Lilly gave up the overseas rights and interests of Cindilimab, and Cinda PD-1 had difficulty going to sea?

On December 1, foreign media FiercePharma reported that Lilly had officially waived the rights and interests of Innovent PD-1 inhibitor Tyvyt (sintilimab) outside China. Eli Lilly said in its third-quarter securities filing that it terminated Tyvyt's agreement outside China and re-handed the drug to Innovent Biologics.

It is reported that this time Lilly returned the overseas rights and interests of Cindilimab, and Cinda did not have to pay any fees. The $200 million authorized down payment previously received by Cinda does not need to be returned.

However, or affected by this news, on December 2, Innovent Biologics' stock price fell all the way. By the close, Innovent closed at HK$27.750, down 6.41%.

There are traces to follow, sales are sluggish, going to sea is failing...

Lilly's waiver of Innovent's PD-1 inhibitor Tyvyt (sintilimab) outside China seems to have traces.

According to the data, Cindilimab is an innovative biological drug jointly developed by Innovent and Eli Lilly in China. In March 2015, Innovent and Eli Lilly entered into a biotechnology drug development collaboration under the terms of which Innovent and Eli Lilly will jointly develop and commercialize oncology drugs, including dabosul (sindilimab injection), in China.

In December 2018, Cindilimab injection was approved in China for the treatment of relapsed/refractory classic Hodgkin lymphoma, which is also Innovent Biologics' first commercial product.

In August 2020, Innovent and Rite announced that they will expand their strategic partnership with Cindilimab, which will grant Eli Linly Sindilimab an exclusive license outside of China, and Eli Lilly will work to bring Cindilimab to North America, Europe and beyond.

Under the terms of the contract, Innovent will receive more than $1 billion in cumulative payments, including an upfront payment of $200 million and development and sales milestone payments of up to $825 million. In addition, Innovent will receive a double-digit percentage of net sales. Both parties reserve the right to develop Cindilimab in combination with products in their respective pipelines and other partner products.

Lilly's refund of Innovent PD-1 monoclonal antibody overseas rights is also based on this agreement. According to the official version, it was Cinda who mainly proposed to "break up" after friendly negotiations with Lilly.

However, many industry insiders speculate that the FDA's rejection of Cinda/Eli Lilly PD-1 marketing application in March this year may be the trigger. On March 24, 2022, the FDA did not approve the new drug application for sindilimab in combination with pemetrexed and platinum-based chemotherapy for the first-line treatment of patients with non-squamous non-small cell lung cancer. The Full Response Letter (CRL) almost replicates the objection to sindilimab at the ODAC meeting, where the FDA recommends that sindilimab in combination with chemotherapy and standard therapy for first-line metastatic NSCLC be conducted in a multi-region, non-inferiority clinical trial with overall survival as the endpoint. Innovent did not receive any potential milestone payments because of the rejection.

It is worth noting that in the earnings report submitted in August this year, Eli Lilly said that it did not intend to continue to submit applications to the FDA. Its third-quarter financial report showed that Cindilimab was affected by medical insurance and declined in three quarters. TyvytQ3 revenue was $76.8 million, down 39% year-over-year; First-half revenue was $159 million, down 26% year-over-year.

On the other hand, in the Chinese market, Eli Lilly and Cinda previously jointly promoted PD-1. It is understood that at the beginning of 2021, Eli Lilly established a PD-1 product line, responsible for the promotion of some non-core markets. However, soon after, the industry exposed rumors that the representative of Lilly's PD-1 product line was under pressure and the sales target fell sharply.

At the end of the year (December 8, 2021), there was news that Lilly's PD-1 sales team in China would shrink. Lilly said that from January 1, 2022, about 15% of the hospital visits Lilly has been responsible for since 2021 will be transferred to Innovent Biologics, and Innovent will be responsible for 100% of Cindilimab's hospital visits in China. Ji Liwen, president of Lilly China, also revealed in an interview with the media that Eli Lilly will re-divide labor with Cinda, and the future market of Cindilimab will expand from large hospitals to small and medium-level medical institutions.

Coincidentally, at that time (January 2022), Junshi Biologics and AstraZeneca also announced the termination of PD-1 monoclonal antibody cooperation, and the two sides "held hands" for less than a year.

In just a few years, the domestic PD-(L)1 market has become a red ocean, and although Junshi and Cinda PD-1 have the advantage of being approved first, it is difficult to withstand the emerging latecomers and the impact of price cuts such as medical insurance negotiations. In the first three quarters of 2022, Junshi Biologics, Innovent Biologics and BeiGene had sales of 516 million yuan, 1.66 billion yuan (according to Eli Lilly's financial report), and about 2.1 billion yuan, respectively, and BeiGene has come out on top. This year's medical insurance negotiations are imminent, when domestic PD-(L)1 players will usher in a new round of competition, and cabbage prices have become an indisputable fact.

More possibilities? The ice has yet to be broken at sea

Eli Lilly mentioned in the quarterly report that the refund will not affect the strategic partnership established by the two partners for a long time and cooperation on other products.

In March this year, Eli Lilly and Innovent reached an agreement to grant the latter exclusive commercialization rights to import, sell, promote and distribute remoximumab and seputinib in Chinese mainland after approval, and now that the two products are approved for marketing, Innovent will enter the harvest stage. This cooperation occurred after the failure of Cinda's PD-1 to go to sea, and industry insiders also believed that this move was Lilly's "blood transfusion" to Cinda. Eli Lilly's seputinib and ramoximumab have both been approved by the NMPA.

Regarding the "breakup" of PD-1, Innovent told the media that the business decision was very beneficial to the comprehensive layout of the company's tumor pipeline, and after having the overseas rights and interests of PD-1, it gave the company more initiative and flexibility in the comprehensive layout of the IO (Immuno-oncology, tumor immunity) pipeline in the future.

However, it is more unfortunate that domestic PD-1 players have been frequently blocked from going to sea this year.

Similar to Innoventa, in November this year, EQRx decided not to seek U.S. approval for CStone's PD-L1 inhibitor sugemalimab (sugemalimab) for the treatment of metastatic non-small cell lung cancer. The main reason is that the FDA review policy is tightening. Like Innovent's PD-1, CStone PD-L1 is only in key data in China.

Previously, due to domestic epidemic prevention and control policies that restricted FDA personnel from coming to China to complete the necessary on-site verification work, the US marketing application submitted by Junshi Biologics and BeiGene's PD-1 to the FDA was not approved as originally planned.

However, Junshi Biologics and BeiGene PD-1 are mainly affected by the epidemic, and going to sea is still just around the corner.

In July this year, the FDA re-accepted the marketing application of Junshi Biologics for the use of teripulimab for the treatment of first-line and second-line and above nasopharyngeal carcinoma, and the target review date of the Prescription Drug User Payment Act (PDUFA) was changed from April 2022 to December 23, 2022; BeiGene's US marketing application for tislelizumab for the second-line treatment of esophageal squamous cell carcinoma was originally dated July 12, 2022, but was also delayed due to the lack of on-site verification and the updated PDUFA date has not yet been determined.

In addition, on November 18, 2022, Henlius announced that it had signed a license agreement with its parent company, Fosun Pharma, granting the company an exclusive license agreement to commercialize Hans-like in the United States. Henlius is also actively promoting its PD-1 launch in the United States, with the first indication for extensive stage small cell lung cancer (ES-SCLC+). It is reported that all development work will continue to be completed by Henlius until it is approved by the BLA in the United States. Based on the results of previous discussions between Henlius and the FDA, 100 subjects will be recruited in the United States for bridging trials, and BLAs are expected to be submitted by the end of 2023.

In a clear trend, the FDA now wants to conduct global trials of U.S.-approved PD-1 drugs. Both Lilly and EQRx have reportedly said publicly that they will offer drugs at lower prices than existing PD-1 inhibitors, but that hasn't changed the fate of Tyvyt and sugemalimab failing to market in the United States.

The overseas plans of domestic competitors will undoubtedly put some pressure on Cinda. The failure to go to sea, coupled with Lilly's return of Cindilimab's overseas rights, Cinda's PD-1 monoclonal antibody road to sea is undoubtedly more difficult, and it remains to be broken.