A little-known biotech company amazed the biopharmaceutical industry last spring when it explained an “unprecedented” performance: the experimental cancer medication looked more effective than Merchant'S Keytruda in a clinical study. The Company, Summit therapeutic agentlicensed the medication from the Chinese company Akeso Inc.
In October, a group of rescue scientists announced that they would use $ 400 million for the creation of a company called Kaailera Therapeutics, which would develop experimental obesity medications that they bought from the Chinese company Jiangsu Hengrui Pharmaceuticals.
In a few days in December, Merck announced that he would licens a potential competitor for the medicine from Summit and a separate experimental obesity pill – both from Chinese companies.
Suddenly there are US companies to find medication in China. Almost 30% of large pharmaceutical deals with at least 50 million US dollars in the previous year affected Chinese companies last year, compared to 20% in the previous year and less than five years earlier, according to Dealforma.
“This is breathtaking for me,” said Chen Yu, founder and managing director at Crossover Fund TCGX. “It's breathtaking.”
Yu said 20 years ago that only a few biopharma companies were interested in China because they looked at it for a small market. His former company, Vivo Capital, was the pioneer of the concept to bring medication to the Chinese market.
Today the movement goes in the opposite direction. He never imagined the spread that is now taking place.
Investors and industry experts offer some reasons for the trend: Chinese companies create better molecules than ever before – and more of them. You can test these connections in humans earlier and at a cheaper price than with the US buyers who have found a business model to import the medication essentially through license information. Venture financing in China has also dried out and forced Biotech companies to do business.
One thing that all these people in the industry agree on? This trend does not go away.
What is less clear is what the development for the USBiotech sector means.
Some people claim that it is terrible for American startups when large pharmaceutical companies in China can find a promising medication for a fraction of the price. Others argue that the competition all makes it better, and American companies will ultimately make the rewards for the provision of medication on the market. In any case, the influx could redesign the landscape of the US Biopharma industry.
“It is a kind of water sheath moment in which the pharmaceutical industry says:” We don't necessarily have to buy biotechs, “said Tim Opler, managing director in Stifels Global Health Care Group.” We make sense, but we can get through License contracts with Chinese companies Perfect good biotech assets. ”
Bain Capital Life Sciences made China a priority around 2018, said Adam Koppel, partner of the fund. The private equity company saw how the Chinese government and the bioscientific industry made a conscious effort to develop from their historical focus on imitators and fast-folloel medication that imitated leading medication in order to create new chemical matters, the China could export to the rest of the world.
Since then, Bain has completed six biopharma deals in China. It bought an experimental asthma medication from Hengrui in 2023 and bought A company called Aiolos started with a financing round of $ 245 million. GSK acquired the company three months later for up to 1.4 billion US dollars.
Koppel sees large pharmaceutical companies that work with drugs that come from China with more of them and see their results, he said. The buyers had partially held back because they were concerned that data from China were not representative of a world population and that the US supervisory authorities would not accept them.
“When you see assets, you will see things that are successful, and finally when things are approved and used on the market, I think that this concern will be reduced,” he said.
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This narrative was to be seen when Summit Therapeutics said last year that his experimental cancer drug in a head-to-head study, another drug in a head-to-head study has defeated no other drug . Summit's study was carried out exclusively in China, which put people into question whether the results would remain elsewhere.
When the leaders of Summit bought a medication that they could develop, they made it their goal to look in China, since co-CEO Bob Duggan came more new medications from the country. But it was at the end of 2022, and the US Food and Drug Administration had just rejected some applications for medication that were only examined in China, including one of Eli Lilly.
When Summit announced that it is licensed by the cancer drug Ivoneescimab from Akeso questioned people how Summit could do the deal because the FDA would never accept it, said Summit's co-CEO and President Maky Zanganeh.
“And suddenly many people opened us after us,” she said.
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Ivonescimab had carried out studies early on and was in late level in China in China when Summit submitted the license agreement. Summit is now carrying out three global phase -3 studies to fulfill the FDA's wish for drugs that can be examined in different groups of people.
The strategy of the Summit could become more common. Investors and other industries -one of the awards about shops with Chinese biotech companies are likely to find molecules for less.
Gilead Spend a lot of time in China to look for assets, as is the case in the USA and Europe, the company's CFO, Andrew Dickinson, told CNBC. Gilead has offered a “significant shift” of the quality and quantity of the assets developed in China and the US Biopharma companies.
“The transformation in the past five years has been real and impressive,” said Dickinson.
It helps that more Chinese companies now have to do business. The amount of the risk controller funds collected by the Chinese biotech industry last year from a climax of 6.3 billion US dollars in 2021 to only 1 billion US dollar.
“Why should we still carry out early phase development in the United States?” Said yu. “Why shouldn't we just get clinical proof of concept in China and then bring it to the USA for expensive clinical development when we actually know that the medication works? And I think that could be a very revolutionary new way for our industry be more efficient. “
This is an opportunity – or the risk – for the US Biopharma industry, depending on who you ask. Some, like Yu, see it as a way to reduce the price for prescription medication. Others fear that US companies could limp if Merck and other large pharmaceutical companies pass on American startups in favor of licensing assets from China.
On January 30, 2024, a worker works on a pharmaceutical production line in the production workshop of a pharmaceutical company in Meishan, China.
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The day in December when Merck announced that there is an experimental obesity pill from China's Hansoh for up to 2 billion US Viking therapeutics fell 18%. Viking is viewed as an acquisition goal, since it is a medication in the red stoves developed obesity, and suddenly it looked as if a possible freer had decided to spend its money elsewhere.
People see parallels to what was done in the room for artificial intelligence when China's Deepseek explained that it had created a model that was as good as US models for much less than American companies.
President Donald Trump or the political decision -makers in the United States were able to stop the similar trend in Biotech as a threat and intervention to stop these business, and what Yu calls the “stroke” risk. Last year, the legislature contested the Biosecure Act that the US company would have prevented them from working with Chinese contract manufacturers.
Washington has already hugged Protectionist guidelines in other competitive areas such as artificial intelligence and semiconductors. It is possible that the life sciences could extend.
“The deeper message from Deepseek is that we generally have a competition in the high sciences and that we also make important investments in the development of scientific assets,” said Stifels Opler.
In other words, put a way: the race in Biopharma is switched on.
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