Striving for Recovery? Innovent Biologics's Turnaround in Sight?

In recent times, Innovent Biologics has been making headlines with a series of positive developments, raising hopes for a potential turnaround. With four significant achievements in February alone, the company seems to be blossoming amidst challenging circumstances. This article delves into the recent accomplishments and their implications for Innovent Biologics's future.

Innovent Biologics's positive news unfolded rapidly throughout February, bringing a glimmer of hope for the company. On February 22nd, the PD-1 inhibitor, Dabosu® (sintilimab injection), received official approval from the China Macau Food and Drug Administration (ISAF) for market launch. Additionally, on February 21st, Innovent Biologics entered into a clinical research and supply agreement with ImmVirX Pty Limited for a joint study on the combination therapy of Dabosu® (PD-1 inhibitor, marketed as sintilimab) and oncolytic virus candidate IVX037. The agreement aimed to explore the synergistic effect of these treatments. Furthermore, on February 20th, the phase III clinical study on recombinant anti-insulin-like growth factor 1 receptor (IGF-1R) antibody injection (IBI311) achieved its primary endpoint in subjects with thyroid eye disease (TED) in China. Finally, on February 7th, the GLP-1R/GCGR dual agonist, Masheduopeptide, gained acceptance for market listing after receiving approval from the Center for Drug Evaluation (CDE).

Despite being caught in the wave of China's first PD-1 boom and transitioning from biotech to biopharmaceuticals within a decade of its establishment, Innovent Biologics has been grappling with persistent losses. However, these recent milestones could serve as a pivotal turning point in reshaping the company's fortunes. As the flagship product of Innovent Biologics, Dabosu® has experienced a slowdown in growth and even a decline in sales in recent years, adding pressure to the company's financial performance. In 2020, Dabosu® sales increased from CNY 1.015 billion to CNY 2.49 billion, making it the second-highest-selling domestic PD-1 inhibitor, just behind Carrelizumab from Henlius. However, with the inclusion of three other PD-1 inhibitors in the national medical insurance coverage in 2020, Dabosu®'s competitive advantage gradually diminished. Furthermore, the entry of second-tier PD-1 inhibitors intensified the competition. Consequently, in 2022, Dabosu® faced its first sales decline after market listing, with revenues plunging to CNY 2.029 billion, a significant drop of over 30% compared to 2021.

To mitigate the impact on sales, Innovent Biologics aimed to expand the overseas market for Dabosu®, particularly targeting North America and Europe. However, these plans were thwarted in March 2022 when the U.S. Food and Drug Administration (FDA) rejected the application for Dabosu®'s market approval. This setback cast a shadow over its growth prospects. Nevertheless, the recent entry into the Macau market represents a new breakthrough for Dabosu® beyond the mainland Chinese market. Currently, Innovent Biologics remains focused on exploring new indications for Dabosu®. In December 2023, the seventh new indication, non-small cell lung cancer treatment failure after EGFR-TKI therapy, was included in the 2023 National Health Insurance Drug List. In the first three quarters of 2023, Innovent Biologics's total product revenue reached approximately CNY 4.1 billion, with Dabosu® generating sales revenue of USD 280 million (approximately CNY 1.967 billion), representing a 19% year-on-year growth. However, in the fiercely competitive PD-1 market, Dabosu®'s competitive position is not particularly outstanding.

The collaboration with ImmVirX signifies Innovent Biologics's exploration of the combination therapy of PD-1 inhibitors and oncolytic viruses. Both Dabosu® and oncolytic virus IVX037 complement each other in activating the immune system against tumor cells. Compared to single-agent checkpoint inhibitors, the combination therapy is expected to provide stronger anticancer activity and immune stimulation, potentially yielding additional responses in cancer types prone to developing resistance. ImmVirX is currently conducting phase Ib clinical research on IVX037 in Australia (NCT05427487). The clinical study plan is set to commence in mid-2024 in Australia. According to the collaboration agreement, Innovent Biologics will provide Dabosu® injection for this multicenter clinical trial. In the crowded PD-1 landscape, Innovent Biologics will undoubtedly continue to explore the untapped potential of Dabosu®.

Innovent Biologics's recent breakthroughs have sparked optimism for a potential turnaround. With the approval of Dabosu® and strategic collaborations, the company is positioning itself for growth and innovation in the competitive PD-1 market. While challenges remain, Innovent Biologics's recent achievements suggest a promising future lies ahead.