At the beginning of the new year, Lepu Medical Technology (Beijing) Co.Ltd(300003) group received good news. Its subsidiary Lepu biology passed the hearing of the Hong Kong Stock Exchange on February 3, which is the fastest "multiple children" listing plan of Lepu Medical Technology (Beijing) Co.Ltd(300003) in recent years.
Zhitong finance app learned that the business of Lepu Medical Technology (Beijing) Co.Ltd(300003) group is divided into four main areas, namely medical devices, pharmaceutical products, medical services and new medical formats. Since the "4 + 7" centralized purchase, each centralized purchase can be said to be accurate in the heart of LEP. Clopidogrel, atorvastatin and coronary stents have been collected successively, and the price has decreased greatly.
There is no doubt that the Lepu Medical Technology (Beijing) Co.Ltd(300003) group, which has been intensively purchased for many times, is facing a huge test. It is the best choice to split its subsidiaries for listing. Therefore, Lepu Medical Technology (Beijing) Co.Ltd(300003) has frequently split its subsidiaries for listing in recent years, and its three subsidiaries, Lepu biology, Xintai medical and Lepu diagnosis, have successively submitted their listing plans.
However, the listing process was not as smooth as expected. In July 2020, Lepu Medical Technology (Beijing) Co.Ltd(300003) announced that it planned to spin off its holding subsidiary Lepu diagnosis to the science and innovation board for listing, and the listing plan was terminated in June the next year. Seeing that Lepu diagnosis failed to land in a shares, Lepu biology and Xintai medical have switched to the Hong Kong stock exchange.
Lepu biology undoubtedly made a good start for Lepu Medical Technology (Beijing) Co.Ltd(300003) other subsidiaries to land on the Hong Kong stock exchange through the hearing of the Hong Kong stock exchange. What about Lepu biomass land bearing the "listing mission" of Lepu Medical Technology (Beijing) Co.Ltd(300003) group?
By buying rich pipelines, cash flow is stretched
Lepu biology was founded in January 2018. In June 2018, the company acquired PD-1 and PD-L1 pipeline products by acquiring the controlling interests of Taizhou Hanzhong and Taizhou Aoke; In July of the same year, the company acquired the controlling interest of Shanghai mayako, thus having the global rights of ADC platform and candidate drugs mrg003, mrg002 and mrg001, and independently developed the company's ADC candidate drug mrg004a. The company also cooperates with Connaught and its affiliates to develop cmg901. In addition, in 2019, the company introduced cg0070 oncolytic virus from cgoncology and the right to develop, manufacture and commercialize cg0070 in China, Hong Kong and Macao. In addition to the rights granted to the company for the development, manufacturing and commercialization of cg0070 in China, Hong Kong and Macao, the company has the global development and commercialization rights of clinical and preclinical candidate drugs and candidate drugs jointly developed by the company through joint ventures.
After a series of acquisitions, introduction and self research, Lepu biology has 14 pipelines under research and has started 28 clinical trials, including 8 candidate drugs in clinical stage, 3 pre clinical candidate drugs and 3 combination therapies in clinical stage. Among the candidate drugs in these 8 clinical stages, there are 5 targeted therapeutic drugs and 3 immunotherapeutic drugs, and the fastest progress is hx008 anti-PD-1 monoclonal antibody. It is worth mentioning that in the pipeline of Lepu biology, five targeted therapies are currently popular: PD-1, PD-L1, EGFR, HER2 and CD20. The popular targets also mean that the market competition is very fierce.
Compared with the table just handed in, Lepu biological has a richer product line. However, Lepu biology has no commercial income, which also leads to large losses for the company. In 2019, 2020 and the first eight months of 2021, the company's other income was 5.55 million yuan (unit, the same below), 7.96 million yuan and 4.6 million yuan respectively. Due to the simultaneous R & D of multiple pipelines, R & D expenditure also increased significantly, with R & D expenditure of 229 million yuan, 354 million yuan and 509 million yuan respectively in the same period. Therefore, the company lost 515 million yuan, 613 million yuan and 668 million yuan respectively during the period.
Continue to burn money for R & D, making the company that is not rich worse. As of August 31, 2021, the company's cash equivalents were only 261 million yuan.
Fortunately, after a long time of research and development, three indications of hx008 are under registration test. In June 2021, Lepu biology submitted an NDA application for hx008 for melanoma to the State Food and drug administration, which is expected to be approved in 2022. In addition, in July 2021, Lepu biology also submitted the application for pre NDA meeting of hx008 for MSI-H / dmmr solid tumors, and submitted the application for NDA of hx008 for MSI-H / dmmr solid tumors to the State Food and Drug Administration in October of the same year, and obtained the priority review qualification.
PD-1 is a piece of Red Sea, and ADC will be followed up
Zhitong finance app learned that hx008 is a humanized monoclonal antibody against human PD-1, which can antagonize PD-1 signal to restore the ability of immune cells to kill cancer cells by blocking the binding of PD-1 with its ligands PD-L1 and PD-L2; Moreover, hx008 adopts innovative molecular design to prolong its half-life, showing strong clinical antitumor activity and good safety.
Compared with all competitive anti-PD-1 antibodies that have been listed or entered phase III clinical trials, it innovatively adopts antibody engineering technology to introduce mutations in Fc region and improve the binding affinity of FcRn, so as to greatly prolong its half-life and improve the clinical efficacy and drug compliance of patients. In the completed phase ia clinical trials, the half-life of hx008 was 17.15 to 23.51 days (single administration) and 18.41 to 38.16 days.
The Orr and DCR of phase II clinical trials for MSI-H / dmmr solid tumors reached 46% and 70% respectively; The Orr and DCR of clinical trials of melanoma reached 18.5% and 44.5% respectively, which was equivalent to the historical data of the best-selling drugs. Due to the good effect, Lepu biology is also conducting a number of clinical trials, including phase III clinical trial of second-line treatment of gastric cancer or gastroesophageal junction cancer, phase II / III clinical trial of NSCLC, phase II clinical trial of TNBC, phase II clinical trial of NMIBC and phase II clinical trial of HCC. In addition, supported by the good safety results of hx008, the company is conducting two clinical trials on the combined treatment of hx008, including hx008 combined with oh2 for advanced liver cancer and hx008 combined with lp002 for refractory advanced melanoma treated with anti-PD-1.
Excellent clinical trial data, coupled with the continuous growth of the market scale of PD-1 / PD-L1 therapy in China, it can be said that the PD-1 market potential of Lepu biology is full.
According to Sullivan data, the market scale of PD-1 / PD-L1 therapy in China in 2020 is 13.7 billion yuan, which is expected to reach 51.9 billion yuan in 2025 and 58.2 billion yuan in 2030. The CAGR from 2020 to 2025 is 30.5%, and the CAGR from 2025 to 2030 is 2.3%. In 2020, the global market scale of PD-1 / PD-L1 therapy was US $28.6 billion, which is expected to reach US $62.6 billion in 2025, with a CAGR of 17.0% from 2020 to 2025.
Due to the emergence of other innovative cancer immunotherapies, such as ADC, bispecific antibody and oncolytic virus therapy, the global market scale of PD-1 / PD-L1 is expected to remain relatively stable from 2025 to 2030.
In addition, according to frost Sullivan, anti-PD-1 / anti-PD-L1 monoclonal antibodies have unmet medical needs in China. Anti PD-1/ anti PD-L1 inhibitors are increasingly used in a variety of malignancies, including melanoma, NSCLC, head and neck cancer, bladder cancer and renal cell carcinoma. The traditional therapies for these indications mainly include surgery, radiotherapy and chemotherapy.
With a large enough market and the good performance of hx008 in a variety of indications, the product also shows great market potential. However, it should be noted that the PD-1 market has long been a red sea.
PD-1 / PD-L1 is a popular target in China. At present, there are 70 PD-1 / PD-L1 drugs and candidate drugs entering the clinical stage in China. Among them, PD-1 is relatively more favored by enterprises. At present, there are 41 PD-1 and 29 PD-L1 in the clinical stage, and the number of PD-1 products in the late stage of R & D is more than PD-L1.
At present, 10 PD-1 / PD-L1 products have been approved for listing in China. In 2018, also at the end of the same year when imported PD-1 drugs were listed, Junshi's treprizumab and Cinda's cindilizumab were both approved for listing. In 2019, Hengrui's carrelizumab and Baiji's tirelizumab were also approved for listing, thus forming a "F4" pattern of domestic PD-1. In August 2021, kangfang's paianpulimab and Yuheng's cyprimab were also approved for listing, so the number of domestic PD-1 approved reached 6.
In terms of PD-L1, from the end of 2019 to the beginning of 2020, two imported PD-L1 products - dovalizumab of AstraZeneca and atilizumab of Roche have also been approved for listing. At present, no domestic PD-L1 has been approved for listing.
In terms of indications, most products have adopted the strategy of "small tumor species on the market + expanding large tumor species". Hodgkin's lymphoma and melanoma are two common small tumors first listed. At present, most patients with esophageal cancer and PD-1 / 1 cancer have been approved for a number of indications in China.
As many PD-1 / PD-L1 are listed, the price of PD-1 / PD-L1 continues to decline under the medical insurance negotiation. Overall, the annual treatment cost of domestic PD-1 is 40000-100000, that of imported PD-1 is 100000-150000, and that of imported PD-L1 is 250000-350000.
So it seems that the PD-1 listing of Lepu biology faces many challenges.
Take another look at its other core product mrg003. According to the data of frost Sullivan, as of the last practical date, mrg003 is the leading ADC drug targeting EGFR in clinical research stage in China. Because there is no approved EGFR targeted ADC in China, it is expected to seize the market opportunity.
In March 2021, mrg003 completed phase IB test. According to the results of phase IB clinical study, the drug has shown good efficacy and safety in the field of advanced solid tumors (including HNSCC and NPC) in China. In patients with evaluable efficacy, the orr of HNSCC was 40.0%, and the DCR was 100.0%; The Orr and DCR of nasopharyngeal carcinoma were 44.4% and 88.8%, respectively. The Orr and DCR of CRC patients were zero and 25.0%, respectively.
Based on the good clinical trial results, the company is currently carrying out phase II clinical trials of mrg003 single drug in recurrent or metastatic advanced HNSCC, advanced NSCLC, BTC and NPC in China. The company will also launch clinical research on recurrent or metastatic advanced HNSCC in the United States, and carry out clinical research on other indications of mrg003 according to the data of clinical research, so as to further expand the overall potential market, so as to realize the international commercialization of mrg003.
In terms of market space, the commercial value of EGFR targeted therapy (such as ositinib and cetuximab) for many types of cancer has been widely recognized in the market. According to Sullivan's prediction, by 2025, the market space of China's HNC, NPC and NSCLS will reach 7.4 billion yuan, 1.6 billion yuan and 111.7 billion yuan. It will reach 13 billion yuan, 2.8 billion yuan and 177.5 billion yuan in 2030.
Drug resistance is the main cause of tumor recurrence and disease progression caused by treatment failure of NSCLC. The first and second-generation EGFR-TKI acquired resistance after 9 to 14 months, and 60.0% of patients treated with the third-generation EGFR-TKI (oxitinib) developed resistance after 7 months to 2 years. For patients who are resistant to or unresponsive to oxitinib, there is an urgent need to develop other innovative drugs.
Existing innovative drugs, such as anti-PD-1 antibody products, have not shown significant efficacy in the treatment of NSCLC. Among 495 unselected NSCLC patients, the orr of pabolizumab was 19.4%, and the median PFS and overall survival were 3.7 months and 12.0 months, respectively. Compared with oshitinib, Orr, PFS and overall survival were relatively low. It is expected that after oxitinib resistance, more innovative drugs will be developed for the treatment of NSCLC.
According to the data of frost Sullivan, as of the last practical date, mrg003 is the leading ADC drug targeting EGFR in China at the stage of clinical research. Because there is no approved ADC drug targeting EGFR in China, Lepu biology is expected to seize the market opportunity. However, mrg003 will face fierce competition from other EGFR targeted ADC drugs in the market.
On the whole, although Lepu biological has abundant pipelines, its core product PD-1 will face fierce competition after listing. However, at present, the company carries out more indications for PD-1. Therefore, after the product is listed, it is expected to bring certain cash flow to the company; Among the follow-up products, the company's mrg003 is a leading ADC drug targeting EGFR in clinical research stage in China. At present, there is no approved ADC drug targeting EGFR in China. Although there are other drugs targeting EGFR, as a leading ADC drug in China, it still has certain market advantages.
Today's market environment is different from the past. Although Lepu Medical Technology (Beijing) Co.Ltd(300003) has made every effort to split its subsidiaries for listing, it has missed the best financing opportunity. Whether the listing of Lepu biology can be recognized by the market remains to be studied.
