How can global biotech seize the innovation high ground as an investment in R&D for new drug creation escalates?

The biotechnology industry, which brings together top energy resources such as global capital, technology and talents, is the ultimate arena for competing for “innovation” capabilities. In recent years, introducing policies such as “zero tariff” on imports, reform of the review and approval system, consistency evaluation, and medical insurance negotiations have forced pharmaceutical companies to develop in the direction of innovation.

At the same time, original drugs from China are gaining wider recognition worldwide — innovative medicines from China’s own research and development, which used to be a “pipe dream” to sell at high prices in international markets, are now the norm.

Against the backdrop of the standard of several Chinese innovative drugs, which regulatory bodies have repeatedly recognised in developed countries, the field of new drug creation in China is on the fast track of development.

Innovative drug development is a high-end technical job with long lead times and cumbersome processes.

The development cycle is generally very long, and creating a new drug is very tedious. Furthermore, there is a sense of “slow and careful work” in this high tech area of expertise.

The process of creating a new drug involves a series of different stages. Each of which must be completed before moving on to the next, in a well-ordered sequence.

The first stage of the “pipeline” of innovative drug development is the discovery phase, through which suitable target compounds are first identified. Approximately 51% of the identified target compounds can become new drug candidates through the drug discovery phase, followed by the pre-clinical stage. Around 31.8 per cent of drugs have already entered pre-clinical studies at this phase. At this time, roughly 31.8 per cent of drugs in preclinical studies can be advanced to clinical trials.

In general, the success rate for advancing a novel drug candidate from the clinical stage to regulatory approval is approximately 7.9%. The overall success rate for regulatory approval of a new drug is only about 1.3% due to the various cumulative barriers in the stages mentioned above. Clinical trials for new medicines usually include Phase I, Phase II and Phase III clinical trials. The entire process usually takes five to seven years, which is a long time frame.

The global biotechnology and pharmaceutical market continues to grow.

Globally, demand for pharmaceutical products and investment in the biotechnology and pharmaceutical industries have continued to rise in recent years. The Asia Pacific region, led by China, has seen the most significant increase in biotechnology and pharmaceutical R&D investment worldwide, rising from around US$33.6 billion in 2016 to US$48.9 billion in 2020, with an expected increase to US$77.5 billion by 2025, growing at a CAGR of 9.7 per cent from 2020 to 2025.

The biotechnology R&D sector, in general, is showing strong growth. According to data, industry researchers anticipate that R&D spending in the biotechnology and small and medium-sized pharmaceutical industries will grow at an 8.2 per cent CAGR from 2020 to 2025, outpacing that of the large pharmaceutical industry, which is expected to grow at a 7.1 per cent CAGR during the same period.

When it comes to this, the higher growth rates in the global biotechnology industry are mainly due to the following.

One is the shift of the primary source of innovation from pharmaceutical companies to biotechnology companies.

Secondly, funding for biotechnology companies has also increased rapidly, mainly benefiting from scientific advances in gene therapy and cell therapy. Precision medicine and immunology and the more flexible drug review and approval processes adopted by regulatory bodies in numerous jurisdictions have reduced clinical trial times and provided faster approval processes.

Public and private capital markets continue to increase investment in the biotechnology industry, and the size of funding for biotechnology companies is rising. Statistics show that global investment in the biotechnology industry has grown significantly from US$3.7 billion in 2010 to US$93.4 billion by 2020, representing a compound annual growth rate of 38.2% over the same period.

While the majority of investment has historically gone to North American biotech companies, investors are also showing increasing interest in biotech companies in the Asia Pacific, which will attract US$700 million and US$23.5 billion in 2010 and 2020, respectively, representing a compound annual growth rate of 42.5%.

Biotechnology innovation and research on the fast track of development

Despite the impact of the new crown epidemic pandemic that began early last year, the number of domestic biotech-related cross-border deals increased in 2020 compared to 2019 and even surpassed 2018. The tracking report shows that the biopharmaceutical and biotech sectors are the main reason for the rebound in deals.

With nine domestic biotech inbound deals last year involving financing from global private equity/venture capital houses and an average deal value of over US$150 million, the inflow of global capital also demonstrates the confidence of international private equity houses in China’s biopharmaceutical and biotech sectors.

This trend also indicates that the Chinese biopharmaceutical market continues to receive attention and investment from global biotech giants. The ability to out-license in international markets has become a critical competency for biopharmaceutical companies.

In recent years, the government has placed increasing emphasis on encouraging innovation in the healthcare industry. And the momentum of innovation in the industry has not stopped in the face of the difficulties caused by the new epidemic since last year, with innovation becoming the new normal in the Chinese pharmaceutical market. Right now, innovation in China’s life sciences and biopharmaceutical development has shifted from “rapid follow-through” to “full-scale innovation” and is on its way to becoming a global “best-in-class”.

Thus, driven by favourable government policy support and the emerging cell and gene therapy market, companies are increasingly focusing on innovative drugs and expanding their R&D capabilities and product lines. Strengthening R&D capabilities for innovative medicines and broadening product lines have been the driving force behind M&A activity in the biopharmaceutical and biotechnology segments in 2020.

HKND with YB1 actively competes in the new drug creation circuit.

In this context, several new innovative biotechnology companies have emerged in the industry. As the world’s first Salmonella drug delivery bacterial vector YB1, HK Pharma Lysozyme has also recently attracted widespread attention from the industry with its groundbreaking and innovative technological research results.

As a scientific and innovative R&D company focusing on developing and applying biomolecular drug delivery systems.we are developing YB1 lytic bacterial therapies for cancer immunotherapy and bacterial lytic therapies for antithrombotic therapy using our core technology product, YB1, a large molecule drug delivery vehicle.

The company’s research has demonstrated that YB1 is influential in delivering a wide range of large molecule anti-cancer drugs such as protein, mRNA vaccines, antibodies, and lysozyme viruses. It can carry a variety of thrombolytic therapeutic medications for the treatment of many types of thrombotic disorders.

The results of the R&D team’s experimental studies show that YB1 has strong technical compatibility with chemical drugs, immune checkpoint antibodies and cellular technologies such as CAR-T, increasing efficacy and diversifying product pipeline design.

We currently have several pipelines of products in development for YB1 applications, including seven YB1 oncolytic bacterial pipelines for sarcoma, melanoma and other solid tumours. And three YB1thrombolytic bacterial pipelines for YB1-carrying recombinant urokinase (rt-PA), YB1-carrying recombinant defibrinogenase and YB1-carrying fibrinolytic enzyme (plasmin). plasmin) in development for various thrombotic diseases.

As the YB1 technology matures and more innovative biotech companies in the industry move into broader markets, the global biotech and healthcare sectors will usher in a new era, and we look forward to a new round of industry explosion in the global biotech sector.