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The cell therapy industry has been buzzing with good news
lately.
On October 19, GenScript Biologics announced that the BCMA CAR-T of its subsidiary Legend Biologics achieved net sales of 55 million US dollars in the third quarter, doubling from 24 million in the second quarter, and the total sales of the two quarters were about 570 million yuan (legendary biologics have a 70% interest in Greater China, in addition to 50% of the global interest), exceeding market expectations
.
On October 18, Keji Pharmaceutical issued an announcement: The State Food and Drug Administration has accepted the new drug application (NDA) for Zervoki Olencel Injection (BCMA CAR-T), which is expected to become the company's first commercial product and one of
the fastest domestic BCMA CAR-T products in China.
On October 18, Hengrun Dasheng submitted a draft IPO prospectus, intending to rush to IPO on the Science and Technology Innovation Board of the Shanghai Stock Exchange, planning to raise 2.
539 billion yuan (valuation of 4.
273 billion yuan after pre-IPO round); if it is successfully listed in the future, Hengrun Dasheng will become the "first A-share cell therapy share"
.
Looking through the prospectus of Hengrun Tatson, it is not difficult to glimpse the current opportunities and dilemma of the industry
.
1.
Commercial transcript and ultimate involution clinical pipeline
Commercial transcript and ultimate involution clinical pipeline
The difference between the medical payment end of China and the United States determines the different fate of
CAR-T track enterprises to a certain extent.
CAR-T track enterprises to a certain extent.
In the U.
S.
, Novartis' Kymriah, Gilead's Yescarta, and Legendary Biologics' Carvykti were priced at $475,000/needle, $373,000/needle, and $465,000/needle, respectively, with the former two achieving sales of $587 million and $695 million in 2021 (both approved for listing in 2017).
In China, the prices of Fosun Kate's Yikaida and JW Therapeuta were RMB1.
2 million and RMB1.
29 million/needle respectively, and since both were listed in 2021, they achieved sales of about RMB100 million and RMB30.
797 million respectively
.
According to the analysis of overseas volume curves, the sales of new CAR-T products are often tested in the 2nd to 3rd year, and in the first half of 2022, JW Therapeutics issued 77 Carteta prescriptions, achieving sales revenue of about 66 million yuan
.
It is worth noting that according to the 50% sharing clause between Legend Bio and Johnson & Johnson, the revenue
achieved close to 300 million yuan in the first two quarters after listing.
Aside from the patient's ability to pay factor, "extreme involution" may become the main theme of the future
.
.
Taking the most popular target CD19 as an example, the approved indications of iKaida and Carteyda are all diffuse large B-cell lymphoma (DLCBL, the indication with the largest number of new cases of lymphoma in China, belonging to B-NHL), and there are nearly 20 CD19 CAR-T products
in the clinical stage.
Investors inevitably have two questions: Are there enough patients? Can late-developing pipelines continue to promote clinical trials and go public under the CDE new policy?
In addition, there are not many treatment options for hematological tumor patients, and BTK inhibitors, which have long occupied the world's top 10 best-selling drugs, are also among them, and CAR-T therapy is currently generally approved as a third-line therapy, which strengthens the spiral trend of fewer patients; In order to solve this problem, overseas manufacturers have begun to attack the lower line, and the FDA has approved CAR-T cell therapy Yescarta for second-line large B-cell lymphoma patients
.
Why pan for gold in the desert? According to CIC's estimates, the global CAR-T product market size was US$1.
9 billion in 2021 and is expected to reach US$23.
1 billion in 2030.
The market in 2021 is the first year of commercialization of China's cell therapy market, and it is expected that the market size of China's CAR-T products will reach 5 billion yuan in 2025 and 32.
5 billion yuan
in 2030.
CAR-T enterprises that cannot go overseas and have no differentiation in their products will be very difficult in the next three to five years
.
.
2.
Cost-intensive solutions
Cost-intensive solutions
At present, limited by technological development, the CAR-T products on the global market are autologous CAR-T (immune cells need to be obtained from patients before treatment).
In order to solve the problems caused by the personalization of autologous CAR-T products, the global cell therapy research and development boom has focused on the field of "currency-type" therapies (such as allogeneic CAR-T, CAR-NK, etc.
), and most of the current research is concentrated in the first phase of clinical or pre-clinical, and it will take time
to reach the commercialization stage.
Therefore, autologous CAR-T is still one of
the best options to benefit blood cancer patients within 5 years.
So, where is the expensive point of autologous CAR-T products?
According to the literature in the International Journal of Cancer, the cost of producing a single serving of CAR-T cells is about $80,000
。 In the entire production process of CAR-T, the most expensive is the culture medium, plasmid, ribozyme, viral vector and other consumables used in culture and transduction of CAR-T, which occupies about 49% to 51% of the total cost.
The second is the consumables (QC), filling and surface treatment (Fill & Finish) required for quality control CAR-T products, accounting for 24-25% and 16-17%
of the market cost, respectively.
At present, the two factors affecting the production cost of CAR-T are capacity utilization and viral vectors, and increasing the production scale and reducing the cost of gene transduction vectors are the most effective ways to reduce the cost of
CAR-T.
(Kymriah CAR-T production cost analysis Source: Sina Pharmaceutical)
Knowing that cost advantages may become winners and losers, how do some domestic CAR-T leaders reduce production costs?
Focusing on the two major problems of long preparation cycle and low efficiency in the production of viral vectors, Genxi Biotech has carried out technical improvements, and its own FasT CAR platform supports it, which improves the gene transduction efficiency and in vivo expansion efficiency of CAR-T cells, so that the product preparation can be completed in about 24 hours, which greatly shortens the preparation and return time; In addition, the company also mentioned its own high-efficiency viral vector XLentiTM, which has greatly reduced
costs.
JW Therapeutics has formulated short, medium and long-term cost transformation plans, and in the short term of 1-2 years, the company will disassemble the large packaging raw materials with low utilization rate into small packages through small process improvements to improve the efficiency of raw material use; In the medium term of 2-3 years, the company hopes to replace imported raw materials with domestic production to achieve a significant reduction in costs; In the long term of 3-5 years, the company further optimizes the production process and integrates production modules through the implementation of new technologies to achieve the reduction
of raw materials, labor, time and other costs.
Hengrun Dasheng has built a large-scale production platform to solve the problem of high cost of viral vectors, which can realize large-scale, low-cost, and stable virus preparation between batches, and the existing large-scale production platform can theoretically meet the production needs of 10,000 cell therapy products, which is expected to reduce costs through scale effect; The company's self-developed DASH CAR-T technology effectively shortens the time of T cell activation and transduction process through a breakthrough process, which is expected to solve the problems of
long waiting time for patient infusion and high product manufacturing cost.
However, some insiders said that the price of CAR-T products may be slightly reduced in 5 years, but if you want to achieve a significant price reduction, it may take 5~10 years
.
In addition, there seems to be some controversy in terms of whether the scale effect can reduce production costs, industry insiders said: "Because CAR-T is personalized production, the key to production capacity is not amplification, not to produce 1,000, or 10,000 products, but how many patients can be produced in parallel, is collinear production and staffing issues
.
" ”
In just a few years, import substitution of key equipment, reagents, raw materials and other key equipment in the production process is still a more feasible way to
reduce costs.
3.
Who can stand out in the "skeleton heap"?
Who can stand out in the "skeleton heap"?
Combined with the above analysis (market education and cost reduction take time), the battle of cell therapy may be a "protracted battle"
.
Biotechs who consider the cell therapy track in terms of time inevitably think of financing capacity and cash reserves
.
Among the players who have been listed, as of October 19, the market value of Legend Biologics is 55.
53 billion, Keji Pharmaceutical is 7 billion, Yongtai Biologics is 1.
927 billion, and Genxi Biologics is 1.
609 billion (all RMB), except for Legend Biologics and Keji Pharmaceutical, which may have good refinancing capabilities, the rest of the companies need to test their cash flow reserves
.
In terms of unlisted players, except for companies such as Reindeer Medical and Hengrun Dasheng, which are blessed with top institutions and can impact the science and technology innovation board, the rest of the companies need to consider the fundraising problems
after submitting Hong Kong stocks.
As of March 2022, Legend Biotech had cash and cash equivalents, deposits and short-term investments of about US$796 million, and in the first half of 2022, Keji Pharmaceutical had RMB2.
7
billion.
CAR-T's R&D and production has the characteristics of high complexity, high cost, high risk, and commercialization also faces competition, players have strong upstream and downstream integration capabilities are particularly important, cooperation with mature pharmaceutical companies has become a necessary choice
.
For example, Legend Biologics granted overseas rights to Johnson & Johnson, and Reindeer Medical cooperated with Innovent Biologics to develop BCMA CAR-T, all of which used the strong commercialization capabilities of big pharmaceutical companies to empower them and aim to make up for their own shortcomings
.
GenScript Biotech's early R&D and development strategy can withstand the test, not only Legend Bio successfully went overseas, its CDMO has achieved a leading position in the replacement of some CGT processes and equipment consumables (such as cell sorting magnetic beads), and the advantages of the whole industry chain platform have been undoubtedly revealed (the current market value of Legend 55.
53 billion yuan, 58% of GenScript's parent company, 35.
3 billion yuan of the parent company).
The core explosive point of Keji Pharmaceutical, which was once favored by Hillhouse, is not BCMA CAR-T, and the data and BLA application of CLDN18.
2 CAR-T for solid tumors are expected to be submitted
as soon as 2023.
Conclusion: Perhaps market investors are not aware that the trend of strengthening the advantage of the head players of the CAR-T track has become more and more obvious
.
.
