The revelation of the $6 billion deal, what are the explosive opportunities behind this gold mine?

Under the terms of the agreement, Takeda will advance $4 billion to Nimbus, and after annual net sales of $4 billion and $5 billion, it will make $1 billion milestone payments, respectively, for a total of up to $6 billion. The transaction is expected to close in the first half of 2023.

What is so special about this drug that Takeda won at such a high price?

NDI-034858 is mainly used for the treatment of patients with moderate to severe plaque psoriasis (commonly known as psoriasis). On November 30, its phase IIb study also achieved positive results, meeting the primary efficacy endpoint.

There is currently no cure for psoriasis, and the disease has a significant impact on the appearance of patients and requires long-term medication to relieve. Domestic treatment methods are mainly small molecule treatment regimens, and the therapeutic effect is far from that of biological drugs. According to data, the domestic psoriasis stock exceeds 3.9 million, there is a huge unmet demand for treatment, and the drug market size is close to 70 billion.

Globally, a large number of blockbusters have also been born in the field of psoriasis, including: Gusecchilumab, sekuchimumab, ustekinumab, adalimumab and so on. It is worth noting that the first approved BMS TYK2 monoclonal antibody defeated the blockbuster drug of psoriasis in its clinical phase III, which triggered enthusiastic attention from the academic community to the target.

Even though the oncology field has a vast market, it should not be overlooked that the field of self-immunity is also a sparkling gold mine.

1. Domestic innovative pharmaceutical companies' self-exempt molecular transactions are gradually increasing

According to the statistics of the American Association of Autoimmune-related Diseases (AARDA), more than 100 autoimmune diseases have been found, common are rheumatoid arthritis, ankylosing spondylitis, psoriasis, Crohn's disease, ulcerative colitis, systemic lupus erythematosus, lupus nephritis, bronchial asthma, etc.

Most autoimmune diseases are difficult to cure, and once sick, most patients need long-term or even lifelong medication, which is one of the secrets of adalimumab's long-term "drug king". Moreover, some diseases (such as lupus nephritis) are dangerous, seriously affecting the quality of life of patients and threatening their life safety. Autoimmune diseases have become the third most chronic disease after cardiovascular disease and cancer.

The other side is that domestic pharmaceutical companies will exempt themselves from early molecule license out to overseas manufacturers more and more.

In March 2021, Hesco awarded a preclinical TYK2 inhibitor to Foresite Capital for an upfront payment of $60 million and a milestone of up to $120 million.

In September 2022, Simcere Pharmaceutical awarded the overseas rights to a preclinical IL-2 fusion protein to European pharmaceutical company Almirall, with a total milestone of US$492 million

2. The difference in the size of the self-exempt drug market between China and the United States

In 2020, the total sales scale of the top 100 drugs in global sales was about 355.8 billion US dollars, and autoimmune and inflammatory drugs ranked second (about 94 billion US dollars, accounting for 26.4%), and in the past, adalimumab (TNF-α), ustekinumab (IL12/23), and etanercept (TNF-α) were born with annual sales of more than 5 billion US dollars.

According to 2019 data, the US self-free drug market is $74.9 billion, China is $2.4 billion, and the size of the Chinese market is only 3% of the United States.

The clinical incidence of autoimmune diseases is high, the clinical manifestations are complex, and it is easy to misdiagnose and miss. In terms of the number of patients, the number of patients with self-immune diseases in the United States accounts for about 20% of the total population (about 50 million people); Incomplete statistics show that there are about 50-60 million patients with autoimmune diseases in China, but the actual number of domestic patients may be much more than this number.

According to the data of YaoRong Cloud, in the first half of 2022, the top 5 treatment categories in hospitals were anti-tumor drugs and immune function modulators, digestive system and metabolic drugs, blood and hematopoietic system drugs, systemic anti-infective drugs, cardiovascular system drugs, and autoimmune disease drugs ranked in the top five or even outside the top ten.

Whether it is a relatively narrow market size or the unfavorable sales of adalimumab, China was once considered by the industry to be a "black hole of self-exempt drugs" market.

What causes such a dilemma?

There are at least two reasons for this: the lack of resources in rheumatology and immunology and the high price of drugs.

According to Zhongtai Securities Research Report, the domestic rheumatology and immunology department started late, and only began to be established in the 80s of the 20th century, with different scales, many affiliated with other departments, such as hematology and rheumatology, nephrology and rheumatology, etc., and a considerable number of rheumatologists are on hold positions in other departments. There are not enough rheumatology immunologists, resulting in a large number of rheumatic patients being missed and misdiagnosed.

On the contrary, the diagnosis and treatment of self-exempted patients in Europe and the United States are more standardized, with clear clinical paths and guidelines, and the proportion of missed and misdiagnosed patients is lower.

Adalimumab was approved for marketing in China in 2010, but it has been pressed by Sunshine National Construction Yisaipu with its price advantage, and it was not included in medical insurance until 2019.

According to medical geographical statistics, the sales data of adalimumab in the PDB sample hospital market showed explosive growth in 2020 and 2021. The reason behind this is that adalimumab has reduced its price by 83% into medical insurance, and 3 biosimilars have entered the market, which has contributed to the skyrocketing sales volume.

From the following figure, most of the newly approved self-exempt drugs in recent years are expensive, and they still bring a lot of burden to patients because they need to be used for a long time or even for life.

3. Domestic potential blockbuster items

● Akeso AK-101: a monoclonal antibody targeting IL-12/IL-23, mainly under research for psoriasis and ulcerative colitis, and the fastest progressing indication is moderate to severe psoriasis.

AK-101 is the same target as Johnson & Johnson's ustekinumab, which was approved in 2009 and had global sales of $6.4 billion in 2019, making it the third best-selling drug for autoimmune diseases in 2019. From the experimental data currently available to Akeso, AK101 shows the potential to be more effective than Stelara.

AK-101 is also the only monoclonal antibody drug targeting IL-12/IL-23 in the clinical stage, with great potential.

● Conoya CM310: CM310 is the first domestic and the world's second IL-4Rα monoclonal antibody, and phase II clinical data for the treatment of AD and sinusitis with nasal polyps have been announced, with good safety and efficacy that has the potential to be better than dupilumab.

Sanofi's dupilumab has successfully verified the market space and amplification curve of IL-4Rα targets in type 2 allergic diseases, with sales revenues of 200 million, 900 million, 2.3 billion and 4 billion US dollars from 2017 to 2020, respectively. It was approved in China in June 2020 and sold $13.7 million in China that year.

In March 2021, Conoya granted the right to develop and commercialize CM310 for respiratory diseases in China, excluding Hong Kong, Macao and Taiwan.

● Remegen Taitacept: Tatacept is one of the few innovative drugs approved for the indication of systemic lupus erythematosus after belimumab, which was approved in China in March 2021 with sales of 47.3 million yuan that year.

In addition to systemic lupus erythematosus (SLE), Remegen is conducting clinical trials for 6 other refractory autoimmune diseases that have not fully met clinical needs, including IgA nephritis, myasthenia gravis, rheumatoid arthritis, Sjogren's syndrome, etc.

At present, Tatanercept is conducting phase III clinical trials of SLE and IgA nephritis overseas, and has recently obtained orphan drug qualification granted by the FDA for myasthenia gravis.

Conclusion: With the frequent license outs of domestic pharmaceutical companies and the increasingly intensive news of accelerated commercialization progress, the spring of head innovative pharmaceutical companies seems to be getting closer and closer.