A little -known biotechnology company surprised the biopharmaceutical industry last spring when he declared an “unprecedented” achievement: his experimental medication in cancer seemed more effective than MerckK Keytruda in a clinical trial. The company, Summit therapyHe graduated the medication of the Chinese company Akeso Inc.
In October, a group of investors in Life Sciences announced that they were putting $ 400 million in the creation of a company called Kailera Therapeutics that would develop experimental obesity drugs that bought the Chinese company Jiangsu Hngui Pharmaceuticals.
Then, in a matter of days in December, Merck revealed that he would license to a potential Competitor of the Summit medication and a separate experimental obesity pill, both of the Chinese companies.
Suddenly, American companies are running to find medications in China. Almost 30% of Big Pharma deals with at least $ 50 million in Chinese companies last year, compared to 20% of the previous year and none only five years earlier, according to Delorma data.
“That is impressive for me,” said Chen Yu, founder and managing partner of the Crossover TCGX Fund. “That is impressive.”
Yu said 20 years ago, few Biopharmacy companies were interested in China because they considered it a small market. His former firm, Vivo Capital, was a pioneer in the concept of bringing medications to the Chinese market.
Today, the movement is in the opposite direction. He never imagined the proliferation that is taking place now.
Industry investors and experts offer some reasons for the trend: Chinese companies are creating better molecules than ever before, and more of them. They can start trying those compounds in humans before already a lower price than in the US. UU. Buyers have discovered a business model to essentially import medicines through license agreements. The financing of the company in China has also dried, forcing biotechnology companies to make agreements.
One thing in which all these people in the industry agree? This trend will not disappear.
What is less clear is what the development for the US biotechnology sector means.
Some people argue that it is terrible for new US companies if large pharmaceutical companies can find a promising medicine in China due to a price fraction. Others argue that competition improves everyone, and American companies will finally reap the rewards of bringing medications to the market. Anyway, the influx could remodel the landscape of the United States Biofarma Industry.
“It is a decisive moment in which the pharmaceutical industry is: 'We really do not need to buy biotechnics of us necessarily,” said Tim Opler, managing director of the Stifel Global Medical Care Group. “We will do it if it makes sense, but we can buy perfectly good biotechnology assets through license agreements with Chinese companies.”
Bain Capital Life Sciences began making China a priority around 2018, said Adam Koppel, a member partner. The private capital firm saw the Chinese government and the life science industry making a deliberate effort to evolve from its historical approach to the rapid imitators and drugs that the leading drugs imitated to create a new chemical matter that China could export to the rest of the world.
Since then, Bain has reached six biofarma agreements in China. Bought an experimental asthma drug from HENGURUI in 2023 and He co-a company called Aiolos with a financing round of $ 245 million. GSK acquired the company three months later for up to $ 1.4 billion.
Koppel sees more large pharmaceutical companies that feel comfortable with drugs that leave China while working with more of them and see their results, he said. Buyers had partially retained because they worried that China's data were not representative of a global population and US regulators would not accept it.
“As the assets see and then they leave, they are seeing things that are successful and, finally, as things approved and used in the market, I think that concern will decrease,” he said.
Piotr swat | LIGHTROCKET | Getty images
That narrative was exhibited when Summit Therapeutics last year said that his experimental cancer medication beat the mega-buckbuster keytruda of Merck in a face-to-face study, a feat that no other medicine has achieved. Summit's trial was held exclusively in China, causing people to question if the results would remain elsewhere.
When Summit's leaders were buying a drug they could develop, they set out to look in China because Co-Coo Bob Duggan had read more new medications in the country. But it was at the end of 2022, and the drug and food administration of the United States had just rejected some drug requests that were studied only in China, including one of Eli Lilly.
When Summit announced that he was licensed by the cancer medicine Akeso Ivonescimab, people questioned how Summit could make the agreement knowing that the FDA would never accept it, said the co-zo and president of Summit, Maky Zanganeh.
“And suddenly after us, many people opened their eyes,” he said.
Ivonescimab had already undergone early studies and was in late rehearsals in China when Summit reached the license agreement. Summit is now executing three global essays of phase 3 to satisfy the FDA's desire to study drugs in various groups of people.
Summit's strategy could become more common. Investors and other industry experts said that one of the raffles on making agreements with Chinese biotechnology companies is that they can find molecules that have already suffered early studies at a lower price than in the US Know what they are getting, and you can probably get less.
Head It spends a lot of time in China looking for assets as it does in the United States and Europe, the company's financial director, Andrew Dickinson, told CNBC. Gilead has seen a “substantial change” in the quality and quantity of assets that are developed in China and are offered to the United States Biofarma companies.
“The transformation in the last five years is real and impressive,” Dickinson said.
Help that more Chinese companies need to make offers now. The amount of risk funds collected by the Chinese biotechnology industry met only $ 1 billion last year of a peak of $ 6.3 billion in 2021, according to the data provided by the YU of TCGX.
“Why would we already do any initial stage development in the United States?” Yu said. “Why would we not get a clinical concept of concept in China and then bring it to the United States for the expensive clinical development when we really know that the medicine works? And I think that could be a new very revolutionary form so that our industry becomes more efficient “.
That is an opportunity, or risk, for the US biofarma industry. UU., Depending on who asked. Some, like Yu, see it as a way to reduce the price of prescription medications. Others worry, could hinder American companies if Merck and other large pharmaceutical companies transmit to acquire new US companies in favor of China's asset license.
A worker is working on a drug production line in the production workshop of a pharmaceutical company in Meishan, China, on January 30, 2024.
Nurphoto | Nurphoto | Getty images
On December that Merck announced that he was licensed an experimental pill of Obesity of Hansoh from China for up to $ 2 billion, shares of the US company Viking therapy 18%sunk. Viking is seen as an acquisition objective since he is developing drugs in the space of obesity to red live, and suddenly it seemed that a possible suitor had chosen to spend his money elsewhere.
People see parallels to what happened in the artificial intelligence space when China's deep declared that he had created a model that was as good as US models for much less than US companies are spending.
President Donald Trump or American policy formulators could see the similar tendency in biotechnology as a threat and intervene to stop these agreements, what Yu calls the risk of “stroke of a pen.” Last year, legislators floated the Bioseguro Law that would have restricted American companies to work with Chinese contract manufacturers.
Washington has already embraced Protectionist policies in other competitive areas such as artificial intelligence and semiconductors. It is possible that life sciences will be extended.
“Deepseek's deepest message is that we have competition in high science in general, and also that China is making large investments to develop scientific assets,” said Stifel.
In other words: the race in Biofarma is underway.
