Under the trend of accelerating population aging, has the medium-and long-term investment logic of biomedicine changed? Has biomedical investment peaked in the short term? What is the main reason behind investors becoming rational? Which sub-tracks are still worthy of attention? A series of problems have become the focus of the layout.
In this regard, Xu, chairman and president of Medicine, pointed out in an interview with 2 1 Century Business Herald that biomedicine is a risky industry by its own attributes, and the layout logic of the biomedical market has not changed. Facing the current dilemma of biomedical market, it is very important to get out of the road of differentiation.
Pursuing long-term investment in the primary market does not mean that this year's investment will be rewarded next year, and the creation of new drugs will inevitably have a long process. The secondary market is profit-seeking. If the overall situation is not good, it will be a challenge to biotechnology. I don't have a standard answer, but I'm not worried. We are really making innovative drugs to solve the unmet clinical needs. As long as we continue to push forward the project and improve the R&D capability and overall enterprise strength, I think it will be recognized by the market. And the overall environment will pick up one day, and the sunshine is always new. Xu said that in such a vast environment, any enterprise must have its own independent opinions if it wants to make innovative drugs. We should take patients as the center, pay attention to the unmet clinical needs, avoid homogenization competition, and fully tap the clinical value of innovative drug development.
R&D, commercialization and capital are all restricted.
With the continuous popularity of innovative drugs, more and more enterprises have entered the track of innovative drugs industry, and the problem of intensified competition in the industry is inevitable, resulting in industry chaos such as target gathering, crowded track and serious involution. After experiencing a wave of rapid development, the development of innovative pharmaceutical industry in China has encountered a bottleneck period. The White Paper on the Development of Innovative Pharmaceutical Enterprises in China in 2022 issued by KPMG points out that innovative pharmaceutical enterprises in China are facing the pressure of R&D, commercialization and capital.
According to the investment and financing data disclosed in the medical Rubik's Cube database, the investment and financing trend in the medical and health field slowed down in the first half of 2022. In the first half of 2022, there were ***632 investment and financing events in China's medical and health field, and the disclosed investment and financing amount was 1 152 billion yuan. Among them, there were 583 investment and financing events in the primary market, with an investment and financing amount of 67 1 100 million yuan; 30 IPO events, financing 35.7 billion yuan; There were refinancing events in the secondary market 19, and the refinancing amount was12.4 billion yuan. Overall, in the first half of 2022, the number of investment and financing events in the primary market decreased by 46.7% year-on-year and 45.9% quarter-on-quarter; The number of IPO events decreased by 45.5% year-on-year and 55.2% quarter-on-quarter; The number of refinancing events in the secondary market decreased by 57.8% year-on-year and 29.6% quarter-on-quarter.
As far as R&D is concerned, the whole R&D ecosystem composed of enterprises, R&D institutions/schools and the government is not yet mature, and there is still much room for improvement in capital investment, research foundation and policy support for innovative drug research and development. At the same time, compared with generic drugs, innovative drug research and development itself has the problems of long cycle and high cost, which makes new drug research and development enterprises face dual pressures from themselves and the outside world.
Xu pointed out that compared with foreign countries, China's current integration with Industry-University-Research is not enough. In recent years, with the country's emphasis on new drug research and development, basic research and source innovation have been mentioned more and more. In fact, we don't lack some key technologies and have a research foundation, but we still need to improve the transformation of Industry-University-Research. There is a certain gap between the education of pharmaceutical universities in China and the actual development of innovative drugs. Innovative drugs are a brand-new goal. Universities start research after discovering new goals, but the commercialization of research results is completed by enterprises. If the cooperation between domestic basic research and pharmaceutical companies can't keep up, it will affect the research and development of new drugs in China.
At the same time, according to the data of KPMG white paper, from the time point of view, it often takes 3-6 years for a new drug to screen compounds and determine the final developed compounds through preclinical research. Then, the first, second and third clinical trials of drugs will take 6-7 years. If the clinical research results are good, the approval process for applying for listing often takes 0.5-2 years. The average cycle of an innovative drug from project establishment to final listing is usually 8- 10 years.
From the perspective of R&D investment, the clinical research stage is the stage that consumes the most funds in the R&D cycle of innovative drugs. Taking the research and development of innovative drugs in the field of cancer as an example, according to relevant data, the average research and development cost from phase I to phase III clinical trials is as high as $2.6 billion. In recent years, the average research and development cost of innovative drugs has a very significant upward trend. In the current environment of innovative drug research and development, the investment in innovative drug research and development is undoubtedly huge.
After determining the R&D project, our R&D team will continue to optimize and test a series of characteristics such as activity and selectivity of the target. If IND is successfully approved, it will take three or four years and tens of millions of investments. Xu said.
Not only research and development, but also the commercialization of innovative drugs. The pressure of commercialization is reflected in the following aspects: first, the coverage capacity of primary medical institutions is insufficient, which makes it difficult for innovative drugs to enter the primary level for many reasons; Second, the tightening of medical insurance fund control fees and the difficulty of long-term hospitalization have blocked the main market access channels for innovative drugs; Third, based on the consideration of commercial survival and development, enterprises focus on drug research and development goals, product homogeneity is serious, and commercial competition is intensified.
In addition, in order to further strictly regulate enterprise innovation, China's medical policy requirements are higher, and the market attitude of enterprises relying on licensein for IPO has also changed. The expected value of capital to innovative pharmaceutical companies has decreased, and the secondary and primary markets of the pharmaceutical industry have cooled down one after another, making it more difficult for innovative pharmaceutical companies to raise funds and increase their survival pressure.
Can going out to sea meet the challenge of China market?
Due to the price and product involution, many enterprises choose to develop their living space through the international layout of going out to sea. However, according to GBI's survey, even if everything is ready, innovative drugs will inevitably encounter twists and turns in the long journey to sea. February 2002165438 Punabulin's application for listing in the United States was frustrated. The FDA pointed out that the registration test results provided by Punabulin are not enough to prove its benefits, and additional controlled trials are needed to provide substantive evidence to support CIN indications. On the day of the announcement, affected by this incident, the US stock price of Wanchun Pharmaceutical plummeted by 6 1%.
The White Paper of China Pharmaceutical Companies Going to Sea points out that going to sea means entering global competition, and technical barriers bear the brunt. Product competition cannot be compared with domestic competition, and it needs absolute advantage. Drug testing data has been strictly certified and recognized by authoritative organizations such as FDA, which is a prerequisite for enterprises to go to sea. As an international authority that holds the power of life and death of drugs in the American market, the clinical data of drugs, that is, their effectiveness, safety and absolute advantages compared with existing drugs, are important evaluation points for FDA to approve new drugs. Therefore, trying to enter the American market by means of price advantage may have little chance of winning. This is because the drug price system and drug clinical data in the United States are two independent management systems.
At the same time, new challenges such as capital, speed and talents have followed. In the contest with the capital market, the World Bank released the report "Promoting Innovation in China-Best International Practice", and put forward nine specific suggestions, the main points of which include: strengthening basic scientific research and investment. NIH and NSF in the United States are responsible for 60% of the annual funds for basic scientific research. Compared with 20 17, 17% of RD in OECD countries is invested in basic scientific research, while less than 5% in China. The report "Ten-year Prospect of Pharmaceutical Innovation in China" points out that in the next ten years, the strength of capital should gradually tilt to the early stage of R&D and achievement transformation, and the investment ideas should be promoted from a more professional, earlier and more rational perspective.
Going out to sea is a race against time, and speed is one of the key elements. The White Paper of China Pharmaceutical Companies Going to Sea points out that the first drug listed in the world can win 64% market share, followed by 25% on the premise of little difference in efficacy. After the third place, unless the entrants gain a breakthrough advantage, they will get little share in the global market.
In terms of talents, the White Paper of China Pharmaceutical Enterprises Going to Sea pointed out that one of the reasons for the rapid development of China medicine in recent years is that China has made remarkable success in cultivating and introducing high-end biomedical talents, and some talents have emerged that can lead breakthrough innovation, although the number has not yet formed a scale. Going to sea is a big test of the multi-dimensional comprehensive strength of local pharmaceutical companies in research and development technology, clinical experience and layout, transnational cooperation and negotiation, communication with international regulatory authorities, international resources, global market strategic layout, financial resources and so on. Compound innovative high-end talents with global vision are the key to steer and sail.
I have my own understanding of the repeated setbacks of local innovative pharmaceutical companies going out to sea. In view of the frustration of many local pharmaceutical companies in the FDA of the United States, Xu believes that it is not only the drug standards, but also the market environment. According to the previous standards, domestic enterprises conducted clinical trials in China and achieved curative effects. In the United States, there is no difference between China and the United States, so there is no need to conduct the same experiment in the American population. Now, it will take 3-5 years for the FDA to let China enterprises conduct phase III trials in the American population again, and it will cost a lot of money. In 3-5 years, many similar drugs have been approved in the United States. This is a new challenge for domestic enterprises. Similarly, if the road to the United States doesn't work, you can consider going to sea in Europe, Japan and Southeast Asian countries. These markets are also very broad and friendly, so we need to open our minds and horizons.
Adhere to the road of differentiation.
For the current innovative pharmaceutical companies, it has to be said that the breakthrough of innovative drugs needs to be patient-centered, pay attention to the quality of life of patients and their expectations for disease treatment, and emphasize the need of patients throughout the whole process of drug research and development from the overall level; At the same time, we should be guided by clinical value, pay attention to the unmet clinical needs, avoid homogenization competition, and fully tap the clinical value of innovative drug development. Differentiate the layout by laying out new goals, iterating R&D technology and changing development strategies, and at the same time, differentiate the marketing by tapping the individual needs of patients and doctors.
With the intensification of competition and rising costs, it has become increasingly difficult to obtain foreign projects through' Buy in buy buy' in the past. For domestic enterprises,' buy buy Buy' is not a long-term solution. Insisting on independent innovation is the only way. Xu also believes that in such a vast environment, any enterprise must have its own independent opinions if it wants to make innovative drugs.
The goal is not afraid of competition, but of being exactly the same as others. If there are dozens of the same drugs, re-homogenization competition not only wastes resources, but also has limited market space when it is approved for listing. CDE has put forward a firm policy to encourage high-level and differentiated innovation, which puts higher demands on us. Xu said that even if the goal remains the same, there must be innovation. But don't be afraid, innovation is everywhere. For example, if intravenous injection can be developed into oral medicine, it can also improve the convenience of medication for patients. For example, PD- 1 used to be intravenous injection, but now subcutaneous injection is popular, which is innovation. Subcutaneous injection can be done at home by yourself, but intravenous injection must be done by a doctor. From injection to oral administration is also an innovation, and oral administration is relatively more convenient. Therefore, innovation is not necessarily in the project, nor in the treatment method.
In addition, pharmaceutical companies need to comprehensively consider the manufacturing and innovation of target drugs and the demand of China market when considering innovation. For example, when choosing the target, we must consider the innovation of the target. The new target, I didn't know whether it could be made into medicine at first, but once it was made, it was the first one. Some targets gradually mature, for example, the medicinal properties can reach 30% and 40%. Maybe pharmaceutical companies are the first to go in, or they may not be the first to go in. There is a balance here.
It is more important to know the market in China and the needs of patients in China. For example, ABSK02 1, we know that this compound can treat giant cell tumor of tendon sheath, because its mechanism can be explained clearly, so the indication will be formulated after this compound comes out, giant cell tumor of tendon sheath is one of the indications, and there are other tumors. Later, we found that there were no related drugs in the domestic market, and there was no standard treatment except surgery, so there was clinical demand in China. Xu said that once the goals are set and the targets pursued are clear, a lot of investment is needed.
Xu is very confident about the future of innovative drugs in China. He believes that China's innovative drugs have just entered the harvest period, and innovative pharmaceutical companies need real independent innovation in order to truly be first-class. Both the primary market and the secondary market will have confidence and cannot be exactly the same. Even if the goals are the same, there must be innovation.
At the same time, the layout of pharmaceutical companies in China also maintains a sense of urgency in the research and development of new drugs. The research and development of an innovative drug means long-term investment. Ten years is a marathon. We can't relax in this marathon. If you relax a step, maybe this project will fall behind, and if you fall behind, there may be no chance. Xu said that in terms of team quality, scientists in China should have feelings and do things urgently needed by society.
If we can make new drugs one by one, the advantages of new drugs will be recognized by the secondary market. Xu said that the original intention was to solve the unmet clinical needs. Therefore, with the promotion of pipeline research and development and the improvement of commercialization ability, the company's valuation will inevitably increase. As long as the medicine is prepared in a down-to-earth manner, with the stability of the whole biomedical situation, the lost valuation will come back.