: Samuel Zhang, PhD, MBA, Chief Business Officer, NeoImmuneTech, Inc.
Apr 20th, 2022, in the BioAroundWorld Event, Dr. Samuel Zhang, Chief Business officer of NeoImmuneTech, shared a successful case study about how to maximize your asset's value for deal-making. Dr. Zhang shared the case study based on what NeoImmuneTech has done over the last three years.
Common biotech deals and key drivers
1. Pre-clinical proof of concept (PoC)
Deal characteristics:
Typically, $25 million or less in upfront (plus development and commercial milestones)
Single-digit royalties
Key deal driver:
Scientific value of the pathway
Desirable biochemical property of lead compound(s)
2. Post clinical proof of concept (PoC)
Deal characteristics:
Typically, $100 million or more in upfront (plus development and commercial milestones)
Double-digit royalties
Key deal driver:
Compelling clinical data in a high commercial value treatment setting(s)
3. Commercial stage assets
Deal characteristics:
Typically have even bigger deal size
Key deal driver:
Sales results
Market potential
Competitive landscape
If you can do the second type of deal, you can reach the third category efficiently as well. I'll focus on the second type of the deal, the post-clinical prove concept deal, and share how to generate compelling clinical data in higher commercial value treatment settings.
There are two scenarios. In the first scenario, you can leverage clinical PoC data achieved by your competitor with the same MoA. There are plenty of examples in the industry. For instance, Merck leveraged the clinical PoC data of BMS to move their PD-1 assets to the clinic.
However, sometimes we're not that lucky. We have to generate the clinical PoC data on our own. How to transform cutting-edge science into breakthrough medicine is a challenge for the biotech industry.
Early-stage biotech has strong science, quality lead assets, investor support, and an experienced management team. These are required elements for success. What we want fast is strong clinical data that indicate a registration pass in a large commercial potential.
In the meantime, we are preparing our manufacturing capacity to launch the product once we reach the market.
NeoImmuneTech was funded in 2014 based in Rockville, Maryland. When I joined in May 2019, we had just raised $92 million in serious D. We were quickly expanding in personnel and operations. And we have an experienced senior management team with very rich large pharma experiences.
Our lead asset NT-I7 is the only long-acting IL-7 in clinical testing. And we strongly believe that it is uniquely positioned to address unmet medical needs in Immuno-Oncology. IL-7 is perhaps the most important cytokine for lymphocyte development survival. It can enhance immunity to cancer as well as infectious diseases. Back in 2009, IL-7 was ranked as one of the most promising novel I-O MoAs, right behind CTL-4 and PD-1.
We started with the scientific strength of our molecule. Then we identified significant unmet medical needs that the science can help address. We further understood the needed product profile to succeed competitively. We discovered an efficient and effective clinical development plan to demonstrate the product profile. And then, we prioritized clinical development feasibility, probability of technical success, and market potential. We must know what kind of risk we're taking and why we're taking that risk. Once you have your strategy in place, you need to activate that strategy quickly. This entire strategy requires an integrated cross-function understanding and collaboration.
Let me elaborate on how exactly we did that. Start with science. IL-7 is perhaps the most important cytokine for lymphocyte development and survival. The cytokine helps in blood cell generation for the multipotent progenitor to commit to the lymphocyte lineage. And then, it helps the lymphocyte progenitors to develop into T cells and NK cells. Without IL-7 signaling, 99 % of T cells do not survive to maturity.
Based on science, we believe that NT-I7 can have a broad therapeutic potential. For instance, in immune-oncology, it can combine with all T cell target therapies, including the checkpoint inhibitor, CAR-T, TCR-T, T cell engager, cancer vaccine, other cytokines, chemo, radiation, etc.
It probably can play a critical role in infectious diseases, especially for those that do not have effective anti-viral or anti-bacterial treatment in place. Alternatively, it can combine with effective anti-viral anti-bacterial therapy. Furthermore, it can be used to enhance vaccines. It also can be used to treat sepsis or prevent substance.
It could play an important role in immune reconstitution, such as acute radiation syndrome and bone marrow transplantation. It could be important for CAR-T and TCR-T as well, particularly when immune depletion is used as part of the regiment.
As a small biotech company, we have a limitation on resources, both human resources and financial resources. Therefore, we need to prioritize. First, we focus on immune oncology. We think NT-I7 can be an ideal combination partner for checkpoint inhibitors and other T cell target therapies. First of all, it is the most important cytokine for T cell development survival. Furthermore, IL-7 has been shown to sustain the immune response to chronic antigens. It is also important for lymphocyte homing to tumor and infection sites. In addition, as a homeostatic cytokine, it also has an excellent safety profile.
IL-7 in its natural form, however, is very difficult to develop as therapeutics. Therefore, we did two types of engineering. The N terminal engineering enables high stability and high productivity. It keeps IL-7 active. C terminal engineering, the so-called high execution technology, extends the half-life in vivo, significantly improving the PK/PD profile.
As a result of both N terminal and C terminal engineering, we could also improve CMC production yield up to 126 fold. With this engineering and intellectual property rights protection, NT-I7 can offer NeoImmuneTech and its partners an exclusive competitive advantage.
The next step is to develop a strategy and execute the strategy. The first business opportunity we looked at was immune-hot tumors, checkpoint inhibitor treated patient population. This is a $15 billion per year business opportunity or more. What's attractive is that it has a very low efficacy bar, basically a 5%- 8% response rate. And There's limited competition. With a low efficacy benchmark, if we see a compelling response rate, that means the combination is better than the monotherapy. A low efficacy benchmark can also help avoid previous challenges seen with DIO and PDG-IL2 single-arm studies. They are testing in the immune checkpoint naive patients where the response rate is already high. Even if you see a pretty good, healthy response rate, it's still very difficult to tell whether that's just because of the sample selection or something your assets contribute.
And because of a low efficacy bar and limited competition, it has a fast market possibility. Even a single-arm study with 25 patients could achieve clinical proof of concept, paving the way for accelerated approval.
Because it has high clinical feasibility, high scientific merit, and large market potential, we believe that this is a good opportunity to pursue. The key uncertainty is whether IL can work at all in CPI treated patients.
The next business opportunity we looked at was immune-cold tumors. This is a $15 billion per year business opportunity. Actually, 3 of the 4 large tumor types are so-called immune cold tumors. Two of the immune co tumors have a really low efficacy bar, basically a 0 % response rate. Immune-cold tumors are cold "Holy grail" for novel I-O MoAs because PD-1 does not work here.
If a novel I-O MoA can help PD-1 work here, that can expand the frontier of immune-oncology. It will have a great halo effect. Everyone is going to pay attention to that. Similar to the immune-hot tumor, it has a fast market possibility. A single-arm study with 25 patients probably can help achieve clinical PoC. And accelerated approval is possible with more patients enrolled.
Based on the high clinical feasibility, high scientific merit, and large commercial opportunity, we also feel this is a good business opportunity to pursue. The key uncertainty is whether an additional checkpoint inhibitor is needed for IL-2 to work.
The last business opportunity we looked at was immune-hot tumors and checkpoint inhibitor naïve patients. This is an opportunity with more than $30 billion per year. But it has a high efficacy bar, with a 30% to 50 % response rate. We would need to compete with various combos. We may need a randomized trial to demonstrate clinical proof of concept. In addition, we will need a phase 3 randomized trial for approval, perhaps a quite large phase 3 study. In this particular setting, I-O has achieved tremendous success already. It's the largest but competitive market. Therefore, we were also in this space because of the large commercial potential, but we ranked its priority as 3.
After we had our strategy in place, the next step was speedy execution. For business priorities number 1 and number 2, we established clinical collaboration with Merck quickly. For business priority number 3, we established the clinical collaboration with BMS afterward and a second clinical collaboration with Roche. We had clinical collaborations with 3 largest I-O leaders in the world to develop NT-I7.
We initiated the discussion with Merck in June 2019. We had a tentative agreement 2 months later. We had a definitive agreement 4 months later. While we were discussing the agreement, our clinical teams were working together to develop the protocols. When the definitive agreement was signed, we were able to submit the IND application to the FDA. In 30 days, we got clearance. Despite the COVID hit in March, we were able to enroll the first patient just 5 months after IND clearance. We initially scheduled to have the first patient first visit in April. However, because of the widespread clinic shutdown, it was postponed by 2 months. As soon as the investigator site reopened, they started to enroll patients. One year later, we were able to report the dose escalation data at ASCO. 18 months later, we reported initial efficacy data at SITC last November.
We reported provocative initial efficacy results at SITC 2021, just 18 months from the first patient dosed. In both MSS CRC and pancreatic cancer, there was no clinical response expected from Pembro along. However, we were able to see 3 out of 17 patients in the MSS CRC cohort treated with NT-I7 in combination with Pembro achieved partial response by iRECIST. In pancreatic cancer, we also see one partial response. In the CPI monotherapy treated patient, as I mentioned earlier, we expect no response. We are encouraged by these results.
We were also able to connect science with this clinical collaboration and, therefore, further strengthen the credibility of this initial efficacy signal observation. Hence, at this time, for immune cold tumors, we have a provocative early efficacy signal in MSS CRC. We also see an early efficacy signal in 2 additional immune cold tumors, pancreatic cancer and HGG. We are actively investigating NT-I7 in PD-1 Progressors and PD-1 naive patients.
To summarize, we start with the scientific strength of our assets. We identified a significant unmet medical need that the scientific strength of the molecule could help address. And then, we took a deep dive into the needed product profile to succeed. From there, we discovered an efficient and effective clinical development path to demonstrate the needed product profile. We prioritized based on clinical development feasibility, probability of techniques success, and market potential. Once we had a strategy in place, which required integrated cross-functional understanding and collaboration, we went to speedy execution.
Within 2 years of clinical collaboration, we were able to demonstrate a provocative initial clinical efficacy signal and were able to connect science with the initial efficacy signal observed.
CASE STUDY #3: The current landscape and future perspectives of Galectin-3 inhibitors in fibrosis-related diseases and cancer
Speaker: Stephanie Oestreich, Chief Business Officer, Galecto
On April 20th, 2022, Stephanie Oestreich, Chief Business officer of Galecto, shared a successful case study about the current landscape and future perspectives of Galectin-3 inhibitors in fibrosis-related diseases and cancer at the BioAroundWorld event
· Galecto is a clinical stage biotech company developing small-molecule drugs targeting two essential proteins in cancer and fibrosis, Galectin-3 and LOXL2.
· Galectin-3 overexpression and LOXL2 are associated with poorer prognosis in cancer and fibrosis.
· Galecto have four Phase 2 programs with expected readouts by mid-2023.
The transcript of the talk was presented here and has been lightly edited for clarity:
I’m very excited to speak to you today about Galectin-3 inhibitors in cancer and fibrosis-related diseases. Galectin-3 overexpression and LOXL2 are associated with worse outcomes in cancer and fibrosis. Galectin-3 is a 30kDa β-galactoside binding protein, a unique member of conserved galectin family. The expression occurs mainly on epithelial cells, macrophages and activated T cells. And increased galectin-3 in tumor, serum and lymph nodes is associated with metastasis and worse prognosis in several cancers.
Increased level of tumor galectin-3 significantly drives the hallmarks of cancers. It reduces cytotoxic T cells , which results in the resistance to chemotherapy and checkpoint inhibitors. It also increases the extracellular matrix proliferation, angiogenesis, and cancer stemness, as well as M2 macrophages, cell proliferation and metastatic potential, but decreases apoptosis.
Galectin-3 is a key driver in multiple oncology indications since it modulates tumor growth and immunosuppression in the tumor microenvironment. Importantly, Galectin-3 expression also predicts response to pembrolizumab:. high galectin-3 expression in patients with NSCLC show higher tumor growth and less response to checkpoint inhibitors (CPIs) than patients with low galectin-3. Therefore, high galectin-3 expression in patients with NSCLC strongly correlated with tumor resistance to pembrolizumab.
There is overlapping biology in fibrosis and cancer through galectin-3 and LOXL2. Both are master regulators that are fuelling key pathological pathways in fibrosis and cancer. LOXL2 is especially important in collagen crosslinking, and therefore in fibrosis. While galectin-3 drives several pathways in cancer, both have overlaps by down-regulating apoptosis, up-regulating M2 macrophages and self-proliferation, as well as angiogenesis. Galectin-3 also impacts key elements in the fibrosis cascades which is inhibited by Galectin-3 inhibitors. There are effects on macrophages, but also on epithelial cells, mesenchymal cells, fibroblasts, myofibroblasts and collagen.
At Galecto, we're developing Galectin-3 inhibitors in cancer and in fibrosis. Galecto is a clinical stage public biotechnology company listed on the Nasdaq and are committed to the development of novel small molecule therapeutics for the treatment of fibrosis and cancer. These are targeting galectin-3 and LOXL2, and we also have wholly-owned, broad IP coverage including composition of matter into the late 2030’s without patent term extension. With a deep clinical pipeline, meaningful upcoming catalysts, and three Phase 2 trials in IPF, myelofibrosis and liver cirrhosis ongoing, our lead asset GB0139 is a potentially first-in-class with FDA and EMA orphan drug designation. And we are about to start a Phase 2 study in NSCLC in collaboration with Roche. Our cash balance allows us to complete all these phase 2 trials.
Regarding to the clinical pipeline, GB0139 is an inhaled Galectin-3 inhibitor that we're developing for IPF. The Phase 2b enrolment has been completed and the planned readout is in the mid-2023. GB2064 is the oral LOXL2 inhibitor that are developed in myelofibrosis. We are completing this to Phase 2a enrollment currently and have a planned readout in 2H 2022. GB1211, the oral Galectin-3 inhibitor, is about to be tested in NSCLC together with a collaboration with Roche, and we expect the readout in the mid-2023. We are testing the same molecule in fibrosis and completed enrollment of Phase 2a and expect data readout in the 2H 2022. Galecto has a very experienced management team with multiple years of background in both biotechnology and pharma-companies.
GB1211, the oral Galectin-3 inhibitor, increases CD8+ T cell recruitment and potentiates the CPI response. We have chosen NSCLC as the first indication because of a very high and unmet medical needs. In addition, galectin-3 is a very promising target that predicts overall poor survival and response to checkpoint therapy. The checkpoint therapy is very well established for the treatment of NSCLC, however, 40-60% of the patients don't respond to therapy. Galectin-3 inhibitors show both anti-tumor effects, T cell activation to LAG3 blockade, macrophage polarization and increased apoptosis. There are multiple opportunities in oncology for Galecto as galectin-3 may have important antitumor activity and the inhibition of galectin-3 may have anti-tumor activity as monotherapy and in combination with checkpoint inhibitors, chemo- and radiotherapy. Galectin-3 is a negative regulator of immune cell functions and drives low CPI response rate. GB1211 is a specific oral Galectin-3 inhibitor ready for Phase 2. The collaboration with Roche on upcoming NSCLC trial will be the first trial for GB1211 in solid tumor indication. And we planned initiation in 1H 2022 with expected topline data readout in mid 2023.
GB2064 is an oral LOXL2 inhibitor in myelofibrosis. LOXL2 is an enzyme that links in fibrillar collagens and it's important in the collagen formation. GB2064 therapy could therefore potentially be disease modifying in multiple fibrotic indications. Myelofibrosis is an orphan indication with current therapies, the JAK inhibitors, that are not disease modifying. It’s a very large market with multi-billion sales opportunity. There is ample evidence for a central role of LOXL2 in fibrosis and cancer. GB2064 potently inhibits LOXL2 and therefore shows antifibrotic activity in numerous models. Our current Phase 2a trial could generate both target engagement and efficacy data, as repeated biopsies are already standard practice. The Phase 2a trial started in Q3 2021 and we are expecting topline data in the 2H 2022.
GB0139 is an inhaled Galectin-3 inhibitor that developed as a potentially ground-breaking novel treatment for Idiopathic pulmonary fibrosis (IPF), an orphan disease with poorly tolerated treatments. IPF is a very large orphan indication with suboptimal treatment solutions. There are approximately 100,000 patients in the US; 68,000 patients in EU5. It is a progressive, irreversible, and ultimately fatal lung disease characterized by decline in lung function. The median survival for patients is 2-5 years, and the death is normally caused by respiratory failure and the unknown causes. The2 approved drugs, Pirfenidone and Nintedanibm, could slow disease progression. However, both have side effects that make less than 50% of patient stay on treatment. However, these are still multibillion blockbusters.
Therefore, the GB0139 is developed as a potentially ground-breaking novel treatment for IPF. The inhaled delivery approach allows GB0139 to reach the target cells in the lung at high concentrations and causes a dose-related reduction in cell surface deeply within patients’ lungs. There is a promising biomarker trend observed in phase 2a study and validated by EMA as clinically relevant in IPF patients and basis for orphan drug designation.
Moreover, GB1211, the Galectin-3 inhibitor, is also developed for the treatment of liver cirrhosis. The prevalence is ~2 million patients in the US, ~3 million in the EU. It is a severe, progressive liver fibrosis ultimately leading to severe liver failure. It is caused primarily by NASH, an alcoholic liver disease and viral hepatitis. The median survival of patients is ~2 years for decompensated cirrhosis, and there are limited treatment options including liver transplantation. There's ample evidence for oral Galectin-3 inhibitor for advanced liver cirrhosis. Galectin-3 is elevated in alcoholic and non-alcoholic cirrhosis and in toxic hepatitis. Galectin-3 is used as a prognostic biomarker of the hepatocellular carcinoma, a known complication of liver cirrhosis. Preclinical data suggest Galectin-3 inhibition may address the cirrhosis. In addition, galectin-3 reduces development of fibrosis, and galectin-3 is also required for TGF-β mediated myofibroblast activation and matrix production liver fibrosis. Galectin-3 inhibition also reduces YKL-40, a biomarker that is elevated with progressive liver fibrosis. Extensive pre-clinical evidence for galectin-3 as a key driver in fibrosis in many organs. Therefore, at Galecto, we have completed the Phase 1 successfully with GB1211, the oral Galectin-3 inhibition. And we are developing this molecule currently in Phase 2a study since the Q4 2021 and expect topline data in 2H 2022.
In summary, Galecto is a clinical stage biotech company developing small-molecule drugs targeting two essential proteins in cancer and fibrosis, galectin-3 and LOXL2. We have four Phase 2 programs for which we expect readouts by mid-2023 and Glacto is well funded into the 2H 2024.
At the BioAroundWorld event on Apr 20th, Tony Chen, Partner at Jones Day, presented during the Expert Knowledge Sharing session covering the following topic: Pharmaceutical Patent Listing in China – Impact on Drug Licensing Deals.
China amended the patent law in June of 2021, less than 1 year ago, and it has been already having a huge impact on deal making, and drug licensing in China. To put it simply: No China Patent, No Deal.
Looking back to the reformations that the Chinese government implemented, specifically with the implications of the two patent/price cliffs, ie 1) National Reimbursed Drug List (proprietary drugs, with patent protection), and 2) Volume based Procurement (generic into the market, patent protection expired), drug pricing has been significantly impacted.
For example, take the price of Gefitinib:
Before 2016, retail price was $612.86 per unit.
After entering the NRDL in 2017 (after 1st round of national price negotiation) the price dropped to $336.86 per unit.
After it was included in the VBP (1st round centralized tender) at the end of 2018, the price further dropped to $78.14 per unit. (VBP will only happen after patent expired and generic come in to play)
Another example ie Metformin, post generic the per tablet cost for a patient is less than 0.02 RMB.
How to stay away from patent cliff in China?
The patent exclusivity period (π) in China could be much shorter than that in the US. Take an example of KYPROLIS, the π in China is 4.1yrs and the π in US is 14yrs. Therefore, if the patent exclusivity period is too short, it should clearly not attract the potential licensee to conduct a deal transaction.
Since July 2021, to check for the patent exclusivity of a marketed drug in China, we could use China Patent Information Registration Platform for Marketed Drugs (CPIRPMD; China’s Orange Book)
As of April 15th, 2022, the platform listed 974 chemical drugs, 101 biologics, as well as 289 TCMs, and a total of 1579 patent declarations have been filed by generic drug companies.
The linkage system has three functions:
MA holders to request patent listing
CDE to publish patent listing under individual new drug registrations
Generic drug and biosimilar companies to file patent declarations
What Patents are eligible for Orange Book Listing?
Chemical Drug
Compound patent: active ingredient(s)
Composition patent: compositions containing active ingredient(s)
Indication patent
Biologics
Sequence patent of active ingredient(s)
Indication patent
Traditional Chinese Medicine
Patent declarations by generic or biosimilar
Type I: No Listed patent on CPIRPMD
Type II: Listed patent expired, or declared invalid or licensed to generic applicant
Type III: The applicant promises not to market the generic drug prior to the expiration of listed patents
Type IV: The listed patents shall be declared invalid (4.1), or the generic drug does not fall into the protection scope (4.2) of the listed patents
And because of the linkage system, the licensor has often been questioned about the following:
Do you have patents for listing in Orange Book?
How many years of protection will OB patents provide?
Can OB patents withstand invalidation challenges?
One fact is that the invalidation challenge success rate is quite high in China, roughly 50% chance.
Common Patent problems in deal making
No patent filing in China
PD-1, PD(L)1
CAR-T
Patent claims are too narrow
Not protecting the product
Cannot be listed in Chinese Orange Book
Patent claims from the US and Europe not suitable for China
Drug dosage and administration method
Broadly defined antibody claims
Patent challenge from generic drug competitors
Prepare China Patent Portfolio to support deal making
Obtain multiple patents in a family
Prosecute patents in anticipation of patent linkage litigation
Plan for patent term extension
Overview of China’s Hatch-Waxman Act
The China’s Patent Law was amended on June 1st, 2021. A new article, Article 76, was added to the Law. This Article 76 stated that innovator can sue the generic company when generic company apply for regulatory approval and the lawsuit can be brought up before the generic drug gets approved by the NMPA. If the original developer wins the lawsuit, the generic drug will not be approved until the OB patents have expired.
This event were well-received and we got highly positive feedback. BioAroundWorld will continue to organize more sharing and communication in the biopharmaceutical industry. We hope to see you again at our next event soon!