In recent years, thanks to the reform of drug administration, the innovation ability of biomedical enterprises in China has been continuously enhanced, and the innovation achievements have been continuously brought to the ground, which has also caused the investment and financing in the biomedical field to heat up rapidly. Especially after the outbreak of COVID-19 in 22, biomedicine has become the hottest industry in the world. However, since the second half of 221, the capital market has changed suddenly, and the biomedical sector has started to fluctuate downward. In 222, under the influence of multiple uncertainties, the biomedical investment and financing market has cooled significantly, and many innovative enterprises have begun to adjust and prepare for the winter.
has the medium-and long-term investment logic of biomedicine changed under the trend of accelerating population aging? Has biomedical investment peaked in the short term? What are the main reasons behind investors becoming rational? Which sub-tracks are still worthy of attention? A series of problems have become the focus of the layout.
In this regard, Xu Yaochang, chairman and president of Heyu Medicine, pointed out in an interview with 21st century business herald that biomedicine is a risky industry by its own attributes, and the layout logic of the biomedical market has not changed. In the face of the current biomedical market dilemma, it is very important to get out of the road of differentiation.
the primary market pursues long-term investment, which does not mean that investment this year will pay off next year, and the creation of new drugs must have a long process. The secondary market is profit-seeking, and if the overall situation is not good, it will be a challenge to Biotech. I don't have a standard answer, but I'm not worried. We are really making innovative drugs to solve the unmet clinical needs. As long as we continue to push forward the project, improve the R&D capability and overall enterprise strength, I think it will be recognized by the market. And the overall environment will eventually pick up one day, and the sun is always new. Xu Yaochang said that in such a voluminous environment, any enterprise that wants to make innovative drugs must have its own independent opinions. It is necessary to take patients as the center, pay attention to the unmet clinical needs, avoid homogenization competition, and fully explore the clinical value of innovative drug development.
R&D, commercialization and capital are constrained
As innovative drugs continue to be hot, more and more enterprises enter the innovative drug industry track, and the problem of intensified competition in the industry is inevitable, and the industry chaos with clustered targets, crowded track and serious involution appears. After a wave of rapid development, the development of innovative medicine industry in China has encountered a bottleneck period. The White Paper on the Development of Innovative Pharmaceutical Companies in China in 222 issued by KPMG points out that innovative pharmaceutical companies in China are currently under pressure from R&D, commercialization and capital.
according to the published investment and financing data of the medical Rubik's cube database, the investment and financing trend in the medical and health field slowed down in the first half of 222. In the first half of 222, there were 632 investment and financing events in the medical and health field nationwide, and the amount of investment and financing disclosed was 115.2 billion yuan. Among them, there were 583 investment and financing events in the primary market, with an investment and financing amount of 67.1 billion yuan; 3 IPO events, raising 35.7 billion yuan; There were 19 refinancing events in the secondary market, with a refinancing amount of 12.4 billion yuan. Overall, in the first half of 222, the number of investment and financing events in the primary market decreased by 46.7% year-on-year and 45.9% quarter-on-quarter; The number of IPO events decreased by 45.5% year-on-year and 55.2% quarter-on-quarter; The number of refinancing events in the secondary market decreased by 57.8% year-on-year and 29.6% quarter-on-quarter.
in terms of research and development, the whole R&D ecosystem composed of enterprises, R&D institutions/schools and the government in China is not yet mature, and there is still much room for improvement in capital investment, research foundation and policy support for innovative drug research and development. At the same time, compared with generic drugs, innovative drug research and development has its own long-term and high-cost problems, which makes new drug research and development enterprises face dual pressures from themselves and the outside world.
Xu Yaochang pointed out that compared with foreign countries, China's current integration with Industry-University-Research is not enough. In recent years, with the country's emphasis on the research and development of new drugs, basic research and source innovation have been mentioned more and more. In fact, we don't lack some key technologies, and there are research foundations, but we still need to improve the transformation of Industry-University-Research. There is a certain disconnect between the education of pharmaceutical universities in China and the actual development of innovative drugs. Innovative drugs are completely new targets. Universities start research after discovering new targets, but the commercialization of research results is done by enterprises. If the domestic basic research and the cooperation of pharmaceutical companies cannot keep up, it will affect the research and development of new drugs in China.
at the same time, according to KPMG white paper data, from the time point of view, it often takes 3-6 years for a new drug to screen the compound and determine the final developed compound through preclinical research. Then, the drugs are subjected to phase I, phase II and phase III clinical trials, which always takes 6-7 years. If the clinical research results are good, the approval process often takes .5-2 years to apply for listing. The average cycle of an innovative drug is usually 8-1 years from the establishment of a new drug to its final listing.
From the perspective of R&D investment, the clinical research stage is the stage that consumes the most money in the R&D cycle of innovative drugs. Taking the research and development of innovative drugs in cancer field as an example, according to relevant data, the average cost of research and development from phase I to phase III clinical trials is as high as $2.6 billion. In recent years, the average research and development cost of innovative drugs has a very significant upward trend. In the current environment of innovative drug research and development, the investment in innovative drug research and development is undoubtedly huge.
after determining the research and development project, our research and development team will continue to optimize and test a series of characteristics such as activity and selectivity of the target. If the IND is successfully approved, it will take three or four years and tens of millions of investments. Xu Yaochang said.
not only in research and development, but also in the commercialization of innovative drugs. The pressure of commercialization is embodied in the following aspects: first, the coverage capacity of primary medical institutions is insufficient, which makes it difficult for innovative drugs to enter the primary level for many reasons; Second, the tightening of medical insurance fund control fees and the difficulty of long-term hospitalization have blocked the main market access channels of innovative drugs; Third, based on the consideration of commercial survival and development, enterprises focus on drug research and development targets, product homogeneity is serious, and commercial competition is intensified.
In addition, in order to further strictly regulate enterprise innovation, China's pharmaceutical policy requires higher requirements, and the market attitude of enterprises that rely on licensein for IPO has also changed. The value expectation of capital for innovative pharmaceutical companies has decreased, and the secondary and primary markets of the pharmaceutical industry have cooled down one after another, making it more difficult for innovative pharmaceutical companies to raise funds and their survival under pressure.
can going out to sea meet the challenges of China market?
due to the price and product involution, many enterprises choose to develop their living space by going to sea internationally. However, according to GBI survey, even if everything is ready, innovative drugs will inevitably encounter twists and turns on the long journey to sea. In December, 221, the application for listing of Punabulin in the United States was frustrated. The FDA pointed out that the registration test results provided by Punabulin were not enough to prove its benefits, and additional controlled trials were needed to provide substantial evidence to support CIN indications. On the day of the announcement, due to this incident, the US stock price of Wanchun Pharmaceutical plummeted by 61%.
The White Paper of China Pharmaceutical Companies Going to Sea points out that going to sea means entering global competition, and technical barriers are the first to bear the brunt. Product competition cannot be mentioned in the same breath as domestic competition, and it needs to have absolute advantages. Drug test data have been strictly certified and approved by FDA and other authoritative organizations, which is a prerequisite for enterprises to go to sea. As an international authority that holds the power of life and death of drugs on the American market, the clinical data of drugs, that is, effectiveness, safety and absolute advantages compared with existing drugs, are important evaluation points for FDA in approving new drugs. Therefore, trying to enter the American market by the way of edge ball with price advantage may have little chance of winning. This is because the drug price system and drug clinical data in the United States are two independent management systems.
At the same time, new challenges such as capital, speed and talents are coming one after another. In the contest with the capital market, the World Bank has issued a report to promote China's innovation-best international practice and put forward nine specific suggestions, the main points of which include: strengthening basic scientific research and investment. NIH and NSF in the United States are responsible for 6% of the annual funding for basic scientific research. Compared with 217, 17% of RD investment in OECD countries was in basic scientific research, while less than 5% in China. In the report "Ten-year Prospect of Pharmaceutical Innovation in China", it was proposed that in the next ten years, the power of capital should be gradually tilted to the early stage of R&D and achievement transformation, and the investment ideas should be upgraded from a more professional, earlier and more rational perspective.
going out to sea is a race against time, and speed is one of the key elements. The White Paper of China Pharmaceutical Companies Going to Sea points out that the first drug listed in the world can win 64% market share, followed by 25% on the premise of little difference in efficacy. After the third place, the entrants can get little share of the global market unless they get a breakthrough advantage.
In terms of talents, the White Paper of China Pharmaceutical Companies Going to Sea pointed out that one of the reasons why China's medicine has developed rapidly in recent years is that China has made remarkable success in cultivating and introducing high-end biomedical talents, and some talents have emerged that can lead breakthrough innovation, although the number has not yet formed a scale. Going to sea is a big test of the multi-dimensional comprehensive strength of local pharmaceutical companies in research and development technology, clinical experience and layout, transnational cooperation and negotiation, communication with international regulatory authorities, international resources, global market strategic layout and financial resources. Compound innovative high-end talents with global vision are the key to steer and sail.
Xu Yaochang has his own understanding of the fact that local innovative pharmaceutical companies have been frustrated repeatedly when going to sea. In view of the fact that many local pharmaceutical companies have suffered setbacks in the US FDA, Xu Yaochang believes that it is not only the factors of drug standards, but also the market environment. According to the previous standards, domestic enterprises have carried out clinical trials in China and achieved curative effects. In the United States, there is no difference between China and the United States, so there is no need to carry out the same trial in the American population. Now, it will take 3-5 years for the FDA to let China enterprises carry out Phase III trials in the American population again, and it will cost a lot of money. In 3-5 years, many similar drugs in the United States have been approved. This is a new challenge for domestic enterprises. Similarly, if the road to the United States doesn't work, we can consider Europe, Japan and Southeast Asian countries going to sea. These markets are also very broad and friendly, so we need to open our minds and horizons.
Insist on a differentiated road
For innovative pharmaceutical companies, it has to be said that the breakthrough of innovative drugs needs to be patient-centered, pay attention to patients' quality of life and expectations for disease treatment, and emphasize patients' needs throughout the whole process of drug research and development from a holistic perspective; At the same time, we should be guided by clinical value, pay attention to the unmet clinical needs, avoid homogenization competition, and fully explore the clinical value of innovative drug development. Differentiate the layout by laying out new targets, iterating on R&D technology, and changing development strategies, and at the same time, differentiate the marketing by tapping the individual needs of patients and doctors.
With the intensification of competition and rising costs, it has become more and more difficult to obtain foreign projects through' buy buy Buy' in the past. For domestic enterprises,' buy buy Buy' is not a long-term solution. Insisting on independent innovation is the only way. Xu Yaochang also believes that in such a voluminous environment, any enterprise that wants to make innovative drugs must have its own independent opinions.
the target is not afraid of competition, but it is exactly the same as others. If there are dozens of the same drugs, re-homogenization competition not only wastes resources, but also has limited market space when it is approved for listing. CDE has come up with a firm policy to encourage high-level and differentiated innovation, which puts higher demands on us. Xu Yaochang said that even with the same target, there must be innovation. However, don't be afraid, innovation is everywhere. For example, if intravenous injection can be developed into oral medicine, the convenience of medication can also be improved for patients. For example, PD-1 used to be injected intravenously, but now subcutaneous injection is popular, which is innovation. Subcutaneous injection can be done at home by yourself, but intravenous injection must be done by a doctor. From injection to oral administration is also an innovation, and oral administration is relatively more convenient. Therefore, innovation is not necessarily in the project, but also in the treatment methods.
In addition, pharmaceutical companies need to comprehensively consider the drug-forming, innovative and China market demand when considering innovation. For example, when choosing a target, we must consider the innovation of the target. The new target, I don't know whether it can be made into medicine at first, but once it is made, it is the first one. Some targets gradually mature, for example, the medicinal properties can reach 3% and 4%. Maybe pharmaceutical companies are the first to go in, or they may not be the first to go in. Here is a balance.
It is more important to understand the market in China and the needs of patients in China. For example, ABSK21, we know that this compound can treat giant cell tumor of tendon sheath, because its mechanism can be clearly explained, so after the compound comes out, it will develop indications, giant cell tumor of tendon sheath is one of the indications, and there are other tumors. Later, we found that there are no related drugs in the domestic market, and there is no standard treatment except surgery, so there is a clinical demand in China. Xu Yaochang said that once the target is determined and the indications pursued are clear, a lot of investment is needed.
Xu Yaochang is confident about the future of innovative drugs in China. He believes that innovative drugs in China have just entered the harvest period. For innovative pharmaceutical companies, it is necessary to truly innovate independently and truly achieve the Firstinclass. The primary and secondary markets will have confidence and cannot be identical. Even with the same target, there must be innovation.
At the same time, the layout of pharmaceutical companies in China also maintains a sense of urgency in the research and development of new drugs, and the research and development of an innovative drug means long-term investment. Ten years is a marathon. During this marathon, we can't relax one step. If we relax one step, maybe this project will fall behind, and if we fall behind, there may be no chance. Xu Yaochang said that in terms of team quality, scientists in China should have feelings and do things that are urgently needed by society.
if we can make new drugs one by one, two by three, the advantages of new drugs will be recognized by the secondary market. Xu Yaochang said that the original intention was to solve the unmet clinical needs. Therefore, with the advancement of pipeline research and development and the improvement of commercialization ability, the company's valuation will inevitably increase. As long as the medicine is made in a down-to-earth manner, with the stabilization of the entire biomedical situation, the lost valuation will also come back.