2022 License-out inventory: 44 cross-border transactions, with a single maximum amount of nearly US$10 billion; New projects, new technologies...

With China's accession to ICH, China's drug regulatory system has truly integrated into the regulatory system recognized by the international community; It has effectively promoted China's drug innovation and R&D to enter the international market. With the increasing number of innovative drug licenses in China, innovation has gone abroad, and cooperation with multinational large pharmaceutical companies has been more and more recognized and concerned.

According to the "2021 China Pharmaceutical BD Transaction Annual Report" released by Meibai Medical Health, the number of cross-border license-out transactions of Chinese pharmaceutical companies reached 41 in 2021, of which the highest single transaction amount reached US$2.9 billion. From the perspective of the R&D stage of transaction projects, the proportion of listed products in 2021 is the largest (30%).

The 2022 innovative drug license-out continues to heat up and hit a record high. Compared with 2021, according to incomplete statistics, as of December 22, 2022, Chinese pharmaceutical companies have reached at least 44 cross-border license-out transactions, of which the highest single transaction amount is nearly 10 billion US dollars, which is the cooperation agreement reached between Kelun Pharmaceutical and Merck to cooperate in the development of seven preclinical antibody conjugate (ADC) drugs for the treatment of cancer. Upon the effective date of the cooperation agreement, Colombertai will receive a one-time non-refundable down payment of US$175 million, with milestone payments not exceeding US$9.3 billion in aggregate.

More than half (30) of these deals revolve around tumors (including chemoradiotherapy-induced neutropenia) and autoimmune diseases, with deals consisting mainly monoclonal antibodies, dual antibodies, antibody drug conjugates (ADCs) and CAR-T therapies, and seven deals totaling more than $1 billion.

From the perspective of the type of transferor enterprise, pharma and biopharma enterprises are the majority. From the perspective of R&D stage, in addition to the technology platform, the transaction projects involve 12 marketed products, 2 reported drugs (F-627 and liraglutide injection), 4 Phase 3 clinical drugs, 1 phase 2 clinical drug, 9 phase 1 clinical drugs and more than 10 preclinical drugs.

01

Q2 is prominent, with license-out accounting for 50%

A number of pharmaceutical companies 2+ new projects went overseas

From the perspective of the transaction completion date, the cross-border license-out transactions of Chinese pharmaceutical companies in 2022 are mainly concentrated in the first and second quarters, especially in the second quarter. Among them, the number of transactions reached in the first two quarters was as high as 28, accounting for more than 50% of the year.

From the perspective of the transferor, Yifan Pharmaceutical, Biocytogen, Henlius, Reindeer Biologics, Kelun Pharmaceutical and other companies have reached more than 2 cross-border license-out transactions (see the table below for details), of which only the authorized projects of Luye Pharmaceutical and Henlius have been approved for marketing.

Summary of companies that have reached at least 2 cross-border license-out transactions in 2022

Among them, Yifan Pharma only reached 5 licensing transactions with 4 pharmaceutical companies with F-627 (Eberglastine α injection).

F-627, ibegastim α injection, is an innovative biopharmaceutical product developed based on the company's Di-KineTM bimolecular technology platform, which is a rhG-CSF dimer expressed by CHO cells based on Fc fusion protein technology, with long-acting and potent biological characteristics.

At present, F-627 has been submitted for marketing applications at home and abroad for the prevention and treatment of neutropenia caused by chemotherapy in tumor patients.

Henlius has licensed its overseas interests in four biosimilars with four pharmaceutical companies.

Biocytogen entered into three license-out deals, in which Biocytogen exclusively licenses to Syncromune the global rights of intratumoral immunotherapy consisting of OX40 monoclonal antibody YH002 and other active ingredients for Syncrovax™ therapy.

In addition, Biocytogen signed an antibody drug molecular evaluation and licensing agreement with Merck and ADC Therapeutics SA, and Biocytogen will provide the transferee company with antibody drugs generated by Biocytoto's "Thousand Mouse Antibodies" project and selected targets by the transferee company.

Kelun Pharmaceutical's three overseas records have reached a license with Merck to reach cooperation, and the cooperation projects are all ADC drugs, with a cumulative transaction amount of nearly 120 trillion US dollars. In addition, four companies, Bo Pharmaceutical, Jimin Trust and Luye Pharmaceutical, each reached 2 license-out transactions in 2022.

The deal with AstraZeneca revolves around its CLDN18.2xCD3-targeted bispecific antibody HBM7022, while the deal with Moderna revolves around the company's proprietary fully humanized heavy chain antibody platform, HCAb. In addition, Harmony Pharma has licensed Moderna a set of exclusive sublicensable licenses for multiple target sequences developed by the HCAb platform for gene therapy research and development.

The two deals reached by Jimin Trust are around its self-developed early-stage innovative drug project, licensing the global rights of the oral androgen receptor (AR) degrader JMKX002992 to Genentech, a subsidiary of Roche, and licensing the overseas rights of the new non-opioid analgesic drug JMKX000623 to ORION.

Unlike other companies, Reindeer Bio does not license specific products, but clinically validated fully human CD19 sequences and fully human BCMA CAR structures.

02

Sanofi, Merck, etc

A number of multinational pharmaceutical companies have introduced new drugs/technologies

From the perspective of transferees, in 2022, a number of multinational pharmaceutical companies will introduce new projects from domestic pharmaceutical companies, of which Merck will introduce 3 projects; Sanofi and Merck reached two licensing deals. Gilead's licensing project Trodelvy, which was introduced by Genting New Yao from Immunomedics (acquired by Gilead in 2020) in April 2019, is the return of Trodelvy's®® Asian interests to Gilead.

In 2022, domestic pharmaceutical companies and multinational pharmaceutical companies reached an agreement

License-out transaction summary

From the perspective of transaction projects, multinational pharmaceutical companies attach great importance to the research and development of new drugs, in addition to directly introducing new drugs, they also introduce technology platforms from other companies to accelerate the research and development of new drugs.

In particular, Sanofi reached a research cooperation and exclusive technology licensing agreement with Tianyan Pharmaceutical on March 2 to provide a new generation of single- and bispecific monoclonal and bispecific antibodies with precision-masked safe antibodies provided during the development period of Tianyan Pharmaceutical's unique safe antibody SAFEbody® technology.

On November 8, Sanofi and Insilico entered into a multi-year strategic research collaboration for multiple targets, leveraging Insilico's AI-driven Pharma.AI drug discovery platform to advance drug candidate development based on no more than six innovative targets. Both deals are very high, both at more than $1 billion, and the two companies they work with, Tianyan Pharmaceuticals and Insilico, are AI-driven biotechnology companies.

From these transactions, it can be seen that ADC research and development is very hot, and 5 of these transactions revolve around ADCs.

03

Seven deals exceeded $1 billion

Kelon sets a new record for innovative drugs going overseas

In terms of transaction value, a total of 7 license-out transactions exceeded US$1 billion in 2022, of which seven different preclinical ADC candidate projects under development reached cooperation between Kelun Pharmaceutics' subsidiary Kelun Patex and Merck Sharp & Dohme are expected to receive a total of no more than US$9.3 billion in milestone payments from Merck; Following the total amount of Akeso's evocitumab overseas transaction amounting to 5 billion US dollars, another transaction project that refreshed the overseas record of China's innovative drugs.

It is worth noting that prior to this cooperation, Colombert had announced in 2022 that it had entered into a licensing cooperation agreement with Merck for two ADC drugs, with milestone payments not exceeding US$2.264 billion. It is worth mentioning that only one Trop2-targeted ADC has been approved worldwide, and no drug with Claudin 18.2 targeting has been approved for marketing. The two deals between Kelun Pharmaceuticals and Merck are relatively high, with a total amount of more than $2.2 billion.

On May 13, Colonbot licensed its biomacromolecular tumor project A with independent intellectual property rights to MSD for commercial development outside China (China includes Chinese mainland, Hong Kong, Macau and Taiwan). Under the agreement, Colombert will receive an upfront payment of $30 million and milestones up to $1.363 billion in aggregate.

Project A is SKB-264, an ADC product targeting TROP2 for innovative drugs targeting TROP2 with independent intellectual property rights. For the treatment of locally advanced or metastatic triple-negative breast cancer (TNBC), it was included in the list of "breakthrough therapy varieties" by the Center for Drug Evaluation (CDE) of the National Medical Products Administration on July 7, 2022.

On July 26, KelunBotai licensed its clinical early-stage biomacromolecular tumor project B with independent intellectual property rights to Merck for research, development, manufacturing and commercialization worldwide. Under the agreement, Colombert will receive an upfront payment of $35 million and a milestone payment of up to $901 million.

In 2022, the total transaction value exceeded $1 billion in license-out transactions

The total value of the deal between Tianyan Pharmaceutical and Sanofi reached US$2.5 billion, ranking third. Kelun Pharmaceutical's TROP2-targeted ADC therapy SKB-264 ranked fourth in overseas transactions. Insilico's deal with Sanofi ranked fourth. The Claudin 18.2 targeted ADC outbound transactions of CSPC and Lixin Pharmaceutical ranked fifth and sixth respectively. It can be seen again that ADC drugs are bound to be a hot spot for transactions in 2022, and they are also areas where innovative drug research and development are optimistic; The ADC targets are mainly concentrated in Claudin 18.2 and TROP2.

04

brief summary

Overall, in 2022, China's pharmaceutical companies' new drugs/technologies will enter an explosive period, both in terms of quantity and transaction amount. The license-out transaction shows that the R&D strength of Chinese pharmaceutical companies has been internationally recognized, and it has accelerated the process of listing new Chinese drugs abroad. In addition, the funds obtained from the authorization will also provide more support for the development of pharmaceutical companies and further improve the research and development strength of pharmaceutical companies in China.