The first CAR-T product for leukemia in China has received NDA approval, setting off a new wave of commercialization

He Yuan Biotech was established in June 2018. It is a biopharmaceutical company dedicated to becoming a global leader in cutting-edge innovation technology-driven cell and gene biology, focusing on the research, development, commercialization of new cell and gene-based drugs. It has a R&D platform centered around CAR technology platforms, gene editing technology platforms, and iPSCs technology platforms. It has a highly expandable pipeline layout in the fields of hematological oncology, solid tumors, and non-tumor diseases, including innovative single and multi-target products and general cell therapy products. Its R&D, clinical development, registration application speed, and rapid commercialization capabilities are impressive. In the field of leukemia treatment, its first core product, HyQilunSA injection, is expected to become China's first CAR-T product.

According to the key clinical study results disclosed at the 64th Annual Meeting of the American Society of Hematology (ASH) on the treatment of relapsed or refractory B-cell acute lymphoblastic leukemia (r/r B-ALL), Hyceltinib injection has a persistent high remission rate and significantly reduced CAR-T treatment-related toxicity severity. The overall response rate (ORR) reached 82.1%, demonstrating sustained remission and long-term survival benefits regardless of whether hematopoietic stem cell transplantation was subsequently received. Compared with existing treatment methods, Hyceltinib injection has a more persistent high remission rate and better safety profile, representing a major breakthrough in the treatment of adult r/r B-ALL and greatly meeting the huge clinical and market demand for it.

Looking at the overall picture, from the global level to China, from regulation to the market, the cell and gene therapy industry is in a period of intense activity.

Taking CAR-T drugs as an example, in August 2017, Kymriah from Novartis was approved for marketing, becoming the world's first approved CAR-T drug and marking the beginning of the first year of global CAR-T therapy. With the approval and launch of more and more new drugs and the expansion of indications, as of the first three quarters of 2022, the US FDA has approved a total of six CAR-T drugs for marketing, and the National Medical Products Administration (NMPA) of China has also approved two imported CAR-T products for lymphoma treatment. Globally, CAR-T drugs have achieved sales exceeding $1.8 billion within the year, marking the golden development stage for the global cell and gene therapy (CGT) industry.

Figure 1 Analysis of globally approved CAR-T drugs

Note: 1. r/r = recurrent or refractory; B-ALL = B-cell acute lymphoblastic leukemia, LBCL = large B-cell lymphoma, FL = follicular lymphoma, MCL = mantle cell lymphoma, MM = multiple myeloma; 2. As of November 22, 2022

Information sources: FDA, NMPA, company websites and announcements, Frost & Sullivan analysis

With its outstanding efficacy and the hope of 'curing' patients, the clinical prospects of CGT drugs are gradually becoming prominent, with continuous rising interest. It is expected that CGT drugs will remain a 'hot commodity' in the field of innovative drugs in the coming years.According to Frost & Sullivan data, in 2017, the global CGT drug market size was less than $100 million. After continuous exploration in the early stages, the global CGT drug market grew at an annual compound rate of 144.5% to reach $3.54 billion by 2021. CGT is entering a golden age of rapid development, with the market size expected to grow at an annual compound rate of over 50% to reach $156.22 billion by 2030.

Figure 2 Analysis and Forecast of the Global and China CGT Treatment Market Size

Data source: Analysis by Frost & Sullivan

With the continuous emergence of innovative technologies such as self-body models and general-purpose technologies represented by UCAR-T and CAR-NK, the number of ongoing CGT drug clinical trials globally continues to grow, and their indications are also expanding. According to Frost & Sullivan statistics, as of November 2022, there were more than 2,600 clinical trials underway globally, with about 820 of them conducted in China, ranking second globally in terms of number. China has become a fertile ground for the development of CGT globally.

Figure 3 Distribution of Global CGT Drug Therapy Pipeline in Development by Region

Data source: Clinicaltrials.gov, analysis by Frost & Sullivan

With strong policy support from the government, China has become a fertile ground for the development of the global cell and gene therapy industry. The cell and gene therapy industry has the potential to achieve parity with the United States, helping our country's biopharmaceutical industry reach new heights.

In addition, the CGT drug R&D pipeline is also flourishing, with about two-thirds of the clinical trials underway targeting oncology treatment. According to Frost & Sullivan data, the global number of new cancer cases in 2021 reached 19.737 million, and existing cancer drugs suffer from high recurrence rates and other shortcomings. The large patient base and clinical demand have promoted the clinical R&D of CGT drugs for cancer.

With continuous technological improvements, the safety and effectiveness of cell gene therapy drugs have been enhanced. Research on CGT drugs for infectious diseases, cardiovascular diseases, and autoimmune system diseases is also increasing, bringing hope for the cure of these diseases.

Figure 4: Global CGT pipeline in development by therapeutic area

Data source: Clinicaltrials.gov, analysis by Frost & Sullivan

While the research progress of CGT drugs in our country has been rapid, it has also posed challenges to regulation. Due to the 'active drug' biological nature of CGT drugs, their standardized and safe use is particularly important. After experiencing a period of free development and adjustment in the cell gene therapy industry, in recent years, multiple departments including the National Medical Products Administration and the National Medical Products Evaluation Center have successively introduced a series of industry policies and guiding opinions, promoting the standardized development of China's cell gene therapy industry.

At the same time, since China joined the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH), China's pharmaceutical development has aligned with international standards in terms of quality, safety, efficacy, and multidisciplinary aspects. The national drug regulatory authorities have also introduced four procedures: breakthrough therapy, conditional approval, priority review, and special drug approval, to accelerate the market launch of innovative drugs.

Currently, both the commercialization and regulatory pathways for CGT drugs have been cleared, and the CGT drug market is set to enter a period of rapid development in the future.

As of the end of November 2022, the National Medical Products Administration has approved more than 200 clinical trial INDs for CGT drugs, but only a few have progressed to registration clinical phase II or pivotal clinical studies. The indication distribution of CGT drugs is also concentrated in the cancer field. How to stand out in competition, rapidly advance registration clinical studies, and achieve future commercial success are important issues that many companies need to consider.

Figure 5: Sub-sectors of CGT drugs under development in China

Data source: Clinicaltrials.gov, analysis by Frost & Sullivan

In the face of the above situation, how should CGT enterprises respond?

Firstly, it is necessary to aim for clinical value, select differentiated indications, and rapidly advance towards commercialization. Taking CAR-T drugs as an example, the two products approved for marketing in China are both in the field of lymphoma, while there are no products approved for leukemia, another popular research area for CAR-T, in China. B-ALL is one of the common hematological malignancies, with adult patients generally having a worse overall survival than children. The recurrence rate after initial treatment of adult B-ALL is high, with about 60% of patients eventually progressing to relapsed/refractory B-ALL. Patients with relapsed/refractory B-ALL have an extremely poor prognosis, with a lack of effective clinical treatment methods, and a survival period of only 2-6 months. There is a huge unmet clinical need for new effective treatments to extend patient survival and improve their quality of life.

Considering the unmet clinical needs among adult r/r B-ALL patients in China, as well as the absence of domestically approved original targeted CD19 CAR-T cell products, Hycelene Injection from Hengyuan Biology was included in the 'Breakthrough Therapy Drug (BTD)' category by the Center for Drug Evaluation (CDE) of the National Medical Products Administration (NMPA) in 2020 due to its outstanding efficacy and safety in Phase IIT and Phase I/II clinical trials. Hycelene Injection entered pivotal registration clinical studies domestically first, and as the first CAR-T drug to submit an NDA in China's leukemia field, it is expected to bring breakthrough treatment options to the domestic leukemia patient population and provide new effective treatment options for a large number of r/r B-ALL patients.At the same time, given that there are no other CAR-T drugs from enterprises in this same indication that have entered the critical clinical research phase, it is speculated that Herceptinib will have a relatively long market exclusivity period after its launch.

Due to the significant differences between the business model of autologous CAR-T drugs and traditional drugs, patients need to first collect immune cells from their blood at the hospital, which are then transported via cold chain to the cell drug production base for T cell isolation, activation, gene transduction modification, amplification, and testing before release. After that, they are transported via cold chain back into the body. The entire process requires collaboration between enterprises and medical institutions to establish a standardized quality system that runs through the entire process.Therefore, the close collaboration between CAR-T companies and clinical end-users has become an important factor influencing the ultimate success of product clinical applications.

Since its establishment, He Yuan Biology has reached a deep strategic cooperation with the largest national-level research-oriented hematology professional medical institution in China that integrates medical treatment, scientific research, teaching, and industry (Institute of Hematology, Chinese Academy of Medical Sciences). Both parties have jointly formulated a full-course management plan and standardized operating procedures for CAR-T therapy, including patient screening, CAR-T preparation, treatment, effectiveness and safety monitoring, follow-up, etc. At the same time, key clinical studies on Hyceltinib for adult r/r B-ALL are being conducted at 10 top-level hematology clinical centers across the country, accumulating rich clinical practice experience and laying a solid foundation for the future commercial clinical application of Hyceltinib.

On the other hand, the currently approved CAR-T drugs are all autologous cells, which are individualized and customized medications. They are characterized by being time-consuming, having high technical barriers, costs, and prices. Therefore, how to reduce costs, improve affordability, and ensure commercial supply has become another challenge for enterprises.

According to literature reports, the cost of producing a single dose of autologous CAR-T drug overseas is about $80,000, of which more than half is the cost of raw materials such as culture medium, plasmids, ribozymes, and viral vectors used for CAR-T culture and transduction. The remaining costs mainly include manual operations and testing involved in the production of CAR-T drugs, as well as the facilities and equipment required for production. The high cost directly drives up the price of CAR-T drugs abroad, greatly limiting their accessibility. In China, it is also necessary to actively build an innovative payment system to improve the accessibility of high-value CAR-T drugs and enhance patients' affordability.

Figure 6 Analysis of the Production Cost of Autologous CAR-T Drugs

Data source: 'Cost analysis of vein-to-vein CAR T-cell therapy: automated manufacturing and supply chain', Frost & Sullivan analysis

The advancement of cell gene therapy drug production technology directly affects cost control. Technological innovation breakthroughs, process optimization, raw material usage, production time control, automation level, success rate, and the reliability of quality testing all impact the final cost of the drugs.Excellent automation processes can reduce production time while lowering target costs across various automation stages. They also improve cell recovery rate, viability, purity, and stability, thereby achieving high production efficiency, reduced production costs, and enhanced product quality. At the same time, with future technological breakthroughs and development by domestic manufacturers, the upstream equipment and raw material markets are gradually maturing. With the help of mature supply chain management, the production costs of drugs can be further reduced.

Hepigenetics Biologics has an advanced process platform for cell drugs such as CAR-T, independently developing its own Hyclopegen therapy process and quality control system, including serum-free cell culture systems and closed automated production processes. The success rate of production for ALL indications has reached 100%, endowing the product with a breakthrough cost advantage and laying the foundation for rapidly occupying the market in the future. At the same time, Hepigenetics Biologics will also actively position itself to enter national medical insurance in the future, leveraging its low-cost advantage to break through the bottleneck of 'high price, limited supply' for CAR-T drugs, thereby improving the affordability of its own products.

Currently, all marketed drugs are autologous CAR-T therapies, which follow an autologous and customized process and cannot be mass-produced like traditional drugs. Therefore, since the first product was approved for market in 2017, CAR-T drugs have been a 'hot commodity' in the market due to capacity shortages. CAR-T drug manufacturers, including Novartis, Gilead Sciences, and Bristol-Myers Squibb, have all expressed the sweet dilemma of 'supply falling short of demand' due to CAR-T drugs. To address the 'gap' in capacity, several CAR-T manufacturers have begun to build new factories to further improve the commercial production and supply of CAR-T drugs.

To meet the needs of Chinese patients, Heyeon Biosciences has made early arrangements. In 2021, it obtained the first 'Drug Production License' for cell-based drugs in Tianjin. Currently, it owns a commercial production base for immunocyte drugs that meets GMP standards and covers an area of 7,000 square meters. It is expected to achieve commercial production and supply for 2,000 - 3,000 patients. In addition, Heyeon Biosciences is also planning and constructing a new production base capable of supplying 5,000 patients.

Currently, cell gene therapy drugs have become a track where China is 'heading in parallel' with European and American countries in the field of biomedicine. Establishing an international cell gene therapy center based in China is a practical approach to seize the high ground in the future global innovation and development of cell biology technology. It holds significant implications for promoting the development of the national biomedicine and big health industries.Taking CAR-T drugs as an example, compared with the high price of over $400,000 per injection in overseas markets, the two approved products in China are priced at 1.2 million yuan, which is a significant reduction from the prices of foreign products. This will provide an opportunity to attract overseas patients to receive CAR-T treatment in China.

The world's leading R&D and production technologies, internationally unified Good Manufacturing Practice (GMP) for cell therapies, price advantages, and national policy support will accelerate China's transformation into a center for cell and gene therapy research and treatment, attracting a large number of overseas patients. Since the beginning of this year, local governments have successively introduced a number of policies to encourage the development of the cell and gene therapy industry, resulting in the establishment of several clinical application centers for cell and gene therapy such as Zhangjiang Gene Island and Binhai Cell Valley.

It is understood that Heyuan Biotech plans to cooperate with the Chinese Academy of Medical Sciences Hematology Hospital to build a global cell therapy center. Leveraging China's policy, cost, and industrialization advantages, it aims to become one of the world's top centers for immune cell therapy and attract overseas patients to seek medical treatment in China.

Continuously improving the accessibility of cell gene therapy drugs and enabling patients to receive CAR-T drugs with outstanding efficacy in a timely manner is one of the important goals of various companies during their commercialization process. Since 2021, cell gene therapy drugs have been gradually included in the people's welfare insurance programs of various provinces and cities in China. Insurance companies have also successively launched several "million-yuan medical insurance" policies covering cell gene therapy drugs, with relatively high treatment reimbursement ratios. In addition, in order to enable more advanced and effective innovative drugs to benefit more patients, the National Healthcare Security Administration has achieved "volume-based pricing" through healthcare negotiation. In the future, with the establishment of a sound social security mechanism in China, the "combination punch" of national healthcare insurance and commercial insurance will also include more innovative drugs, thereby further enhancing patients' accessibility to new technologies and therapies.

Overall, cell drug companies that have differentiated products oriented towards clinical value, occupy a clinical terminal advantage, possess cost advantages, and have the capability for large-scale commercial production and supply, as well as globalization, can become leading enterprises in the CGT drug market, achieve commercial success, and attract capital markets.

In recent years, the concept of universal CAR cells has gradually moved towards clinical validation and has made significant breakthroughs in terms of efficacy and safety. Currently, the rapid development of universal cell gene therapy technology pathways mainly includes universal UCAR-T that applies gene editing technology and natural universal immune cell technologies represented by NK cells and γδ T cells.

Guided by the needs of patients, the basic starting point for developing efficient, safe, and accessible generic cell 'off-the-shelf' drugs is the establishment of a generic UCAR-T technology platform by Heyeon Biosciences, which is currently conducting in vitro and in vivo research to lay a solid foundation for the first human clinical trial. At the same time, Heyeon Biosciences is also collaborating with the Blood Research Institute to develop an iPSCs-NK generic cell technology platform and with Beijing Jiadehe Cell Therapy Technology Co., Ltd. to develop a γδT generic technology platform, aiming to drive the development and output of more types and targets of generic cell drugs.

At the same time, Heyeon Biosciences has established three technical platforms: the CAR platform, the gene editing platform, and iPSCs. The CAR platform can develop single or multi-specific CAR constructs, which can be distributed among various types of immune cells, exerting a powerful anti-tumor effect; the gene editing platform is an indispensable tool for cell modification, capable of performing efficient, precise, and cost-effective gene editing; the iPSCs platform can solve the problem of cell source, inducing somatic cells into a state of pluripotent stem cells and differentiating them into various immune cells such as T cells, NK cells, macrophages, etc.

Through the integration of three major technology platforms, on one hand, it enables Heyeon Biosciences' drugs to move from autologous to generic, significantly reducing the production cost of cell gene therapy drugs and thereby improving patient accessibility; on the other hand, Heyeon Biosciences has also established a pipeline covering different types of cell gene therapy drugs for treating hematological tumors, solid tumors, and even extending to more disease areas such as autoimmune diseases and viral infections.

With the continuous development and innovation of biotechnology in China, the innovation capabilities of Chinese enterprise R&D teams are also constantly enhancing. Coupled with regulatory policies gradually aligning with international standards, in the long run, it is imperative for Chinese innovative drugs to go global. Currently, there are mainly two models for domestic innovative drugs going global: independent overseas development and License-out models, both of which have been successfully explored by enterprises.

In 2019, BTK small molecule inhibitor BeiGene's Zanubrutinib (BTKi) was approved by the FDA for marketing in the United States and began commercial sales in November of that year, becoming China's first innovative drug to be successfully commercialized in the US. As of November 2022, BeiGene's BTKi has been approved for marketing in 58 markets including China, the United States, the European Union, the United Kingdom, Canada, Australia, South Korea, and Switzerland.

Similarly, in the field of cell gene therapy drugs, China has also seen successful cases of its CAR-T drugs going global. In 2017, Johnson & Johnson received a prepayment of $350 million to acquire a 50% overseas equity and a 30% equity in China for the Legend Biologics' BCMA CAR-T drug (Sidelumab injection). On February 28, 2022, this drug was approved by the FDA for marketing in the United States to treat patients with relapsed or refractory multiple myeloma (r/rMM), marking the first successful global launch of a cell gene therapy drug from China. Subsequently, Sidelumab injection was approved for marketing in the European Union and Japan. Additionally, several companies have conducted international multi-center clinical trials overseas, laying a solid foundation for the global launch of domestic CAR-T drugs.

Since its establishment, Heyeon Biosciences has been based in China, looking towards the global market, and continuously implementing a globalization development strategy. It is understood that all products under research by Heyeon Biosciences have global intellectual property protection and global rights, and they also adopt a dual-report strategy between China and the United States. The core product, Herceptinib Injection, has obtained orphan drug designation from the US FDA. Based on its high-quality clinical data in China, it is preparing for an IND application with the FDA, aiming to achieve the first targeted CD19 CAR-T drug approved for marketing in China. Through various commercialization models, it is committed to maximizing the commercial value of its products. It is hoped that more priority enterprises like Heyeon Biosciences will accelerate the industrialization process of cell and gene therapy in China, solidly elevate the international status of innovative Chinese drugs, and highlight the important role of Chinese innovative pharmaceutical companies with independent research and development in the global competition landscape.

In summary, cell gene therapy drugs represented by CAR-T are leading a robust growth of 'next-generation' innovative drugs. Driven by the continuous expansion of indications, the opening up of regulatory pathways in multiple regions around the world, improved payment capabilities, and continuous improvement in production capacity and commercial supply, sales are growing at a high rate, with commercialization on the horizon.

Against this backdrop, Heyeon Biosciences holds the world's first CAR-T drug for leukemia, which has been approved for market launch in China. It already possesses core elements of commercial success such as excellent clinical data, terminal clinical advantages, cost advantages, an affordable system, and guaranteed commercial production supply. Building on the rapid commercialization of its first core product, Heyeon Biosciences continues to strengthen its technological innovation capabilities, advancing in pipeline layout across multiple disease areas and globalization. It is deploying markets both domestically and internationally, serving patients in China and globally, and steadily moving forward on its journey to become a global leader in cell and gene frontier innovation-driven biopharmaceuticals.