Two new public Chinese pharmaceutical companies are seeking to cash in on the country's rapidly growing market. Everest Medicines Ltd. (HKSE:01952, Financial) raised $423 million to push forward its pipeline of in-licensed drugs, while Genor Biopharma will pump the $371 million it raised into the company's cancer and autoimmune treatments. Both companies closed mega-rounds in June, with Everest securing $310 million and Genor garnering $160 million.
China's pharmaceutical industry has been growing rapidly in recent years and is expected to reach nearly $162 billion by 2023, taking a 30% share of the global market, an industry expert told a Chinese news website.
The opportunities in China have attracted plenty of capital. A recent report from Equal Ocean showed that in 2018, China's medical startups enticed a total investment of $2.7 billion, accounting for more than 7% of global investment. The figure doubled to $4.5 billion in 2019, or 11.60% of worldwide financing.
Shanghai-based Everest aims to develop drugs to treat cancer, autoimmune diseases and other chronic conditions. Farthest along is trodelvy, which the company in-licensed from Immunomedics (IMMU, Financial) before the company agreed to be acquired by Gilead Sciences Inc. (GILD, Financial).
Immunomedics recently got the Food and Drug Administration approval for trodelvy. It is indicated for the treatment of patients with metastatic triple-negative breast cancer who have received at least two prior therapies for the disease. Everest has rights to the drug in Greater China, South Korea and certain Southeast Asian countries and territories. It is now in clinical trials in China.
With help from its deep-pocketed and well-connected founders at C-Bridge Capital, the biotech brought in top executives as well as a wide range of programs in immunology, cardio-renal and infectious diseases, Endpoints reported.
The company made the biggest splash when it added seasoned pharmaceutical executive Kerry Blanchard, M.D., Ph.D. as CEO. He was formerly chief science officer at Innovent Biologics Inc. (HKSE:01801, Financial) and before that senior vice president at Eli Lilly and Co. (LLY, Financial), responsible for China drug development and external innovation.
For Genor, also based in Shanghai, the initial public offering cash infusion will be used to support its in-house breast cancer drug coprelotamab. Genor has completed phase three clinical trials on the medication in a quest to be the first among three domestically developed drug candidates to win approval to be used in China on late-stage breast cancer patients with the gene that can cause breast cancer.
"We aim to be a leading breast cancer therapies provider among domestic firms in three to five years," CEO Guo Feng told the South China Morning Post. "We are building a sales team for multiple drug candidates in this category, and our superior manufacturing capabilities mean we can make a good profit even in a competitive market."
Breast cancer accounted for nearly 20% of all female cancer incidences in China in 2018, according to the World Health Organization. Some 367,900 new breast cancer cases were recorded in 2018 in China.
Coprelotamab will compete against Swiss rival Roche's (RHHBY, Financial) Herceptin and Perjeta and GlaxoSmithKline's (GSK, Financial) Lapatinib to treat the same type of breast cancer in China.
Genor also has several antibody drugs against some of the best-known types of cancer. The company has a new research lab in San Francisco dedicated to producing biospecifics.
Disclosure: The author has a position in Gilead Sciences.
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