The pharmaceutical landscape is undergoing a powerful shift as Chinese biotech firms begin to gain traction on the international stageLast September, an innovative dual-target drug developed by a Chinese company raised eyebrows by outshining the famed oncological drug known as “Drug K”. This breakthrough sparked a frenzy in the financial sector, particularly on Wall Street, where the stock price of the American company that acquired the rights to this drug skyrocketed by 160% in just one weekYet, in contrast, the Chinese firm saw its shares on the Hong Kong stock exchange rise by less than a third of that percentage, highlighting a significant valuation gap between the two markets and captivating the attention of investors and market analysts alike.
As we look forward to the future of pharmaceutical innovations, January 24, 2023, marked a significant milestone when one of these pioneering companies, Ascentage Pharma, known by its stock symbols 06855.HK and AAPG.O, rang the bell on NASDAQ, making it the first biotech firm to be listed in the US for the year 2025. Such feats underline the ambitions as well as the challenges faced by Chinese enterprises in the global market.
As Sheng Pharma's chairman, Yang Dajun, noted recently during a media interview, the perception of Chinese biotech firms differs vastly between local and international investorsWestern investors are primarily interested in the integrity and effectiveness of the clinical trial data, the uniqueness of clinical research projects, and the long-term strategy of the companyDomestic investors, however, frequently focus on business development and licensing advancementsThis difference in priorities has important implications for how companies position themselves both at home and abroad.
Yang elaborated that American investors particularly prioritize two aspects when evaluating potential investments: the global patent status of the company’s drugs and the number of clinical trials that have been approved by the US Food and Drug Administration (FDA). Without a robust patent portfolio, Yang stated, foreign investors would be hesitant to commit any funds.
Aspercentage Pharma was established in 2009 and made waves in 2021 when its first medication, an innovative drug named Rilzabrutinib, was approved
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This approval was especially significant as it addressed a critical need for patients in China suffering from chronic myeloid leukemia (CML) with a T315I mutation, a condition that had long remained untreatableThis drug became China’s first approved third-generation BCR-ABL inhibitor and the second globally, paving the way for further innovations.
Another promising product under Ascentage's banner is the Bcl-2 inhibitor APG-2575, which the company is currently pursuing in China for new drug application approvalDeveloping drugs targeting the Bcl-2 protein presents unique challenges due to the complexity of the target, but successful commercialization could position APG-2575 as the world’s second marketed Bcl-2 inhibitor.
As we enter 2023, discussions have surfaced about whether Chinese biotechnology has reached a "DeepSeek" moment, especially given the relatively low-cost and high-efficiency landscape of biopharmaceutical development in ChinaAccording to data from the American investment bank Stifel, as much as one-third of all licensing deals made by large pharmaceutical companies in 2024 are expected to come from China, a dramatic increase from just 12% two years priorHowever, the number of innovative Chinese drugs achieving direct overseas market approval remains limited, with none appearing among the twelve pharmaceuticals projected to surpass the $10 billion sales mark globally in 2024.
One of the key hindrances for Chinese drug manufacturers looking to take their products overseas is the necessity of conducting clinical trials abroad—a costly and credibly demanding endeavorMany companies find themselves grappling with daunting barriers, such as market access, sales channels, and brand recognition as they attempt to make significant inroads into international marketplaces.
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With a growing number of these companies developing competitive innovative products, they are increasingly attempting to leverage established relationships with internationally recognized pharmaceutical companies to cut through the noise and enhance their prospect of successful market introductionThrough strategic collaborations, these Chinese enterprises can draw on the established resources and expertise of their partners, assisting them in navigating the complex landscape of international sales and marketing.
The strategic licensing agreement stands to deliver critical financial backing to Ascentage, enabling them to rediscover and commit resources toward further research and development initiativesFurthermore, by utilizing Takeda's robust platform, Ascentage can accelerate the international rollout of Rilzabrutinib, enhancing the drug's overall global footprintThis landmark transaction may serve as an inspiring reference point for other domestic biotechnology firms seeking to pursue similar international collaborations, thus spurring an increased investment in research and development and reinforcing China's integration into the global biopharmaceutical marketplace.
Yang Dajun emphasizes that from the very inception of the company, their objective has been to specifically target unmet clinical needs worldwide by developing genuinely innovative drugs—aiming for first-in-class or best-in-class designs rather than opting for the faster route of imitation
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