Industry Insights | Breaking Through the Peak of Infections —— Meeting the Demand for COVID-19 Treatment Medicines is Crucial

On December 7, 2022, the Comprehensive Group of the Joint Prevention and Control Mechanism of the State Council organized the formulation of the 'Guidelines for Home Treatment of COVID-19 Infected Individuals'. The home treatment process outlined in these guidelines applies to asymptomatic or mildly symptomatic individuals without severe underlying diseases, as well as those whose underlying diseases are stable and who do not require hospitalization due to serious dysfunction of vital organs such as the heart, liver, lungs, kidneys, or brain.

Although the vast majority of infected individuals fall into this category, based on the population base, there is still a large susceptible population in China that could potentially develop severe and critical illness.

From the perspective of clinical medical treatment practices, high-risk groups mainly include three categories: individuals over 60 years old, especially those over 80 years old, patients with underlying diseases, and those who have not been vaccinated.

At the press conference on the epidemic on December 21, 2022, WHO experts reminded that without sufficient protection for high-risk populations, a considerable number of COVID-19 hospitalizations, severe cases, and deaths will occur both in China and elsewhere.

The prevention and control of the epidemic for vulnerable populations mainly consists of two lines of defense: prevention and treatment. These measures serve to block the spread of COVID-19 and reduce the severity of illness among patients. The first line of defense primarily relies on preventive measures such as COVID-19 vaccines, while the second line is focused on antiviral treatment. The accessibility of antiviral drugs is particularly important. By using antiviral drugs, the risk of severe illness, critical illness, and death among infected individuals can be reduced. At the same time, it can effectively alleviate the operational pressure on hospitals at all levels, avoid a large number of COVID-19 patients crowding medical resources, and allocate more precious resources to the treatment and recovery of critically ill patients caused by other diseases.

Source: Public information, literature materials, Frost & Sullivan analysis

The complex and changing global pandemic situation drives the research and development of COVID-19 drugs in various countries, with thousands of COVID-related clinical trials underway around the world.

Among the many COVID-19 drugs authorized for emergency use/conditional approval globally, in terms of mechanism of action, small molecule drugs include two RdRp inhibitors: Regeneron's Remdesivir and Merck's Molnupiravir. There are two 3CL protease inhibitors: Pfizer's Paxlovid and Ono Pharmaceutical's Ensitrelvir. Additionally, there are Incyte's JAK inhibitor Baricitinib. Most of the approved neutralizing antibodies for COVID-19 treatment fall into the biologic category, including Sotrovimab, Casirivimab/Idelvimab, and Banuvimab.

Currently, the mainstream research and development directions for COVID-19 treatment drugs are focused on neutralizing antibodies and small molecule antiviral drugs, mainly targeting three targets: the spike (S) protein, 3CL protease, and RNA polymerase during the virus's invasion, replication, and proliferation in the human body.

Source: Literature review and analysis by Frost & Sullivan

Neutralizing antibodies and small molecule drugs each have their own advantages in the treatment of COVID-19 and play important roles.

The advantage of neutralizing antibodies lies in their rapid onset of action; even if administered after the initial stage of infection, they can still produce good results. Additionally, their side effects are relatively minor. However, their clinical application is largely challenged by viral mutations, as viral proteins are prone to mutation, leading to immune escape and a decrease in the activity of neutralizing antibodies.

In contrast to antibody drugs, which generally require intravenous or subcutaneous injection in hospitals, small molecule oral medications have high patient tolerance and good compliance, making their use more convenient. Secondly, the storage and transportation of small molecule oral medications are convenient, and they can meet practical needs even in areas with scarce medical resources and underdeveloped healthcare conditions. In addition, their production is easy to increase, with low production costs and medication expenses, making them more affordable for patients.

Currently, in terms of the choice of oral small molecule COVID-19 drugs in China, in addition to Paxlovid, which was conditionally approved for import by the National Medical Products Administration in February 2022, our country's independently developed Azvudine is also included in the recommended drug list. Moreover, under the background of the rapid approval mechanism, another antiviral drug Molnupiravir was conditionally approved in China in December 2022. Subsequently, the National Medical Products Administration required the continuation of relevant research work, with a deadline to complete the conditional requirements and submit research results.

In March 2022, the National Health Commission and the National Administration of Traditional Chinese Medicine issued the 'Diagnosis and Treatment Protocol for Novel Coronavirus Pneumonia (Ninth Edition)', further standardizing antiviral treatment by recommending two drugs - Anbalimab/Remdesivir Monotherapy Injection and Nirmatrelvir/Ritonavir Tablets in Combination Package (Paxlovid).

In August 2022, the National Medical Products Administration conditionally approved the registration application for adding azvudine tablets to the treatment indications for COVID-19, and included the drug in the diagnosis and treatment protocols.

On December 30, 2022, the National Medical Products Administration conditionally approved Merck's COVID-19 treatment drug Molnupiravir Capsules (trade name: LAGEVRIO, Molnupiravir) under the special approval procedure for drugs.

PaxlovidAs the world's first COVID-19 drug targeting the SARS-CoV-2 protease, it has become one of the most highly sought-after drugs due to its excellent clinical advantages. Phase II/III EPIC-HR clinical trial data show that Paxlovid can significantly reduce the risk of COVID-19-related hospitalization or all-cause death in patients and effectively lower viral load. Compared with the placebo control group, the proportion of patients who were hospitalized or died within 3 days and 5 days after symptom onset in the Paxlovid group was reduced by 89% and 88%, respectively; during a 28-day follow-up, 0.8% of patients in the Paxlovid group were hospitalized or died compared to 6.3% in the placebo group; after a 5-day course of treatment, the viral load in patients was reduced by about 10 times compared to the placebo group.

AzvudineAzvudine, originally an HIV treatment drug, was discovered to specifically act on the RdRp of the novel coronavirus, thereby inhibiting viral replication. Later, its indication for COVID-19 was added. The results of a pivotal Phase III registration clinical trial showed that azvudine has the efficacy of accelerating the clearance of the novel coronavirus, alleviating symptoms, and shortening the course of disease; in terms of safety, overall tolerability is good, with no statistically significant difference in the incidence of adverse events compared to the placebo group.

From the perspective of clinical users, the applicable population for Paxlovid as outlined in the treatment plan is 'adults and adolescents (12-17 years old, weight ≥40kg) who are within 5 days of onset and have mild to moderate symptoms with a high risk factor for progressing to severe illness'; the applicable population for Azvudine is set as 'adult patients with mild COVID-19'. In addition, industry experts recommend that antiviral drugs should be taken by vulnerable populations in the early stages of illness to achieve more clinical benefits.

On December 20, 2022, at a press conference on joint prevention and control by the State Council, Wang Guiqiang, director of the Department of Infectious Diseases at Peking University First Hospital, mentioned that early intervention should be carried out for high-risk groups with severe illness. Antiviral drugs should be taken as soon as possible to accelerate virus excretion, shorten the course of the disease, and reduce the occurrence of severe cases.

At the same time, both antiviral drugs are prescription medications and have many contraindications during use. The scientific, rational, and safe use of medications requires ensuring that they are carried out under the guidance of a doctor.

Source: Public information, 'Diagnosis and Treatment Protocol for Novel Coronavirus Pneumonia (Ninth Edition)', Frost & Sullivan analysis

These two 'star' drugs are available on the market but are rarely seen in person. At present, fewer people can actually purchase them through official channels. In comparison to the surging market demand, the number of drugs that can be supplied to hospitals, primary community service centers, and internet hospitals in the short term is very limited. The deployment of online and offline sales terminals is accelerating.

On November 11, 2022, the Joint Prevention and Control Mechanism of the State Council announced twenty measures to further optimize epidemic prevention and control, which mentioned accelerating the reserve of drugs related to the treatment of COVID-19. It is necessary to ensure supply reserves to meet patients' medication needs, especially those with severe high-risk conditions and elderly patients.

On December 12, 2022, the State Council's Joint Prevention and Control Group issued the 'Notice on Doing a Good Job in Internet Medical Services for COVID-19', which states that medical institutions (including internet hospitals and those providing internet-based diagnosis and treatment services) can issue prescriptions for treating symptoms related to COVID-19 through internet diagnosis and treatment platforms, and encourage the entrustment of qualified third parties to deliver medications to patients' homes.

Real organisms:According to the information disclosed by Real Biotech, the company has a modern production base in Pingdingshan, capable of achieving an annual production capacity of over 3 billion tablets, fully ensuring the supply and reserve of drugs. In July 2022, Fosun Pharma introduced that it has currently reached strategic cooperation agreements with several domestic commercial partners such as Sinopharm Holdings and China Resources Pharmaceutical, fully leveraging their respective resource advantages to jointly improve the national terminal accessibility of Real Biotech's Azvudine tablets and accelerate the coverage of channel networks.

PfizerThe expected supply volume for 2022 is 120 million courses of treatment. As of November 30, 2022, Pfizer has delivered 37 million boxes to 52 countries around the world. With the increasing actual demand, Pfizer is currently actively improving drug accessibility.

Small molecule drugs represented by 3CL protease inhibitors and RdRp inhibitors have become the main research and development direction for pharmaceutical companies, occupying the mainstream position in the current market. The indications cover asymptomatic, mild, moderate, and severe patients, and most COVID-19 small molecule drugs are administered orally, making treatment more convenient for patients.

Source: CDE, Clinical Trials (as of December 31, 2022), Frost & Sullivan analysis

There are numerous companies deploying domestically produced small molecule COVID-19 effects drugs. Among them, the research and development products of companies such as Sinobiopharmaceutical Group Co., Ltd., Junshi Biosciences Inc., Zhongsheng Pharmaceutical Co., Ltd., Qianfanzhan Biotechnology Co., Ltd., Guangshengtang Pharmaceutical Co., Ltd., and Sinobiopharmaceutical Group Co., Ltd. have entered the late clinical stage.

Xianoneng Medicine (02096.HK) announced that the candidate innovative drug Xianonexin ™ (SIM0417) has made phased progress: The Phase II/III clinical study of the drug has completed enrollment of all 1208 patients, becoming the first project in China with a Phase II/III clinical study for an oral small molecule targeting the CCL3 pathway to have enrolled all participants.

Junshi Biology (688180.SH, 01877.HK) announced that its COVID-19 drug VV116 has reached the primary endpoint of a phase III clinical trial comparing it with Pfizer's Paxlovid for the early treatment of mild to moderate COVID-19. At the same time, multiple international multi-center phase III clinical studies are underway.

Frontier Biotech (688221.SH) has released the latest progress on its investigational anti-SARS-CoV-2 small molecule drug FB2001. It is advancing international multi-center, randomized, double-blind, placebo-controlled phase II/III clinical trials, with the current trial group having been enrolled and dosed.

Guangshengtang (300436.SZ) announced that its anti-COVID oral drug GST-HG171 has recently received ethical committee approval from the First Affiliated Hospital of Guangzhou Medical University and Shenzhen Third People's Hospital to initiate Phase II/III clinical trials. The pivotal registration clinical study has been fully launched, and the first subject has recently successfully enrolled for administration.

Zhongsheng Pharmaceutical (002317.SZ) announced that significant progress has been made with the RAY1216 tablet: The randomized, double-blind, placebo-controlled Phase III clinical study protocol for the treatment of patients with mild and uncomplicated SARS-CoV-2 infection has obtained a rapid review approval from the Medical Ethics Committee of the First Affiliated Hospital of Guangzhou Medical University, the leading institution, and the project has been approved to proceed.

Kaiyuan Pharmaceutical (09939.HK) disclosed key data on its independently developed COVID-19 oral drug Prucurium. The final analysis results of a global multi-center Phase III clinical trial for treating mild to moderate cases showed that it can effectively reduce hospitalization and mortality rates, significantly lower the viral load of SARS-CoV-2, and improve related COVID symptoms.

In addition to the pace of R&D progress, the competitiveness of future COVID-19 oral medications may focus on clinical effectiveness, safety, and cost-effectiveness. Drugs that are safe, effective, and feasible will withstand continuous market verification.

The prevention and control of the COVID-19 pandemic have entered a new phase, with many pharmaceutical companies seeking structural opportunities amidst dynamic demand changes. Over time, this will bring more excellent drug treatment options to the broad patient population.

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In the field of COVID-19 treatment drugs, Frost & Sullivan has served well-known companies such as Junshi Biosciences, SinoBiologics, BeiGene, Tengsheng Bio-pharmaceuticals, Horizon Biosciences, Yundeng New Energy, Real Biologics, and Kite Pharma. In the future, it will continue to cultivate and innovate in the biopharmaceutical field, continuously output unique industry insights, deeply explore market opportunities and investment highlights in niche markets for clients, and provide more comprehensive development strategies.