Industry Insights | Moment of Pause — Reviewing the Pharmaceutical Industry in 2022 (Part 1)

In recent years, China has introduced a series of policies to continuously promote the innovation and transformation of the pharmaceutical industry, providing a broader development space for the development of innovative drugs. Overall, the research and development of innovative drugs in China has maintained a steady pace. Judging from the results of innovative drug reviews, 2022 was also a fruitful year.

2021 was a year of a surge in the number of new drug launches, reaching 83 products. In 2022, it seems that the trend has returned to the normal level. In 2022, the National Medical Products Administration (NMPA) approved a total of 49 new drugs, including 19 domestic new drugs and 30 imported new drugs. In terms of drug type, new molecular entities accounted for about 55% of the total number of approved drugs, with chemical drugs still making up the main proportion of approved drugs.

Source: NMPA, analysis by Frost & Sullivan

According to statistics, in 2022, the National Medical Products Administration (NMPA) approved a total of 14 new drugs of Class 1 (excluding traditional Chinese medicine and vaccines). Among these 14 approved new drugs, 10 are under priority review and 4 have been recognized as breakthrough products by the CDE. In terms of molecular type, in 2022, innovative drugs launched domestically were mainly new molecular entities, totaling 9, accounting for 64% of the total number of products. Antibody drugs accounted for 5, making up 36%. In terms of therapeutic areas, oncology far exceeded other fields, accounting for approximately 43%.

Source: NMPA, analysis by Frost & Sullivan

• On January 25, 2022, the anti-Oncotargeted monoclonal antibody omuctinib from North China Pharmaceutical Group Co., Ltd.The first domestically approved and marketed monoclonal antibody against rabies virusIt is used for passive immunization of adult rabies virus exposed individuals. Rabies monoclonal antibody, as a new type of passive immunization preparation, can achieve large-scale production and quality standardization without the risk of blood source contamination, becoming a new development direction for passive immunization preparations.

• On June 29, 2022, ravelumab tablets independently developed by Hengrui Medicine passed the priority review process and were conditionally approved by the National Medical Products Administration (NMPA) for marketing.The first domestically developed novel androgen receptor (AR) inhibitor approved in our countryCompetitive inhibitors of androgen bind to AR, thereby inhibiting AR nuclear translocation and DNA binding, reducing AR-mediated gene transcription. They are used to treat patients with high tumor burden metastatic hormone-sensitive prostate cancer (mHSPC).

• On June 29, 2022, the monoclonal antibody cabduraineimab from Kangfang Biology isChina's first approved bispecific antibody, and also the world's first marketed PD-1/CTLA-4 bispecific antibodyFor the treatment of recurrent or metastatic cervical cancer patients who have failed previous platinum-containing chemotherapy (R/M CC).

• On October 12, 2022, Hualing Medicine's dulaglutide tablets were approved for marketing by the National Medical Products Administration (NMPA).It is the world's first approved glucose kinase activator (GKA) drug.Used to improve blood glucose control in adults with type 2 diabetes.

• On November 3, 2022, Luye Pharma's Tolterodine Hydrochloride Sustained-Release Tablets were approved for marketing by the National Medical Products Administration (NMPA), which isChina's first domestically developed and proprietary intellectual property (IP)-owned innovative chemical drug for the treatment of depression, Class 1 chemical drugThe antidepressant effect of Tolterodine may be related to enhancing the central nervous system's serotonin (5-HT) and norepinephrine (NE) effects by inhibiting their reuptake.

• On November 19, 2022, Linpulise Tablets of Yingli Pharmaceutical passed the priority review process and were conditionally approved for marketing.It is the first highly selective PI3Kδ inhibitor in China.For adult patients with relapsed or refractory follicular lymphoma who have previously received at least two systemic therapies.

Recently, the Center for Drug Evaluation and Research (CDER) of the US FDA released the 2022 New Drug Approval Report. According to the report, in 2022, the FDA approved a total of 37 new drugs, including 22 new molecular entities and 15 biologics. In addition, there were 2 vaccines, 5 cell and gene therapies, and 1 microbiome therapy.

Compared with previous years, the number of new drugs approved by the FDA this year has decreased, but the level of innovation remains extremely high. The approved biologics are diverse, covering monoclonal antibodies, bispecific antibodies, ADCs, TCR therapies, etc. By disease area, among the new drugs approved by the FDA in 2022 (excluding vaccines, gene therapies, and cell therapies), oncology drugs accounted for the highest proportion, followed by neurological drugs.

Source: FDA, analysis by Frost & Sullivan

The FDA accelerates the research and development and review of new drugs through four pathways: Fast Track designation, Priority Review designation, Breakthrough Therapy designation, and Accelerated Approval.

Among the approved new drugs, 12 have obtained fast-track designation, 21 have been launched through priority review, 13 have been granted breakthrough therapy designation by the FDA, and 6 have been launched through accelerated approval procedures. In terms of drug innovation, 20 innovative drugs have novel and unique mechanisms of action and have been identified as 'First-In-Class' therapies, accounting for 54% of the total number of new drugs approved throughout the year.

In 2022, Nanjing Legend, a Chinese local enterprise, successfully 'went global'.The cell therapy CAR-T product Cilagio, developed in collaboration with Johnson & Johnson of the United States, is the only one approved by the FDA for marketing throughout the year.In addition, among the four approved gene therapies, it is noteworthy that the rare disease space has performed impressively, with three rare disease drugs launched:

• On August 17, 2022, the FDA approved Bluebird Bio's gene therapy Zynteglo (betibeglogene autotemcel, beti-cel), for the treatment of beta-thalassemia.

• On September 16, 2022, the FDA officially approved Bluebird Bio's gene therapy SKYSONA (elivaldogene autotemcel, Lenti-D™) for marketing, for the treatment of male patients aged 4 to 17 years with early-onset cerebral adrenoleukodystrophy (CALD) who carry the ABCD1 gene mutation.

• On November 23, 2022, the FDA approved CSL Behring's Hemgenix (etranacogene dezaparvovec) for the treatment of adults currently using factor IX prophylaxis or currently having hemophilia B (congenital factor IX deficiency), or those with a history of life-threatening bleeding or recurrent, severe spontaneous bleeding events.

License-in is one of the important industrial models for the rapid development of the innovative drug industry. It can help pharmaceutical companies quickly build a promising product line, shorten the R&D cycle of innovative drugs, and control R&D risks.

In 2022, the drug types covered by License-in transactions included small molecules, ADCs, antibodies, and other tracks. The top ten projects by transaction amount were concentrated in disease areas such as oncology and autoimmune diseases.

• On February 23, 2022, Huadong Medicine announced that its wholly-owned subsidiary, Sino-US Huadong, has signed an exclusive product licensing agreement with Kiniksa. The company has paid a down payment of $22 million to Kiniksa, with maximum milestone payments of up to $640 million for development, registration, and sales, as well as tiered two-digit net sales commission fees, in order to obtain exclusive licenses for two of its immunotherapy products, Arcalyst and Mavrilimumab, in 24 Asia-Pacific countries and regions (excluding Japan), including development, registration, and commercialization rights.

• On February 27, 2022, in order to comprehensively deepen its layout in the ADC field, Huadong Medicine and Heidelberg Pharma carried out equity investment and product cooperation, introducing multiple innovative ADC products. Huadong Medicine paid a down payment of $20 million and received milestone payments totaling $449 million for the exclusive development and commercialization rights of HDP-101 and HDP-103 in 20 Asian countries and regions. In addition, it will also receive the exclusive option rights for HDP-102 and HDP-104, pay a one-time exercise fee of $5 million for each product, as well as milestone payments of up to $225.5 million.

Source: Public information, Frost & Sullivan analysis

The License-out model places high demands on product competitiveness. The enthusiasm for domestic pharmaceutical companies to reach license-out deals with international pharmaceutical firms has shown the R&D strength of domestic innovative pharmaceutical companies and is gradually becoming an important channel for independently developed innovative drugs to enter the international market.

In 2022, the transaction volume of innovative drug license-outs was quite substantial, with a total of 7 transactions exceeding $1 billion in scale throughout the year. Among them, the highest transaction amount was the cooperation agreement between Colong Pharmaceutical and Merck & Co., which involved the joint development of 7 preclinical ADC drugs for cancer treatment, with a transaction value approaching $10 billion. Compared to last year's data, the disease areas of blockbuster products are also mainly concentrated on oncology. Notably, 4 out of the 7 transactions were concentrated in the ADC drug category. As more pharmaceutical companies intensify their layout in the ADC drug field, China is gradually demonstrating its leading position in the ADC drug market.

Source: Public information, Frost & Sullivan analysis

In the context of the pharmaceutical industry's increasing emphasis on external cooperation and an international perspective, whether it is enhancing internal R&D capabilities or adopting an 'imported' model, forward-looking product pipeline layout and product value are still particularly important.

In the 'go global' model, companies need to clarify their product and internationalization strategic values to maximize benefits from transactions. The true value of an innovative drug product needs to be verified over time, and let's continue to wait and see in the new year that is about to arrive.