Trade, IP And Oncology Deals: What You Need To Know About China And JPM20
Executive Summary
China was a focus of discussions at the 2020 J.P. Morgan Healthcare Conference, as a Phase One trade agreement was signed to end a 17-month dispute with the US. Patent linkage and IP protection enforcement are also being closely watched, while Chinese firms including BeiGene continue to make strides in oncology deal-making.
While biopharma executives, investors and deal-makers are busy presenting at the J.P. Morgan Healthcare Conference in San Francisco, global political attention is fixating on a deal signed thousands of miles away.
On 15 January, representatives from China including Vice Premier Liu He and US President Donald Trump officially signed a "Phase One" trade agreement to end a year-long dispute.
The deal, described by Larry Kudlow, director of the US National Economy Advisory Council, as "historic" and something that "has never happened before" achieved half of what the US had requested, said the White House's top economic adviser in a television interview.
As the world’s two largest economies loosen up and ease their trade tension, observers of the biopharma sector are watching for related signs of strengthened patent linkage and intellectual property (IP) rights protection in China, now the globe's second-biggest single country pharma market. The country has agreed to do this as a key part of the new deal and to boost overall US imports by $200bn above 2017 levels.
The wording of the deal has a special section devoted to patents and data protection for pharma-related goods. The intention is to “Establish a mechanism for the early resolution of potential pharmaceutical patent disputes, including a cause of action to allow a patent holder to seek expeditious remedies before the marketing of an allegedly infringing product, so that innovative pharmaceutical companies can effectively enforce their rights in China,” it states.
The agreement also requires China to “provide patent term extensions to compensate for unreasonable patent office and marketing approval delays that cut into the effective patent term. And permit the use of supplemental data to meet relevant patentability criteria for pharmaceutical patent applications."
The US meanwhile has pledged to halve some of the new tariffs it had imposed on Chinese imports of all types.
One legal expect predicted the new trade agreement will strengthen IP rights enforcement in China. Tony Chen, a partner at law firm Jones Day’s Shanghai office, noted at a 12 January seminar on the sidelines of the JPM conference that a lack of such IP protection and patent linkage had led to a steady increase in compulsory approvals of generics in China, despite the non-expiry of the patent for the original drug.
In recent years, China's National Medical Products Administration (NMPA) has issued multiple approvals in such cases, including for several best-selling products such as gout drug febuxostat, originally developed by Japan's Teijin Pharma Ltd. and commercialized in China by Astellas Pharma Inc. China has already approved three febuxostat products from domestic firms including domestic heavyweight Jiangsu Hengrui Medicine Co. Ltd.
Given that US trade and pharma industry representatives have emphasized that IP enforcement (in general) is a key request in any trade deal with China, Chen said the Phase One pact is expected to enhance patent linkage and prevent such compulsory generic approvals.
Others are less optimistic about the new deal. “The two sides have reached a deal simply by avoiding the difficult issues like intellectual property protection in China,” said Mark Williams, chief Asia economist at Capital Economics, in an interview with NBC News. “China has no desire to change the way its economy operates.”
Market exclusivity is another key aspect. It has been reported that China may give US biologic drugs a seven-year exclusivity period, although this change remains to be confirmed.
BeiGene, Oncologie Sign Deals
Trade deal aside, biopharma companies from China eyeing the global market are on a roll, signing deals with both US and European companies in parallel with the JPM meeting.
BeiGene Ltd., riding a wave of two recent new drug approvals in the US and China, signed two licensing deals in one week to kick start 2020. The Beijing-based firm first collaborated with Leap Therapeutics Inc. for an option to develop and commercialize Leap's lead anticancer asset DKN-01 in the Asia Pacific Region, excluding Japan. (Also see "Asia Deal Watch: BeiGene Leaps Into New Year By Licensing DKK1 Antibody Candidate" - Scrip, 10 Jan, 2020.)
The two also plan to combine DKN-01 with BeiGene's anti-PD-1 antibody tislelizumab, recently approved in China as the country's sixth such drug. Leap in exchange will invest in a $27m equity financing by BeiGene along with other institutional investors. (Also see "After US Approval, BeiGene Set To Gain Sixth PD-1 Green Light In China " - Scrip, 19 Nov, 2019.)
Days later, BeiGene signed a deal with EUSA Pharma, obtaining exclusive rights to the European specialty firm’s orphan biological drugs Sylvant (stoximab) and Qarziba (dinutuximab beta) in Greater China. BeiGene will fund and conduct clinical development and filing of these drugs in return for upfront and commercial milestones of up to $160m plus tiered royalties. (Also see "Asia Deal Watch: BeiGene Gets Chinese Rights To Two EUSA Rare Disease Therapies" - Scrip, 16 Jan, 2020.)
Boston and Shanghai-based Oncologie Inc. on 13 January announced a collaboration with Mereo BioPharma Group PLC to develop and commercialize navicixizumab, an anti-DLL4/VEGF bispecific antibody currently in a Phase Ib study in combination with paclitaxel in patients with advanced heavily pretreated ovarian cancer.
Mereo will receive $4m upfront with an additional $2m conditional on a chemistry, manufacturing and control milestone and will be eligible for up to $300m in clinical, regulatory and commercial milestones, plus tiered royalties ranging from mid-single-digit to sub-teen percentages on global annual net sales.
While it is hoped the signing of the Phase One US-China trade deal will bolster the economies of both countries with more certainty, many executives at JPM believed that a true global focus and active collaboration will still be needed to succeed.