A technician works at the vaccine production workshop of CanSinoBIO in Tianjin on April 25, 2021. (PHOTO / FOR CHINA DAILY)
Two
leading Chinese mainland biotech companies, including the first vaccine company
to list in Hong Kong, have highlighted the advantages gained from global
investors and partnerships, by going public in the world’s second-largest
biotech fundraising center, and the largest in Asia.
The
heads of CanSino Biologics Inc and Innovent Biologics Inc shared their
experiences and lessons from the listings at the Biotech Summit hosted by the
Hong Kong Exchanges and Clearing, online on Thursday.
Vaccines are considered to be a small part of biotechnology, compared with other products such as pharmaceuticals.
Yu Xuefeng, co-founder, chairman, and chief executive officer of CanSino, said the company positions itself as a China-based global vaccine supplier.
The listing journey in Hong Kong was “eventful”, he said, noting the vaccine scandal in the mainland at the time.
He was referring to Changsheng Bio-technology Company, the Changchun-based second-biggest producer, which was accused of fabricating manufacturing and inspection data, including the rabies shot.
Yu Xuefeng said vaccines are considered to be a small part of biotechnology, compared with other products such as pharmaceuticals.
“The pandemic made people consider the importance of vaccines. CanSino speeded up global development,” he said. He noted trials in five countries involving more than 40,000 people.
For a small start-up, he said, “global collaboration is a main driving force”.
Michael Yu, founder, chairman, and chief executive officer of Innovent, said partnerships are critical. “We have over 20, (Eli) Lilly and Roche included.”
Last year the company signed a US$1 billion deal with Eli Lilly of the United States.
Michael Yu said Innovent’s first partnership was in 2015 and at the time it did not have products in the market. “The same year we did two deals of up to US$1 billion.”
He expects more deals to come.
In August 2020, Eli Lilly and Innovent strengthened a strategic alliance involving Tyvyt (sintilimab injection), an anti-PD-1 monoclonal antibody immuno-oncology medicine co-developed by the companies for use in the Chinese mainland. Lilly agreed to pay Innovent US$200 million to license for the US and elsewhere. Innocent would get up to
US$825 million potential drug milestones and double digit royalties. Eli Lilly received development and commercialization rights to Tyvyt outside of China.
Now, Innovent has five products. “We anticipate products in the US. That will help the growth of our business. We are heavily investing in research and redevelopment with partners globally to build a strong pipeline to help sustain the growth,” Michael Yu said.
“Partnerships and collaborations will continue to be our focus. I strongly becoming global collaboration to leverage and maximize the value of assets we are developing.”
Shi Yi, founder and managing partner, Lily Asia Ventures, said industry publications and trade journals show that Covid-19, and accelerated innovations globally, are among the top trends in the past year, or this year.
“Last year, the US FDA approved the 100th antibody drug. The first one was approved 30 years ago. It took almost 25 years to approve the first 50. But it took just six years for that number to get to 100,” Yi said.
He was referring to a monoclonal antibody product. These are biologics. Monoclonal antibodies are lab-made proteins that mimic the immune system’s ability to fight off harmful antigens such as viruses, the US FDA explains.
Yi said that while there is accelerated innovation globally, China is accelerating more.
A nurse prepares a dose of CanSino's adenovirus-based viral vector vaccine at an inoculation site in Shanghai, May 18, 2021. (PHOTO / XINHUA)
He said Lily Asia checked some indicators for the global biomedical industry, such as venture capital investment and new product approvals.
“We are amazed by the acceleration in China. In the first six months there have been 14 new products, approved and developed by local companies. For the whole year it would be 25 to 30 new drugs. That is 10 times just five years ago when there were only two or three new products each year,” Yi said.
Innovent CEO Michael Yu said the Hong Kong capital market facilitated the growth of the business.
“We have grown from zero to five products. Then we had 800 employees, now we have close to 6,000.” He said manufacturing capacity has also been increased.
Innovent also carried out four follow-on fund-raisings, he said.
He said that the capital raised in the listing was the largest for a non-profit biotech globally.
The four rounds of fund-raising provided sufficient capital for expansion “not only investing in manufacturing, but also R&D,” Michael Yu said.
The Hong Kong capital market provided “tremendous value”, he said.
The Hong Kong stock exchange is one of the best places in the world for a startup to become a private company. The listing in Hong Kong could help elevate the company's branding, generated support from investors, and helped build up a network.
The Hong Kong stock exchange is one of the best place in the world for a start-up to become a private company”.
CanSino’s Yu Xuefeng, said the listing in Hong Kong elevated the company's branding, generated support from investors, and helped build up a network.
“We are the first vaccine company to list in Hong Kong. Before that, not many really knew about CanSino. Now people know. This branding gives us credibility in a way. The global investor community gave us great support, including advice and insight,” he said. “It also helped to shape our own management [to] become more professional.”
Innovent CEO Michael Yu said the company draws up five-year and 10-year plans at its annual, off-site strategy meeting.
“This year it became clear to us to focus on two things — heavily invest in innovation, and globalisation.”
Innovent has to raise its innovation to global standards from Chinese standards, he said.
“The product has to be eligible for commercial success globally,” he said. “That’s a significant shift.”
These are the two major pillars in the business plan in the next five to 10 years, Michael Yu said.
Lily Asia’s Dr Yi said people and product are important to global investors.
Comparing Chinese entrepreneurs to those globally is “like comparing apples to oranges”.
This, he said, “may not be a meaningful comparison, because I find that global entrepreneurs are usually much more experienced. You will find a team that has been running big pharma for decades and coming out to start a company”.
“In China, the good ones are very good at execution. That’s important in the business and operating environment that is much more complex and evolving much faster than the global landscape,” Yi said.
“It’s much easier to make product comparisons, because it’s objective. Through this objective comparison, I am gaining confidence that Chinese companies are becoming globally competitive.
Drug development is a long process — it takes eight to 10 years. So you will not see overnight, Chinese products rallying the global market with their product.”
CanSino raised HK$1.25 billion in its global offering and listing of H-Shares in Hong Kong in 2019. It then carried out a secondary listing in Shanghai in August 2020.
Innovent Biologics, develops, produces and commercializes medicines for the treatment of cancer, metabolic, autoimmune and other diseases and listed in Hong Kong on Oct 31, 2018.