After Xinda biological anticancer star drug, which accounts for 25% of the domestic PD-1 market, is frustrated in the U.S., will the crowded PD-1 track become more and more inward?
On February 11, the US Food and Drug Administration (FDA) held a tumor drug Advisory Committee on the application of xindilimab for a new drug for the treatment of first-line non-small cell lung cancer, and finally recommended that xindilimab not be approved to be listed in the United States with 14:1 votes, which ushered in another thunder in the innovative drug market after the festival.
In the secondary market, investors were disappointed with the review results of FDA. Cinda bio’s share price was under pressure today, and finally reported at HK $31.6/share, down 7.47. At one time, it fell more than 11%.
In the face of the hot debate in the market, Cinda biology also issued an announcement today to respond. According to the announcement, the application for new drug listing of xindilimab injection in the United States is mainly based on the phase III clinical trial data of orient-11 carried out in China. The committee voted to recommend the need for additional clinical trials before approval to demonstrate the applicability of sindelimab in the U.S. population and medical practice in the United States.
Cindilimab is an innovative PD-1 inhibitor, which was jointly developed and commercialized by our company and Lilly pharmaceutical company. Cinda biology and Lilly pharmaceutical will continue to cooperate with FDA to complete the review of new drug listing application.
What is the impact of this setback in FDA on Cinda biology? According to the 2020 annual report, in the income structure of Cinda biology, cindilimab is its current core heavy product. The income scale in 2020 is 2.29 billion yuan, accounting for about 60% of its income.
In addition to cindilimab, by the end of 2020, Cinda biological had three biological analogues on the market, namely: dayutong (bevacizumab biological analogues), dabaihua (rituximab biological analogues) and sulixin (adalimumab biological analogues). The total revenue of these three drugs is only 78 million yuan
crowded PD-1 track
What makes the industry regret is that this is the first time that domestic PD-1 tumor drugs “broke through” FDA, but the result was not successful. How should other enterprises in the track open up the market?
First, we need to understand the current development of PD-1 market outside China. According to statistics, there are 154 PD-1 research enterprises in the world, of which 85 are developed or jointly developed by Chinese enterprises, accounting for 55% of the world. It can be said that China is the most competitive region of PD-1.
However, the number of drugs on the market of PD-1 track is still increasing. In 2021, PD-1, Harbin Gloria Pharmaceuticals Co.Ltd(002437) and PD-1 of YaoMing biology jointly developed by kangfang biology and Zhengda Tianqing were also approved respectively. At present, there are 6 PD-1 monoclonal antibodies approved for listing in China. It is estimated that there may be as many as 15 PD-1 monoclonal antibodies listed in China in the next three years.
Why are so many enterprises interested in this “same topic composition”, this also starts with “O drug” of Bristol Myers Squibb and “K drug” of MSD. These two drugs, as representative works of innovative drugs, were once regarded as money printing machines. In 2019 alone, the global sales of these two drugs reached US $8 billion and US $11.1 billion. These two drugs were also listed in China in 2018.
Subsequently, the Chinese market also set off a wave of innovation. From the end of 2018 to the beginning of 2019, there were three participants in the domestic PD-1 monoclonal antibody, namely Shanghai Junshi Biosciences Co.Ltd(688180) treprizumab, Cinda biological cindilizumab and Jiangsu Hengrui Medicine Co.Ltd(600276) carrelizumab. These three drugs were listed successively. At that time, the first indication approved by Cinda biological cindilizumab was recurrent / refractory classical Hodgkin’s lymphoma.
After these drugs were first listed in China, their prices were much lower than those of drugs O and K. among them, Xinda biological’s xindilimab was 159800 yuan, nearly half cheaper than drugs O and K. However, even if Xinda biological’s xindili monoclonal antibody was successfully listed in China and landed on the Hong Kong Stock Exchange in 2018, its loss in that year was as high as 5.8 billion yuan, and the adjusted net loss was 1.48 billion yuan
innovation dilemma of Cinda
Xinda biology, which took the lead, fell into a round of price war after round in the next track competition. When there are more and more competitors on the track, in order to further seize the market, Xinda biology entered the national medical insurance catalogue negotiation in 2019. Xindili monoclonal antibody was reduced from 7838 yuan to 2843 yuan, with a price reduction of 64%.
However, the good days of Cinda biology have not come yet. By 2020, a total of four PD-1 products will be included in the medical insurance catalogue. In addition to cindilimab of Cinda biology, Junshi’s trepril will be reduced to 906.08 yuan / piece, Hengrui’s Carrelli beads will be reduced to 2928 yuan / piece, and Baiji’s preley beads will be reduced to 2180 yuan / piece.
Under the influence of the price war, Xinda biology’s profitability has been very weak. According to the data, the cumulative loss from 2016 to 2020 reached 9.85 billion yuan. With 1.175 billion yuan in the first half of 2021, Xinda biology has a cumulative loss of more than 11 billion yuan. However, in order to expand the market, Xinda biology went overseas.
From the perspective of the secondary market, Cinda biology does not seem to bring much gain to the stock price of investors. At the beginning of last year, its share price once soared to HK $107.1 per share, and then corrected all the way. By the end of December 2021, the share price of Cinda biology had halved to around HK $45 per share, and the market value had evaporated by more than 70 billion yuan. This year, its share price is still going downhill.
The reporter noted that Cinda stressed in its latest announcement that although it was rejected, the FDA did not question the safety and effectiveness of cindilimab this time.
So, how does PD-1 work? Some scientific research experts analyzed in an interview with our reporter, “the production cost of antibody drugs is actually very low, but the quotation of many companies is still very expensive.” The expert believes that in terms of efficacy, PD-1 drug should actually be eliminated, the treatment effect is not ideal, and there is a situation that the patient’s dead horse is regarded as a living horse doctor.
