Hunger Game: Hengrui Hunts New Cancer Drug With $200m BeyondSpring Tie-up
Executive Summary
Hengrui’s second major in-licensing deal this year is the latest example of the Chinese pharma innovation darling’s eagerness for new assets, particularly as some of its other products come under pressure.
Jiangsu Hengrui Medicine Co., Ltd. has gone on a shopping spree for new drug candidates as the Chinese domestic pharma heavyweight finds itself in a drought for novel drugs.
The latest deal saw Hengrui dole out CNY200m ($31m) in upfront payment to obtain exclusive commercial and co-development rights in Greater China (China, Hong Kong, Macau and Taiwan) to Shanghai-based BeyondSpring Inc.’s plinabulin, a first-in-class, selective immunomodulating microtubule-binding agent, the company said on 26 August.
The total value of the deal rises to CNY1.3bn including regulatory and sales milestone payments. Hengrui also plans to invest CNY100m and take an at least 2.5% stake in Wanchunbulin, BeyondSpring’s subsidiary, with a pre-money valuation of CNY3.6bn. Wanchunbulin is BeyondSpring’s Chinese name.
Plinabulin is being developed for the prevention of chemotherapy-induced neutropenia (CIN) and the treatment of later-line, EGFR wild-type non-small cell lung cancer (NSCLC) in combination with docetaxel. Hengrui will cover all commercialization costs in its territories, while Wanchunbulin will be responsible for all clinical/regulatory costs for the first two indications and Hengrui for 50% of these thereafter. Wanchunbulin will book all plinabulin revenues in its markets.
The deal with Nasdaq-listed BeyondSpring is the second major alliance for Hengrui in 2021. In February, the biopharma announced it would acquire a 6.7% stake in Shanghai-based bioventure Yingli Pharma Limited for $20m, to gain exclusive commercial and co-development rights to the biotech’s PI3K delta inhibitor linperlisib (YY-20394) in Greater China.
At the end of June, Hengrui Medicine sat on cash and cash equivalents of CNY12bn, according to its interim financial report filed with the Shanghai Stock Exchange on 20 August.
US, China NDAs In First Half Of 2022
Apart from being developed as a therapy to prevent CIN, plinabulin is expected to play a major role in post-immuno-oncology inhibitor segment of NSCLC, according to an analysis by Informa Pharma Intelligence's Biomedtracker.
The drug triggers the release of the immune defense protein GEF-H1, which activates tumor antigen-specific T-cells and boosts hematopoietic stem/progenitor cells.
New drug applications (NDA) for the drug candidate in combination with docetaxel are expected to be filed with the US FDA and China’s National Medical Products Administration in the first half of 2022. These will be based on the positive findings from BeyondSpring’s DUBLIN-3 Phase III trial with registration intent in the setting of later-line EGFR wild-type NSCLC.
Plinabulin already has breakthrough designation in both China and the US for the CIN prevention indication.
On 4 August, BeyondSpring announced that the 559-patient study met its primary endpoint, showing statistically significant improvement in overall survival for the combination vs. docetaxel.
Hengrui Under Siege
Hengrui’s share prices have dropped by half from the all-time highs seen at the beginning of this year, after the company posted its first quarterly profit fall for the first time in years.
It attributed the poor performance to revenue drops for its generic drugs and anti-PD-1 antibody AiRuiKa (camrelizumab).
In 2020, Hengrui succeeded in enrolling its products in the Chinese government’s two price-cutting programs, namely the volume-based procurement (VBP) scheme and national drug reimbursement list (NRDL), which target generic and novel drugs respectively.
However, the sales of Hengrui's drugs in the two programs fell sharply in the first half of 2021 when these were rolled out. Revenues of its six generics in the VBP plunged 57% in the six months compared with the second half of 2020, while camrelizumab was hit when its price in the NRDL was slashed by 85%, the company noted in its interim financial report.