Why is the investment boom in the trillion-dollar rare disease market now rushing in?

Medical Network, March 2nd.
Multinational pharmaceutical giants have rarely considered bringing rare disease drugs into the Chinese market in the past.
They are mainly worried about two issues: First, the payment of Chinese patients and the government is not enough, and the products cannot be sold after they come in; Second, China does not attach importance to the protection of intellectual property rights, and is quickly imitated after entering the market
.
In the past three years, these policy barriers that have made pharmaceutical companies hesitant are being broken one by one
.

New drug research and development, from chronic tumors to rare diseases
, February 28 is the 14th "International Rare Disease Day", and it is also the most concerned time for rare diseases every year.
Patient stories, academic forums, and popular science comics are all here.
One day's circle of friends swiped the screen
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Behind the “seeing” of rare diseases by more and more people is the R&D boom in this field from the world to China
.
In December 2020, AstraZeneca acquired rare disease giant Alexion for US$39 billion, officially entering the rare disease market
.
Prior to this, in February 2019, tumor giant Roche acquired gene therapy pioneer Spark Therapeutics for US$4.
3 billion.
In April 2018, Takeda Pharmaceuticals spent US$65 billion to acquire rare disease giant Shire, becoming the largest acquisition in the pharmaceutical field of the year .

.
In China, gene therapy companies known as the nemesis of rare diseases are also popular in the investment circle
.
A week ago, Jinlan Gene, a company specializing in gene therapy for rare diseases, announced that it had completed an angel round of investment of RMB 100 million and advanced three projects into the IND (New Drug Clinical Trial) stage
.
On the other hand, Chinese pharmaceutical companies have also begun to go overseas frequently
.
According to the incomplete statistics of Medicine Cube, in 2020, a total of 26 products of 19 Chinese companies have obtained 35 FDA orphan drug qualifications, accounting for 8% of the number of orphan drug qualifications granted by the FDA throughout the year
.
A few years ago, the field of pharmaceutical research and development was highly respected and discussed by capital, and all focused on the field of tumors and chronic diseases.

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The best-selling drugs in the world have been iterating over the past two to three decades.
From lipid-lowering drug Lipitor to various tumor-targeted drugs, the immunotherapy drug PD-1 is the new generation of "drug king
.
" This is in line with the law of industry development.
In the era when chronic diseases have not been overcome, R&D resources will inevitably be tilted toward patient-intensive areas
.
But when common diseases continue to be overcome, the research and development track in this field will become particularly crowded
.
The concerns of practitioners range from the earliest chemical pharmacy to biopharmaceuticals to the most cutting-edge cell gene therapy
.
In this sense, whoever occupies rare diseases first may lead the way in the future
.
The Prophet of Chunjiang Plumbing Duck, all obvious and hidden signals are proclaiming that rare diseases will be the next medical investment trend
.
From a commercial point of view, the orphan drug market is indeed very large
.
Pharmaceutical market research institutionseAccording to the "Orphan Drug Report 2019" released by Valate Pharma, the global orphan drug market in 2018 was approximately US$131 billion, and it will grow rapidly at a compound annual growth rate of 12.
3% from 2019 to 2024, reaching US$242 billion by 2024.

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Wang Jin, a senior investor in the field of orphan drugs, optimistically estimates that in the future, 5 to 10 drugs will be approved for global gene therapy and cell therapy every year, and these will become the gospel for patients with rare diseases
.
At present, there are still a lot of gaps in the rare disease market in China
.
Among the 68 rare disease drugs on the market in China, 46 have been included in the national medical insurance list, involving 23 rare disease indications
.
Only based on the "First Batch Catalog" as the statistical basis, there are still 16 kinds of patients with rare diseases facing the dilemma of "there are medicines abroad but no medicines in China" in our country
.
The global fever of rare diseases is unquestionable, thanks to a series of orphan drug incentive policies introduced by developed countries
.
However, when the global heat wave sweeps across China and faces different approval, pricing, and medical insurance payment systems, will this craze continue to heat up, or is it just a flash in the pan? Two key policies have promoted changes in rare disease investment trends.
In the past, multinational pharmaceutical giants have certain rare disease drugs around the world, but they rarely consider the Chinese market, and they are mainly worried about two issues: first, Chinese patients and the government The payment power of the products is not enough, and the products cannot be sold after they come in; secondly, China does not pay attention to the protection of intellectual property rights and is quickly imitated after entering the market
.
In the past three years, these policy barriers that have made pharmaceutical companies hesitant are being broken one by one
.
Up to a series of policies issued by the State Food and Drug Administration, including optimization of review and approval, clinical trial data and intellectual product protection, especially after China joined the ICH, various standards have been in line with international standards
.
In the past years of medical insurance negotiations, rare disease drugs have been included in the medical insurance list, and local governments are actively exploring different rare disease protection models
.

　　When did the policy wind blow to rare diseases?
Among the many favorable policies, the most frequently mentioned is the "First List of Rare Diseases", which was led by the National Health Commission in May 2018.
It contains 121 diseases, and the dynamic update time is in principle not less than 2 years
.
After the release of the rare disease catalog, the industry’s attention and enthusiasm for rare diseases has increased significantly, and most foreign companies have begun to list rare disease drugs in China
.
At that time, Li Wei returned to China from Australia and served as the vice president of Roche's Chinese Medical Department.
He frequently attended rare disease-related activities and experienced the domestic boom
.
Prior to this, she did not feel that this field is very hot
.
In Li Wei's view, the introduction of the catalog is a very positive signal from the state.
"Before 2018 (orphan drug approval) was purely a case, and it was not so clear in regulations.
After the introduction of the rare disease catalog, it was equivalent to being on the top level.
The design has begun to attach importance to rare diseases
.
" "This means that the country recognizes this disease as an official status of rare diseases, and future policies related to rare diseases will be enjoyed
.
" Founder of the rare disease popular science project "Pea Sir" Chen Yiwei further explained the important value of a certain disease in the catalog
.
The industry has been calling for the introduction of the second and third batch of catalogs, but there has been no news in recent years
.
Chen Yiwei feels that the problem is not even that the pit of rare diseases is too big and the country is unwilling to fill it, but that no one knows how big the pit is, so it is impossible to measure the pit
.
In just a few years, the proportion of rare disease items in the product pipeline of multinational pharmaceutical companies has increased year by year
.
According to data provided by Roche, in 2017, there were 10 rare disease treatment drugs among 82 clinical pipeline drugs, accounting for 12.
2%; in 2018 it reached 13%; in 2019 it rose to 15%; since 2020, they have 92 clinical pipeline drugs Among the drugs, there are 15 kinds of rare disease treatment drugs under development, accounting for 16.
3%
.
Takeda, which itself focuses on rare diseases, has designated orphan drugs for nearly 50% of the nearly 40 clinical-stage new compound research and development projects around the world.

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The confidence of multinational companies in the Chinese market is also increasing
.
Talking about the development of the rare disease industry in China, Takeda China responded to eight good news, "The attention and support of all walks of life to the group of patients with rare diseases is increasing, and the country has also introduced a number of favorable policies to help the development of the industry
.
At present, China The rare disease business is still in its infancy, but its development potential is obvious to all
.
Now, many R&D-oriented innovative pharmaceutical companies have begun planning and layout work in the field of rare diseases, and the future development is worth looking forward to
.
" National level There is no doubt that vigorous advancement
.
In terms of rare disease diagnosis and treatment, in February 2019, the National Health and Construction Commission issued the "Notice on Establishing a National Rare Disease Diagnosis and Treatment Collaboration Network".
The first batch of 324 hospitals were selected to form a rare disease diagnosis and treatment collaboration network, led by Peking Union Medical College Hospital
.
In October of the same year, the Health Commission issued a notice on the registration of diagnosis and treatment information for rare disease cases, and organized the development of China's rare disease diagnosis and treatment service information system
.
In March 2020, the "Opinions on Deepening the Reform of the Medical Security System" issued by the State Council included the protection of drugs for rare diseases
.
The presence of relevant leaders of ministries and commissions also strengthened the determination of practitioners to join the game
.
Xiang Yu, CEO of RareStone Group, a start-up company, remembers that for several rare disease exchange events in 2019 and 2020, relevant leaders from the Food and Drug Administration, the Medical Insurance Bureau, the Health Commission, and the Ministry of Industry and Information Technology all attended the meeting
.
In 2015, almost no ministerial leaders attended
.
A medical policy expert explained that rare diseases can easily arouse social empathy and public attention.
Ministries and commissions have achieved obvious benefits, so it is easy to introduce policies
.
The introduction of the rare disease catalog is more beneficial to companies that already have medicines, and they are doing business in the stock market.

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Another huge watershed is the "Notice on Soliciting Opinions on the List of Urgently Needed New Drugs for Clinically Marketed Overseas" issued by the State Food and Drug Administration in August 2018.
This policy has accelerated the approval and registration of innovative drugs for rare diseases and has also attracted a number of earlier the company to enter the Chinese market, "from 0-1" to establish a rare disease business
.
The leading ophthalmologist Dompé, originally an Italian family company with a history of 120 years, discovered that its own product Oushiwei (a rare disease for the treatment of neurotrophic keratitis and corneal epithelial healing disorders) was listed as the first in China Among the list of new drugs that have been marketed overseas and are urgently needed for domestic clinical use, I realized that there are huge business opportunities in the Chinese market
.
Zhong Wenjing is the No.
1 employee of Dongpei China.
After learning that Dongpei is coming to China, she volunteered to become China's first general manager
.
After identifying the navigator, they began to recruit people in China and apply for company registration
.
Under the new policy of the Food and Drug Administration, their ophthalmic topical biologics passed the designation of breakthrough biological therapy soon on the market
.
In less than one and a half years, the team from No.
1 employee to nearly 40 people just proved the influence and appeal of China's pharmaceutical policy
.
From 1.
0 to 3.
0, rare diseases ushered in a new era.
There are nearly 20 million rare disease patients in China, and they are very limited
.
Rare diseases have complex symptoms but rare cases, making diagnosis difficult
.
There is a joke circulating in the industry: Experts who see rare diseases in China are more rare than rare disease patients
.
In the United States, it takes an average of 7.
6 years for each rare disease patient to experience 8 doctors and be misdiagnosed two or three times to be diagnosed
.
In the China Rare Disease Alliance survey of more than 20,000 Chinese patients, 42.
0% of the patients said they had been misdiagnosed
.
Due to the small number of patients for each rare disease and the lack of information, the development of rare disease drugs is difficult-high research and development costs, small market space, low return on investment but high risk, so few people care
.
Rare disease drugs have a sad alias-"orphan drug"
.
In the past, the domestic rare disease drug market, especially the high-value rare disease drug market, was usually dominated by multinational pharmaceutical companies
.
For many traditional multinational pharmaceutical companies, the barriers of rare disease protection hinder their determination to enter the Chinese market.
Medical insurance payments rarely cover high-value rare disease drugs.
The promotion of drug registration and commercialization in China seems to be full of uncertainty.
Some companies will even choose to abandon the Chinese market
.
With the advancement and upgrading of the pharmaceutical policy reform and medical insurance payment, the pharmaceutical industry has seen business opportunities for rare diseases, and China's favorable policy environment has also alleviated investors' concerns
.
In recent years, various types of rare disease companies have sprung up, involving R&D, production, and commercialization, affecting the rapid upgrade of the rare disease industry.
Some people have concluded that rare disease companies have moved from "1.
0" to "3.
0".
Times
.
In the 1.
0 era, foreign pharmaceutical companies dominated
.
For example, Sanofi's acquisition of Genzyme and Takeda's acquisition of Shire, whether it is a foreign-funded company focusing on rare diseases or a comprehensive foreign company giant, has entered the field of rare diseases through large-scale mergers and acquisitions
.
In the 2.
0 era, local pharmaceutical companies have emerged
.
A group of professional managers engaged in rare disease business from foreign companies have left to start their own businesses , based on the unmet needs of rare disease patients in China
.
In the 3.
0 era, a group of entrepreneurs from non-rare disease classes entered the market.
They went beyond the idea of ​​making orphan drugs and began to deploy a patient-centered entire ecosystem, trying to start from the needs of patients throughout the process to create a rare group development.
disease ecosystem, including medical equipment , auxiliary facilities, counseling and so on
.
They play differently
.
Large pharmaceutical companies tend to buy off-the-shelf innovative products.
Small companies focus on early research and development based on clinical needs.
When products are approaching maturity, they will look for opportunities to sign contracts or M&A with large companies
.
An industry insider commented that orphan drugs are also companiesA symbol of R&D strength, the acquisition of rare disease companies by major pharmaceutical companies pays more attention to the stock income and brand appreciation brought by drugs, rather than just making money from selling drugs.
"I have the most expensive drugs in the world, which represents my R&D capabilities.
The best
.
" More than one multinational pharmaceutical company said to Badian Jianwen that it is a global trend for multinational pharmaceutical companies to expand their scale and enrich their product pipelines through acquisitions or mergers and acquisitions.
These commercial expansions are not only in the field of rare diseases
.
Generally speaking, multinational pharmaceutical companies have their own product lines, and mergers and acquisitions consider whether there is a good complement between the other's rare disease drugs and existing products
.
"Generally speaking, companies still want to start from a more familiar field, and get started faster.
If it is a brand-new field product, the company needs to spend a lot of time training, including the understanding of the diagnosis and treatment of the disease field
.
" Li Wei said
.
While multinational pharmaceutical companies are busy with acquisitions, a number of local pharmaceutical companies have also quietly emerged
.
Their backgrounds are very interesting.
For example, Xue Qun, chairman and CEO of Beihai Kangcheng, served as the first general manager of Genzan in China, and Shufang Pharmaceutical Chairman and CEO Yan Zhiyu is also an executive of Aktelon
.
Choosing to resign and start a business is based on both personal career circumstances and the active encouragement of China's rare disease policy
.
These professional managers have been working in multinational pharmaceutical companies for many years.
Knowing the business logic of rare disease drugs, they have reached the bottleneck period of their careers
.
In large pharmaceutical companies, rare diseases that are difficult to generate profits are not the most valued department.
Especially under the premise of a global strategy, Chinese executives cannot control the voice of the Chinese market, which makes people feel frustrated and powerless
.
Locally-grown companies can focus more on China's clinical needs, and their emergence has brought more possibilities for the launch and affordability of rare disease drugs
.
In Yan Zhiyu’s view, drug innovation in the field of rare diseases not only represents new chemical formulas, but also includes the development of new indications, the reduction of drug costs, and the availability of more accessible prices to the market.

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He believes that acquisitions will not be the target of reference for domestic start-ups.
After all, their development stages and business models are different from those of large companies.
It is based on China’s drug pricing strategy
.
” Ten years ago, few pharmaceutical companies in China were involved in the field of rare diseases
.
Ten years later, there are still areas of rare disease patient misdiagnosis and more difficult for medical treatment, medicines less expensive drugs such as number of problems to be solved
.
Whether the product can truly be commercialized is a common challenge faced by all practitioners
.
Entrepreneurship is difficult, and the road in the era of rare disease 2.
0 is not easy.
For example, Beihai Kangcheng, which is dedicated to the research and development of rare disease drugs, was established for 9 years, but it was not until six months ago (September 2020) that it announced the first successful business in China A rare disease drug-Hiris for the treatment of mucopolysaccharidosis type II, is priced at 2.
55 million yuan per year
.
However, since there is no charity donation of medicines, no patients currently use it
.
Some people in the industry expressed regret, "The prices of drugs bought by domestic companies are still so high, even higher than those of foreign companies
.
" It is true that many links need to be improved from disease diagnosis and treatment, drug research and development, to introduction and marketing, and medical insurance payment, but the most urgent The demand is still-"discover the patient"
.
How can doctors and patients see each other in the vast crowd? Li Wei said that when pharmaceutical companies promote rare disease drugs, the most important thing is to make patients and doctors aware of the disease
.
The timely diagnosis of patients is the most important, and more and more technologies are being developed to help the diagnosis of rare diseases, as well as standardized diagnosis and treatment in accordance with guidelines after diagnosis
.
Different from the traditional crowd tactics, rare diseases do not require a large sales team, and more complex talents are needed to help build a standard diagnosis and treatment model
.
"Rare diseases rely more on close collaboration and active co-creation of multiple parties than any other field.
Only by providing overall solutions for patients with rare diseases can we truly bring value.
The previous model (only staring at the hospital) is half the effort.

.
"Li Wei said
.
Undoubtedly, rare diseases are indeed a very large blue ocean, but also a dangerous sea area.
Not all ships can sail smoothly at sea
.
On February 23, 2021, Bluebird Bio issued an announcement saying, The U.
S.
FDA has put on hold its LentiGlobin gene therapy clinical trial program for the treatment of a rare type of sickle cell disease (SCD).
Previously, the company's two clinical trials for the treatment of sickle cell disease caused two subjects to develop cancer
.
In the future, Whether the trial can continue or whether the drug will be launched is unknown
.
The rare disease track is not only not crowded, on the contrary, there is too little competition.
Compared with the fierce foreign countries, the domestic rare disease field is still in the testing stage
.
Almost.
All interviewees are sure that compared with two or three years ago, the enthusiasm of all parties for rare diseases in China is increasing day by day, but this enthusiasm can only be said to be more attention, not rushing in
.
September 2019 At the 8th Rare Disease Summit Forum, Xue Wenyu, managing director of Morningside Ventures, said that now it is a window for rare disease investment.
You can start to look for good opportunities and even invest, but it is still far from the outlet.
If investors invest in the window period, they still have to be patient with rare diseases and orphan drugs
.
" As for the question of whether the rare disease track is crowded, Xiang Yu, CEO of Langyu Group, gave a negative answer.
In his opinion, rare diseases The track is not only not congested, on the contrary, there is too little competition.
The heat is only slightly warmer than three or five years ago
.
In foreign countries, rare diseases enjoy a series of preferential policies from research and development, registration to listing , Is regarded as a worthy investment field
.
In order to prevent pharmaceutical companies from giving up the research and development of orphan drugs, countries around the world are encouraging companies to develop orphan drugs in various ways, and to a certain extent have recognized the "sky price" strategy
.
The most typical The representative is the United States
.
After the introduction of the "Orphan Drug Act" in the United States in 1983, the number of orphan drugs on the market increased rapidly from 10 to nearly 500.

.
Incentives such as tax reduction and exemption, independent pricing, rapid approval, and 7-year market exclusivity for orphan drug research and development determined by this bill essentially give pharmaceutical companies enough motivation to develop orphan drugs
.
Kerry Corning Bioengineering CEO Xiang Jianing pointed out that the United States has identified 7,000 rare diseases.
The total number of patients with rare diseases is about 200,000, which is nearly twice that of depression
.
The patient's expenditure on orphan drugs accounts for about 10% of the country's expenditure on drugs, reaching about 45 billion U.
S.
dollars
.
Compared with developed countries, there is still a big gap in China’s rare disease market.
China’s "First Batch of Rare Disease Catalogue" only includes 121 diseases, and the scale of 16.
8 million patients is estimated based on the incidence rate of only one in 500,000.

.
In the eyes of investors, the rate of return in the rare disease market is nothing more than the length of the drug's development time, the probability of success, and the final exit after the investment
.
From the perspective of research and development, rare disease drugs have a higher probability of success from clinical to approval, which is shorter than other indications
.
From the perspective of payment, the United States and Europe have relatively mature payment systems, but China's medical security system does not support "sky price" pricing, and many products have experienced "unsellable" situations
.
In terms of investment value, orphan drug clubs can increase the valuation of listed companies by up to 10%
.
"Even with nearly 17 million potential patients, only a small number of patients have been excavated.
The market that can be touched and the patients that are touched may have to be deducted from a zero
.
" Xue Wenyu said
.
Qian Ranting, the managing director of Huiqiao Hongjin Fund, believes that the capital market still needs time to cultivate.
At this stage, the aesthetics of the industry is still concentrated on those companies that understand and will soon be able to see turnover.
The rare disease companies of the Chinese concept have come to the door of the capital market.
The capital market may not be fully prepared because their aesthetics is in the process of evolving
.
” This is like opening a food street with only fast food restaurants at the beginning, but when After more and more food stores with different tastes are opened, everyone’s ability to appreciate food will improve together
.
Qian Ranting believes that although the time is not very mature, in the next one or two years, with the prosperity of this whole food street and the improvement of mutual appreciation and learning ability, including the real understanding and control of risks , More and more people will understand and get involved in rare diseases
.
Both multinational pharmaceutical companies and local companies realize that rare diseases are a slowly emerging market
.
Li Wei believes that it is only the first step for multinational pharmaceutical companies to introduce internationally advanced rare disease drugs into China based on the unmet clinical needs of patients.
"Only when patients can use and can afford the drugs can they really bring about change.

If the links of supply guarantee and medical insurance payment have not been straightened out, the so-called return on investment will not be discussed
.
” From the perspective of the industry, it will take time for rare disease companies to take advantage of the policy to take root
.
Although the medical insurance negotiations over the years have been accompanied by good news that rare disease drugs have been included, the problem of high-value rare diseases is still prominent
.
Even if part of the medical insurance is reimbursed, there are not many varieties that patients can afford at their own expense, and they are not as optimistic as originally thought
.
"Although drugs for many rare diseases are still very expensive now, everyone expects that drugs under research will be launched in China after a few years.
By 2025 and 2030, the payment environment may have further changes
.
" In IQVIA (IQVIA) According to Li Yangyang, Executive Director of China, yesterday in the global market is today and tomorrow in the Chinese market
.