Frost & Sullivan Exclusive Interview with Zhiyi Biology — Building a Standardized, Integrated Microecological Drug Development Platform

Introduction

Microecological drugs are a class of medications prepared using active microorganisms or their metabolites. By regulating the microbial community, they aim to maintain, reconstruct, or restore a healthy human microecology. They are considered another new form of medication following small molecule, macromolecule, cell therapy, and gene therapy. The rapid development in the field of microecological drugs began with the rise and application of microbiome technology. Since the 1990s, research on the structure and function of the microbiome has continuously revealed the close connection between microorganisms and human health. It not only affects basic physiological processes such as digestion, immune system, and metabolism but is also closely related to the occurrence and development of many diseases. Since the human microbial community contains important genetic information, it has been metaphorically referred to as the 'second genome' of humans. In the scientific research boom of microecological drugs, a number of domestic and international research institutions and enterprises have emerged, deeply exploring the application potential of microecological drugs as a therapeutic method, and elucidating their safety and efficacy in clinical practice. At the same time, the progress in scientific research has also driven up industrial and capital temperatures, with multiple parties in the industry collaborating to build an ecosystem for the development of the microecological industry.

Zhiyi Biology, founded in 2013, is dedicated to the clinical research and development of second-generation probiotics (NGPs) and live biotherapies (LBPs). Based on solid basic research and self-controllable underlying development technologies, the company has achieved results and continuously moved forward, growing into a leader in the microecological drug industry. Since its establishment, the company has received support from many well-known institutions at home and abroad, completing two rounds of financing totaling 350 million yuan.

Recently, Zhiyibio has once again achieved remarkable clinical success, solidifying its leading position in the industry. From developing China's first original live biotherapeutic product SK08, to advancing the product pipeline into late clinical stages, and then to building an advanced pilot-scale and industrialization platform for live biotherapies, Zhiyibio has steadily moved forward and is gradually exploring a complete development path for live biotherapies—ranging from scientific research theory, clinical studies to industrial implementation.

In August 2023, Zhiyi Biotech's first in vivo biopharmaceutical SK08 Live Powder was licensed by the National Medical Products Administration (NMPA), officially launching a pivotal Phase III clinical trial for the treatment of diarrhea-predominant irritable bowel syndrome (IBS-D). In the previous Phase II clinical trial, SK08 met the predefined effectiveness endpoint, with overall improvement in abdominal pain and diarrhea symptoms, while also demonstrating very good safety.

What application advantages and clinical value do living biologics possess? As a new endeavor, what challenges and variables are faced in the development of living biologics? How can the industry better transform scientific research achievements into development, accelerating progress? What is the future development trend of the industry? Frost & Sullivan's Life Sciences Practice has invited Dr. Wang Ye, co-founder and CEO of Zhiyi Biotech, to discuss these issues with us in detail, drawing on Zhiyi Biotech's years of innovation and industry experience, in order to provide more detailed explanations and insights for industry stakeholders.

Exclusive Interview Guest

Wang Yuan, Frost & Sullivan's Life Sciences Business Unit: In recent years, in new drug research and development, microorganisms have been studied and developed as 'living biological drugs' (LBPs). Living biological drugs can be understood as second-generation probiotics. As a leading enterprise deeply involved in this field, could you briefly describe what living biological drugs are, and what are the main differences between second-generation probiotics and first-generation probiotics?

The development process of probiotics can be divided into two stages. 'First-generation probiotics' were used as dietary supplements, employing common food-borne strains or species, and it was found that probiotics were effective against diarrhea and constipation. This phase lasted for decades.

With the development of separation and sequencing technologies, more new strains that are closely related to diseases but have no history of human application have been discovered. This has led into the phase of second-generation probiotics or new-generation probiotics, which involve developing drugs using new strains or engineered bacteria.

The time since the first approval by the FDA/EMA for a live biologic drug to conduct registration-based clinical trials has been about 10 years. The US FDA has already provided a relatively clear definition of live biologic drugs, specifying three characteristics: first, they contain living organisms such as bacteria. Second, they can be used for the prevention, treatment, or management of human diseases or indications, and are not vaccine products.

Currently, the LBP projects under research mainly include single bacteria, composite bacteria, engineered bacteria, and those developed based on fecal microbiota transplantation (FMT). Our company has developed Bacteroides fragilis (Bacteroides fragilisBacteroides is a type of bacterium within the Bacteroidetes phylum. Although it is not commonly mentioned in daily life, it is actually one of the most common anaerobic bacteria in everyone's intestines. Over the long application process of probiotics, no other species from the Bacteroidetes phylum have been discovered. Currently, more and more research has found that it plays a role in digestion, metabolism, autoimmunity, tumors, and other fields.

Wang Yuan from Frost & Sullivan's Life Sciences Business Unit: The rapid development of sequencing technology, gene editing technology, and bioinformatics has provided technical support for the development of in vivo biopharmaceuticals. What therapeutic potential do you think lies within in vivo biopharmaceuticals themselves that is driving a wave of international research institutions and companies into investment in development?

The variety and quantity of microorganisms within the human body are extremely vast, numbering about 10¹⁴The human microbiota is 10 times the number of human cells, and the human body is actually a symbiotic organism with bacteria. Therefore, human microbiota provides us with a directly relevant and vast reservoir of drugs for drug development.

Currently, drug development is undergoing a transformation from small molecule drugs to large molecule biologics, and then to in vivo biologics. Cell-based drugs and bacterial drugs that appear in their complete living form provide developers with completely different approaches due to their unique biological activities that differ from those of individual large and small molecules. Technological means such as gene editing allow for the modification of cells and bacteria, giving LBP more possibilities.

Wang Yuan from Frost & Sullivan's Life Sciences Business Unit: Recently, we were very pleased to see that SK08, as the first in-vivo biopharmaceutical to enter clinical trials in China in over a decade, has been officially announced to have entered Phase III trials domestically. At the same time, Phase I clinical trials of SK10 conducted in the United States are also enrolling participants. Could you please introduce their application strengths in the respective disease treatment areas, how they meet and address clinical needs, as well as their subsequent development strategies?

SK08 is currently the fastest-developing live biopharmaceutical in China, with indications including Irritable Bowel Syndrome (IBS), Ulcerative Colitis (UC), and tumors. In the IBS-D indication, phase II results demonstrated high safety and clear therapeutic effects (pain + diarrhea dual endpoint). Phase III clinical trials have now been initiated, scheduled to be completed in 2025-2026, with plans to apply for marketing.

Irritable bowel syndrome (IBS) is a common and difficult-to-treat disease of the digestive tract, characterized by persistent or intermittent symptoms of intestinal dysfunction such as abdominal pain, bloating, diarrhea, and constipation. The overall prevalence rate in the general population of China is about 6.4%, but there are currently no targeted therapeutic drugs available. Clinically, there is an urgent need to develop safer and more effective treatment medications. The pathogenesis of IBS is not yet fully understood; it is generally believed to be related to intestinal inflammation, microbiota, gastrointestinal motility, and the brain-gut axis. From this perspective, living biologics may have an advantage in achieving breakthroughs.

The indication for SK10 is chemotherapy-related diarrhea (CID), which is the first global application of a living biologic in this indication. The Phase I clinical trial of SK10 in the United States is expected to be completed this year, followed by international multi-center clinical trials. We conducted a comprehensive market survey for the selection of indications. In China, chemotherapy drugs account for more than 70% of the overall market for anti-tumor drugs, and the proportion of diarrhea caused by chemotherapy drugs is very high, reaching 50-90%. This is also a major factor leading to chemotherapy adjustments, delays, or even discontinuation. SK10 has shown significant therapeutic effects in CID. At the same time, our developed inactivated form has better safety profiles for tumor patients and possesses superior commercial performance.

Wang Yuan from Frost & Sullivan's Life Sciences Business Unit: In addition to the well-known field of digestive tract diseases, in recent years, several basic studies have been exploring the relationship between the microbiota and cancer treatment. The gut microbiota is involved in multiple aspects of the host immune response and regulates tumor immunity, including antigen presentation, T cell activation, and more.

It is reported that Zhiyibio has also followed up with its layout. The SK08 co-antibody treatment for advanced solid tumors in combination with PD-1/L1 inhibitors has entered the clinical stage in China. Could you please explain to us the application value of the combined use of 'cancer immunotherapy + microbiome'?'

The clinical efficacy of immune checkpoint inhibitors (ICIs) has been widely recognized, but monotherapy still has limitations, such as low response rates and secondary resistance, which need further improvement and enhancement.

The scientific community has conducted a lot of meaningful research on the impact of gut microbiota on tumor immunotherapy. For example, Professor Yu Jun from The Chinese University of Hong Kong recently published a review titled 'Gut microbiota and immune alteration in cancer development: implication for immunotherapy', which explains the interaction between the gut microbiota and the immune system during tumor development, and summarizes research reports on using the gut microbiota to improve the efficacy of immunotherapy, which is worth referring to.

In the industry, the combination of living biologics and ICI drugs is also advancing rapidly, with several varieties having entered clinical trials. Internationally, MNCs such as BMS, Merck Sharp & Dohme, Roche, and Moderna have been deploying in this area, aiming to continuously improve and enhance the clinical effectiveness of ICI drugs. The approval of SK08 for this indication also reflects the continuous attention and research from both domestic scientific research and industry communities on this topic.

Wang Yuan from Frost & Sullivan's Life Sciences Business Unit: Currently, there are two live biopharmaceutical products, RBX-2660 and SER-109, approved for marketing globally. As a leading domestic enterprise, what is your evaluation of such international breakthroughs? From the perspective of the R&D process and market prospects of these two products, what inspiration do they provide for our local product development and that of Zhiyi Biotech?

The validation of LBP in the indication of recurrent Clostridioides difficile infection (rCDI) is a great encouragement to us and has provided us with many insights.

Both products are indicated for the treatment of rCDI, with basically the same principle, but there are significant differences in active ingredients and administration methods. RBX2660 is administered as a suspension enema, with viable bacteria as the efficacy indicator; SER-109 is taken orally, with spores as the efficacy indicator. This provides developers of viable bacteria drugs with different references and evaluation approaches.

Looking back at the development process of these two products, overall, the successful development of FIC varieties has not been easy. Firstly, they entered clinical trials 10 years ago, undergoing difficult explorations in clinical settings and multiple attempts at key clinical trials. Additionally, a large amount of research work was carried out on the CMC study that accompanied the NDA application, with many updates made to process and quality studies. If you are interested, you can conduct separate research on these topics.

Now, looking at the LBP varieties entering clinical practice, apart from common indications such as intestinal, urinary, and skin diseases, there seems to be a greater interest in new indications, such as tumors, metabolic diseases, mental illnesses, and rare diseases. However, in fact, it is the intestinal diseases that have taken the lead in breaking through. This has its own development logic: it is clear that live bacteria drugs are closely associated with digestive diseases, from the microbiota to immunity.

Wang Yuan from Frost & Sullivan's Life Sciences Business Unit: The development of live biopharmaceuticals is highly challenging. For example, during the drug discovery phase, natural strains are screened from nature and development has a certain degree of randomness; during the drug R&D phase, it is necessary to comprehensively consider the impact of production processes, drug matrices, and storage conditions on strain viability to achieve stable efficacy. Which aspect do you think is the main difficulty? What suitable solutions are provided by Zhiyi Biology at the current stage?

In the preclinical phase of live biopharmaceuticals, the main difficulties lie in strain safety evaluation, model selection for nonclinical evaluation, biodistribution studies, CMC studies, etc. The main reason is the scarcity of varieties, with significant differences in development details between different strains. The evaluation system still needs to be established. Even though a considerable number of varieties have now entered the clinical phase, these issues remain unavoidable and must be addressed with effort.

Our first variety, SK08, was basically independently developed by our team (including collaborating units) in terms of strain safety evaluation, CMC research, pharmacology, and pharmacokinetics. This preclinical study took about five years. In the three years since entering clinical trials, continuous research is still being conducted on these aspects. Based on SK08, SK10 was developed and during the IND period, extensive communication was carried out with the FDA, leading to a deeper understanding in many areas.

In summary, we have carried out a number of pioneering explorations and researches, which can be said to have established the 'Know-How' from strain to drug from scratch. In recent years, with the development of new strains LBP, including both collaborative and self-developed efforts, we have expanded our capabilities in these technical aspects more comprehensively. We hope that this system solution can provide some useful support to the industry.

Wang Yuan from Frost & Sullivan's Life Sciences Business Unit: The research and development of living biopharmaceuticals is in the early stages of transitioning from academia to industry. Zhiyi Biotech has proactively built technical platforms and production workshops for late clinical stages and commercial development. Could you please introduce our company's current layout in this area?

At the beginning of the company's establishment, live biopharmaceuticals were still in their infancy, without development guidelines and no CRO companies available domestically. We had to choose to build our own technical teams and platforms, construct our own small-scale and pilot-scale workshops. Although the early stages were very difficult, they ultimately became a reflection of our core R&D capabilities.

Today, we have built a 10,000 square meter R&D center and pilot plant in Guangzhou Science City, including two pilot workshops meeting GMP standards. The largest single tank capacity reaches 5,000 L, supporting multiple dosage forms. It is the most advanced pilot and industrialization platform for live biopharmaceuticals in China and can support CMC research and CDMO services for live biopharmaceuticals aiming for registration in China and the US.

The company also established the 'Guangdong Province Living Biopharmaceutical Engineering Technology Research Center' in 2021. We look forward to sharing our technology and platform with the industry to jointly enhance the development and industrialization level of living biopharmaceuticals in China. At this stage, we are gradually achieving results in this area.

Wang Yuan from Frost & Sullivan's Life Sciences Business Unit: The emerging field of living biopharmaceuticals has seen the influx of new participants. How will Zhiyi Biotech build or reinforce its moat in various aspects, and how can it help new enterprises join in to jointly drive industry development?

After ten years of experience in variety development and continuous communication and collaboration with regulatory authorities and cooperative researchers, the company has established the most complete technology development platform for live biopharmaceuticals in China, from strain identification to drug development, including strain safety evaluation, pharmacology and distribution studies of live bacteria drugs, CMC research, etc. At the same time, through the development of SK08 and SK10, the company has established the technical and registration pathways for preclinical development of LBP drugs at both the FDA and NMPA.

In terms of development direction, the existing pipeline not only covers different strains and species but also encompasses various forms of bacteria, such as viable and inactivated bacteria, as well as developments in bacterial components. At the same time, we are also exploring expansions in synthetic biology, sparking new ideas.

Relying on the above platform advantages, our pipeline development efficiency has been greatly improved. From preclinical to NDA, we can provide the industry with comprehensive system solutions. For example, our platform has completed the preclinical research for the first new LBP variety developed through external cooperation. It only took us 8 months from signing the contract to completing Pre-IND, which was highly recognized by our partners. Currently, there are multiple projects under communication and exchange, and it is expected that 1 - 2 varieties will be INDed or enter clinical trials from our platform each year in the future.

Wang Yuan from Frost & Sullivan's Life Sciences Business Unit: Zhiyi Biotech is a leading enterprise in the field of live biopharmaceuticals in China. What are your plans for the company in the future? What are your outlooks for the industry?

For Zhiyibio, we will make full use of the company's first-mover advantage and leading technology platform to actively promote the development progress of clinical pipeline products, especially SK08. We hope that in the next few years, China's first marketed live biotherapeutic drug will be born, and we will advance the international synchronized clinical research of the first original Chinese LBP drug. At the same time, we will continue to strengthen our gains in terms of capital and talent to lay a solid foundation for subsequent clinical progress and industrial development. In addition, we will also vigorously expand external cooperation, strengthen cooperative development with outstanding external technologies and projects, and enrich our product pipeline and business model.

In China's LBP field, tremendous development has also been achieved in recent years. More than a dozen varieties have entered clinical trials, half of which have obtained FDA IND approvals. We believe that LBP drugs are still in their early stages compared to small molecule and large molecule drugs. We hope that more enterprises will participate to jointly promote the vigorous development of the industry. Currently, the development status of LBP drugs is similar to that of the first CAR-T product launched six years ago (Novartis' Kymriah). We believe that within 5-6 years, at least five LBP products will be available internationally, and domestic products will also be on the market. Just as there are various forms or categories of cell therapies, LBP drugs will also present diverse forms, covering more disease areas.

We believe and look forward to the next eruption.

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