Nicolas Pharmaceutical, the life and death bureau of innovative drug patents

In the war of innovative drugs, pharmaceutical companies with patents are like holding swords, and once the sword of patents is successfully fallen, they can kill competitors with a sword.

Therefore, once pharmaceutical companies discover that players who can pose a potential threat to themselves are rising, they often immediately strike to strangle their opponents in the cradle. It is better to kill the wrong than to let it go. In order to maximize their potential market, pharmaceutical companies have no choice.

In the latest patent war for innovative drugs, domestic players seeking to go overseas are becoming targets for overseas pharmaceutical companies. In the past year, many pharmaceutical companies such as Andao Pharmaceutical, Yifang Biologics, and Ascletis Pharmaceutical have been sniped at by patent lawsuits from overseas pharmaceutical companies.

Although the lawsuit has not yet been concluded, a fact that cannot be ignored has emerged, that is, on the road to the sea of China's innovative drugs, the patent dispute is becoming a war that more and more pharmaceutical companies cannot avoid.

In the face of increasingly harsh patent sniping by overseas pharmaceutical companies, it is time for domestic innovative drug players to plan ahead.

01 

Nicolas Pharmaceuticals sniped

The underlying logic of the patent war is based on commercial interests. For a pharmaceutical company, winning a patent war is the most effective way to beat competitors.

On December 29, Vikng took Ascletis Pharmaceutical's drug candidates ASC41 and ASC43F to court in the United States, as well as Ascletis founder Wu Jinzi and certain subsidiaries, demanding that Ascletis Pharmaceutical's rights in these two products be cancelled and that Ascletis Pharma be permanently banned from developing these two drugs.

A U.S. pharmaceutical company chose to go to court with a biotech far away in China, and in the final analysis, its purpose is only one: to grab the NASH market cake.

The potential market size of the NASH field is tens of billions. Over the past few decades, however, the field has been a graveyard for innovative drug discovery. Fortunately, after the unremitting efforts of pharmaceutical companies, hope began to appear. On December 19, 2022, the THR-β agonist resmetirom, developed by Madrigal, had positive phase III clinical trial data and was only one step away from marketing.

Another pioneer in the NASH field, Vikng's THR-β agonist VK2809 is in clinical phase II.b, and Vikng's stock price soared 73.88% on December 19, driven by positive data from resmetirom.

Back in China, the fastest progress in the NASH field is Ascletis Pharmaceuticals, whose THR-β agonist ASC41 has also entered the second phase of clinical trials, and its stock price also rose 53.47% on December 20.

You may have questions, the market size exceeds 10 billion, pharmaceutical companies always have a cake to share according to their ability, why is there a dispute now? This starts with the cooperation between Ascletis and Vikng a few years ago.

In 2016 and 2019, Ascletis twice saw the future potential of VK2809 and tried to cooperate with Vikng. To this end, Ascletis signed two confidentiality agreements with Vikng and reviewed the confidential documents of VK2809. However, both collaborations ended in failure.

Logically speaking, buying and selling is not benevolent, and there is no need to go to court.

But Vikng said that five months after Ascletis reviewed VK2809's confidential information in 2019, Dr. Wu founded Gannex to begin developing the THR-β agonist drug ASC41. More importantly, ASC41 and VK2809 have several similarities, such as both are prodrugs, both are metabolized in the liver by CYP3A4 to produce a potent TRß agonist, and so on.

In Vikng's view, all this is hardly a coincidence, Ascletis is likely to have misappropriated the drug formulation, manufacturing and storage secrets of VK2809, which allowed ASC41 to bypass years of research and development and quickly enter the clinic. Another drug, ASC4SF, was a dual-target combination based on ASC41, so it was sniped together.

However, since ASC41 has appeared in Ascletis Pharma's pipeline as early as 2019, why has Vikng started to take action to protect its rights today?

The reason is that in the past, the NASH field was a graveyard for innovative drug development, but now the successful launch of NASH drugs is imminent, and Ascletis Pharmaceutical's ASC41 is also clinically conducted in the United States. In Vikng's view, Ascletis wants to come to overseas markets to share the fruits of NASH's success. Therefore, it is natural to strike and stifle potential competition in the cradle.

Regarding Viking's allegations, Ascletis categorically denies that Viking's allegations are unfounded and will vigorously defend against such allegations.

Whether Ascletis misappropriated Vikng's trade secrets is still inconclusive, but one point worth noting behind this patent dispute is that there has been an increasing number of patent disputes between overseas pharmaceutical companies and domestic pharmaceutical companies recently.

02 

Increasing patent disputes

Just over a month ago, Yifang Biotech was also involved in patent disputes with overseas pharmaceutical companies.

In November 2022, Mirati of the United States took Yifang Biologics to court, demanding that Yifang Biologics stop the infringement and also demand compensation of 99 million yuan.

Based on the pipeline layout of Yifang Biologics and Mirati, it is not difficult to speculate that the product that caused the dispute between the two companies should be KRAS G12D inhibitors. In terms of molecular structure, Yifang's KRAS G12D inhibitor is very similar to Mirati's MRTX1133.

Also in November, FibroGen filed a lawsuit against Andao Pharmaceutical's chairman and CEO Liu Dong and the company's chief scientific officer Deng Shaojiang, accusing them of infringing FibroGen's patents.

FibroGen said that Liu Dong and Deng Shaojiang of Andao Pharmaceutical, former employees of the company, stole the company's technology for the treatment of chronic kidney disease anemia while working at the company, and then founded Andao Pharmaceutical. The patents for core technologies and related compounds adopted by ADO Pharma to develop drugs are the same as those of FibroGen.

Above, it is not difficult to see that overseas pharmaceutical companies are launching patent sniping attacks on domestic pharmaceutical companies. Although the outcome of these patent disputes is uncertain, it is a time-consuming and labor-intensive battle for any pharmaceutical company to fall into a patent dispute. If the patent lawsuit can be won, it is fine, but if it loses, it will lose money at best, and the product will be at risk of delisting.

In fact, patent disputes between domestic pharmaceutical companies and overseas pharmaceutical companies were not uncommon in the past. But at that time, most of the disputes were between domestic generic drugs and foreign original drugs.

But now, innovative drugs have become the protagonists of the domestic biopharmaceutical market and have begun to gradually embark on the road to the sea. In the process, patent issues arise. It is not difficult to imagine that in the future, the proportion of similar cross-border litigation faced by domestic innovative pharmaceutical companies will gradually increase.

The reason is simple, Chinese players entering overseas markets will inevitably affect the market share of local players. Local players will not sit still, and will naturally scrutinize and even snipe at domestic pharmaceutical companies in more detail.

Therefore, for domestic players, in the process of going to sea, drug patents are also factors that need to be laid out in advance and carefully considered.

03 

Strangle the neck of the core technology

Domestic pharmaceutical companies are constantly being sniped, sounding the alarm for the market. The patent layout of innovative drugs is also a game, and may even be a matter of life and death, and patent implementation capabilities will become one of the core competitiveness of pharmaceutical companies.

For innovative pharmaceutical companies aiming to go overseas, in addition to whether clinical data can be recognized by overseas regulatory agencies, patent issues of drugs are also a key factor affecting the success of going overseas. Once the United States determines that China's innovative drugs are infringing, then the road to the sea of drugs will also end here.

So, how can domestic pharmaceutical companies reduce the occurrence of such lawsuits? First of all, pharmaceutical companies' awareness of trade secret protection needs to be improved.

Not only domestic pharmaceutical companies, even if there are many similar patent disputes around the world, there is no uniform standard for determining whether a technology infringes on trade secrets.

Therefore, in order to reduce the occurrence of patent disputes, what pharmaceutical companies can do is not only not to infringe on others' patents, but also to enhance their awareness of the protection of trade secrets, protect their own technology patents, and apply for patent protection as soon as possible.

Second, strengthen the research and development of new technologies and new drugs to strangle the neck of core technologies.

In the end, the core of the patent war is the battle of technology. In the past, the method of fine-tuning the drug structure based on innovative drugs developed by overseas pharmaceutical companies may still work in China, but it is likely to be unsustainable overseas.

The reason is that overseas pharmaceutical companies have a broad patent layout, and even if they change the drug structure, they may still fall within the scope of patents laid out by pharmaceutical companies in advance. Even if this is not considered, it is difficult for improved innovative drugs to benefit overseas from many aspects such as clinical value, development cost and return.

In the future, if you want to reduce the probability of getting involved in the patent war and increase the winning surface in the patent war, the best way is to make real innovative technologies and products, and then lay out patents in the first time.

Only by grasping the initiative in the underlying technology and patents can China's innovative pharmaceutical companies go further and more steadily on the road to the sea.

In the final analysis, the essence of patent disputes surrounding innovative drugs is a game between innovative drugs, technology and commercial returns. This means that there will be no end to the patent war, and all victories will be a short truce.

For domestic innovative drug players, it is also time to further land the patent layout and turn it into a practical tactic to deal with the possible patent war.