2022 has been a tough year for most of the pharmaceutical companies but cold winter will pass eventually. We at EqualOcean presented the 2022 year-in-review in two parts. In the second part, we will list major M&A, product approvals, and strategic collaboration news. It's by no means exhaustive, but it'll shed some light on what's to come
1. M&A
Boston Scientific Pays USD 523 Mn for Control of Chinese Device Maker Acotec
On December 12, 2022, US medical device maker Boston Scientific announced that it would make a partial offer for a majority stake of up to 65% in Chinese medical technology company Acotec Scientific Holdings. Boston will pay HKD 20 (USD 2.57) a share, for a total cash payment of about USD 523 million in order to gain a foothold in China’s growing market for vascular disease technologies. Acotec Scientific develops medical devices, including drug-coated balloons (DCB) and percutaneous transluminal angioplasty balloon catheters (PTA), which are mainly used to treat vascular interventions. The completion of the partial offer is expected to strengthen Boston Scientific’s presence in China and create the potential for the commercialization of Acotec products globally, offering an increased number of physicians and patients access to its robust and complementary product portfolio.
Ping An Health Acquires Ping An Smart Healthcare
On October 23, 2022, Ping An Health annouced the acquisition of Ping An Smart Healthcare, a business segment of Ping An Smart City, for the consideration of USD 96.86 million. Ping An Health is a health management service provider based on managed care + family doctor membership + O2O healthcare services. Ping An Smart Healthcare is also a health management service provider specializing in supplementation of chronic disease services. Through this acquisition, both companies are expected to achieve business synergies, enhance efficiencies and accelerate the building of an integrated O2O healthcare services platform catering to health, sub-health, disease, chronic disease, and eldercare management, aiming to improve national health literacy and empower the initiative of "Healthy China 2030"
CR Sanjiu Plans to Acquire Stake in KPC to Foster Synergies
On May 8, 2022, China Resources Sanjiu Medical & Pharmaceutical Co Ltd (CR Sanjiu), a subsidiary of China Resources Co., Ltd., announced that it planned to acquire 28% (21,200 shares) of Kunming Pharmaceutical Corporation (KPC) for a cash consideration of CNY 2.902 billion. CR Sanjiu was listed on the Shenzhen Stock Exchange in 2000, dedicated to the research, production, sales of medical products and healthcare services. It has built a portfolio of four major businesses: Herbal medicine, quality national medicine, international chemical medicine and healthcare distribution. KPC is a pharmaceutical company focusing on innovative natural botanical drugs. Its business scope covers traditional Chinese medicine, chemical medicine and medicinal circulation. After this acquisition, KPC and CR Sanjiu are likely to yield win-win results through resource sharing driven by multiple categories, strong brands and various channels.
Shandong Weigao Orthopaedic Device Plans to Acquire Medical Instrument Firm Weigao New Life
On December 13, Shandong Weigao Orthopaedic Device (Weigao Orthopedic) announced that it planned to acquire 100% of Weigao New Life for a cash consideration of CNY 1.03 billion. Upon this affiliated transaction, Weigao New Life will become an indirect wholly-owned subsidiary of Weigao Orthopaedic. Weigao Orthopedic is China's largest medical device manufacturer, specializing in orthopaedic implants, spinal systems and related surgical instruments. Weigao New Life is also a medical device manufacturer with a portfolio of four major pipelines: wound care, extracorporeal circulation, invitro fertilization and respiratory care. With this acquisition, two companies can achieve synergies as Weigao New Life's products can be used in orthopaedic surgery, which helps Weigao Orthopedic expand its product portfolio.
Genertec Universal Seeks Full Ownership of Genertec Minmetals Hospital
On August 1, 2022, Genertec Universal Medical Group announced that it planned to take full control of Genertec Minmetals Hospital Management by acquiring the 54% stake it does not yet own in the hospital joint venture with MCC, CITIC. According to the announcement, Genertec will pay CNY 1.1 billion for the buyout. Upon completion, Minmetals Hospital will become an indirect wholly owned subsidiary of Genertec Universal. Minmetals Hospital is principally engaged in management of hospitals and retail of drugs. Genertec Universal is an integrated healthcare service provider, committed to building up hospitals' comprehensive strengths in terms of healthcare technology, service quality, operating efficiency as well as managerial capacity. The Acquisition is inline with the national policies of reform on state-owned enterprise-affiliated hospitals and would make it more efficient for Genertec Universal to improve efficiency of operations of its medical institutions.
Conclusion
In 2022, leading companies continue to strengthen their presence in China and create the potential for the commercialization of their products globally. Boston Scientific has made a partial offer for a majority stake globally in a Chinese medical technology company to gain a foothold in China's growing market for vascular disease technologies. For domestic companies, most M&As happen between a parent company and a subsidiary company, which belongs to integration strategy that achieves business synergies. CR Sanjiu acqures stake in a Chinese traditional medicine company KPC. This type of M&A belongs to diversification strategy, which indicates that CR Sanjiu intends to enter into a new business.
2. Drug Approvals
Y-mAbs' Danyelza (naxitamab-gqgk) for the Treatment of High-Risk Neuroblastoma Approved in China
Y-mAbs Therapeutics, a commercial-stage biopharmaceutical company focused on the development and commercialization of novel, antibody-based therapeutic products for the treatment of cancer, announced that the National Medical Products Administration (NMPA) in China has granted DANYELZA (naxitamab-gqgk) 40mg/10ml conditional approval on Decmber 8, 2022. DANYELZA will be marketed in China by Y-mAbs' partner SciClone Pharmaceuticals. DANYELZA is indicated, in combination with granulocyte-macrophage colony-stimulating factor (GM-CSF), for the treatment of pediatric patients 1 year of age and older and adult patients with relapsed or refractory high-risk neuroblastoma. To date, 3 anti-GD2 antibodies have been approved for human use: naxitamab (Danyelza) and dinutuximab (Unituxin) in the United States, and dinutuximab beta (Qarziba) in Europe.
FDA Approves Janssen and Legend Biotech’s Cilta-cel to Treat R/R Multiple Myeloma
On February 28, 2022, Janssen and Legend Biotech's Cilta-cel has received approval from FDA for the treatment of adult patients with relapsed or refractory multiple myeloma after four or more prior lines of therapy, including a proteasome inhibitor (PI), an immunomodulatory agent (IMiD), and an anti-CD38 monoclonal antibody. In 2017, Legend Biotech entered into the agreement with Janssen to develop, manufacture and commercialize Cilta-cel for the treatment of multiple myeloma. Under the agreement, Legend Biotech received an upfront payment of USD 350 million and is entitled to receive additional payments upon achievement of landmarks for development, production performance, regulatory and sales. And Legend Biotech announced the achievement of a USD 50 million milestone on April 21, 2022.
RemeGen Gets Orphan Drug Designations from FDA for Anti-Cancer Drug RC118
RemeGen, a Chinese leading bio-pharmaceutical company with its comprehensive and integrated antibody-drug conjugate (ADC) platform, announced that FDA had granted two orphan drug designations for RC118 on December 8, 2022. RC118 is RemeGen's self-developed innovative ADC drug targeting Claudin 18.2 for the treatments of gastric cancer (including gastroesophageal junction caner) and pancreatic cancer. Currently RC118 has been showing safety and tolerability in ongoing dose-escalation studies. Before RC118, two biologic candidates have already gained FDA's Orphan Drug designation, Telitacicept for the treatment of myasthenia gravis and Disitamab Vedotin for gastric cancer.
NMPA Aprroves Qilu Pharma's Aprepitant Injection
Leading vertcally integrated pharmaceutical company Qilu Pharma announced that its product Aprepitant Injection had been approved by the National Medical Products Administration (NMPA) in China on September 2, 2022, which was the first generic drug in China. Aprepitant is a substance-P receptor (NK1) indicated for preventing acute and delayed nausea and vomiting associated with initial or repeated courses of moderately and highly emetogenic cancer chemotherapy for adult patients with cancer. Now Qilu Pharma has developed and marketed more than 300 drugs with 110 passing consistency assessments.
NMPA Approves Hua Medicine First GKA Approval in Diabetes
On October 8, 2022, Hua Medicine has received marketing approval from China's National Medical Products Administration (NMPA) for its glucokinase activator (GKA), Huatangning (dorzagliatin tablets), for two indications: as a monotherapy to improve blood glucose control for drug-naive type 2 diabetes patients and in combination with metformin in metformin-tolerated type 2 diabetes patients to control blood glucose level. It is the first approved GKA worldwide, which also represents a new mechanism of action to treat Type 2 diabetes.
NMPA Approves Lepu Biopharma's Anti-PD-1 Monoclonal Antibody Pucotenlimab Injection
On September 29, 2022, innovation-driven biopharmaceutical company focusing on oncology therapeutics Lepu Biopharma announced that the National Medical Products Administration (NMPA) in China has recently granted an approval to pucotenlimab injection, a humanized antagonist monoclonal antibody (mAb) to human programmed cell death PD-1 which can antagonize the PD-1 signal to restore the capability of the immune cells to kill cancer cells through blocking PD-1 binding to its ligands PD-L1 and PD-L2, for the treatment of inoperable or metastatic melanoma after systemic therapy failure. The approval of pucotenlimab injection will bring a new option to tumor immunotherapies for more Chinese patients.
NMPA Approves Yichang Humanwell Pharma's Clobazam Tablets to Treat Seizures
On September 19, 2022, Yichang Humanwell Pharma announced that its pediatric drug Clobazam Tablets received marketing approval from the National Medical Products Administration (NMPA) in China for the treatment in combination therapy for treating seizures in patients no younger than two years old with Lennox-Gastaut syndrome (LGS). After approval, a generic version of Clobazam will be available at local pharmacies across the country for CNY 84, which would completely address acute needs of patients suffering the difficult-to-treat kind of epilepsy.
Conclusion
In 2022, Chinese innovative drugs have made great progress and small molecule drugs remain attractive for most medicine companies. Fourteen Class I new drugs obtained approval this year, covering cancer, endocrinal diseases, cardiovascular diseases, immune diseases and other diseases. Most of the drugs are antitumor drugs such as RemeGen's RC118, Legend's Cilta-cel, and Lepu's pucotenlimab injection. PD-1 is a popular target that many pharmaceutical companies have been paying close attention to and Lepu's pucotenlimab injection enriches this area. Claudin 18.2 is also a popular target, but no drug for this target so far has been approved for marketing globally except RemeGen's RC118. As most of the CAR-T products target CD19, Legend's Cilta-cel targets BCMA, a relatively less competitive target, and successfully becomes the second approved BCMA product. The most remarkable innovative drug in 2022 is Hua Medicine's Huatangning, the first-in-class GKA to treat Type 2 diabetes. Generic drugs also made some achievements, such as Yichang Humanwell's first pediatric drug Clobazam Tablets and Qilu's Aprepitant Injection.
3. Strategic Collaboration
Sanofi and Innovent Biologics Enter Strategic Collaboration to accelerate development of oncology medicines and expand presence in China
Sanofi and Innovent Biologics announced a collaboration to bring innovative medicines to patients in China with difficult-to-treat cancers on August 4, 2022. Innovent is a leading biopharmaceutical company with strong clinical development capabilities and a broad commercial footprint in China. Both companies are committed to accelerating the development and commercialization of two Sanofi key clinical stage oncology assets: Phase III SAR408701 (tusamitamab ravtansine; anti-CEACAM5 antibody-drug conjugate) and Phase II SAR444245 (non-alpha IL-2), combining with sintilimab, the leading checkpoint inhibitor in China. In addition to the collaboration and license agreement, Sanofi will invest €300 million in Innovent through subscription of new common shares.
Insilico Medicine Signs Strategic Research Collaboration with Sanofi Worth Up to USD 1.2 Bn
Sanofi and Insilico Medicine, a clinical-stage biotechnology company, announced a multi-year strategic research collaboration on November 8, 2022. The agreement will see Sanofi use Insilico’s AI platform, Pharma.AI, to advance drug development in up to six new targets. Under the terms of the agreement, Sanofi will pay Insilico Medicine a total of up to USD 21.5 million for upfront and target nomination fees to benefit from Insilico’s end-to-end Pharma.AI platform and gain access to a team of interdisciplinary drug discovery scientists to identify, synthesize, and advance high-quality lead therapeutic compounds up to development candidate stage. Additional payments for various research, development, and sales milestones reach as high as $1.2 billion, as well as mid-single to low double-digit tiered royalties for any products developed.
Inventiva and Sino Biopharm Ink NASH Deal for More than USD 300 Mn
French firm Inventiva and CTTQ, a subsidiary of China-based Sino Biopharm, had entered into a licensing and collaboration agreement on September 21, 2022. This agreement aims to develop and commercialize lanifibranor for the treatment of non-alcoholic steatohepatitis (NASH) and potentially other metabolic diseases in Greater China. In exchange for receiving an exclusive license to develop, import, manufacture, commercialize and market lanifibranor in Greater China, CTTQ will pay Inventiva an upfront payment of USD 12 million and an additional USD 5 million if certain clinical milestones are met. Under the terms of the Agreement, Inventiva has the potential to receive up to $290 million of clinical, regulatory and commercial milestone payments.
Conclusion
Most of the strategic collaboration occurs in the innovative drug industry. International leading companies cooperated with Chinese biotechnology companies to advance drug development in new targets. Stategic collaboration is also lead by multinational enterprises which seek business presence in China. For example, Inventiva cooperates with Sino Biopharm to obtain the first approval in the treatment of non-alcoholic steatohepatitis (NASH) and potentially other metabolic diseases.