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The recent decision by Pfizer to disband its China sales team for the Prevnar/Prevenar 13 vaccine was a shock to the local industry. Alongside recent reports of several high-profile licensing deal failures, shakeups of local unit organizational structures and/or leadership, and against the background of rising geopolitical pressures, the development was the latest during 2023 to have been interpreted by some as signs of a shift in priorities regarding the China market within multinational corporation (MNC) global headquarters. GBI reviews that Pfizer decision as well as some of the strategic investment and partnership decisions taken by MNCs in China during 2023, finding that while market models may be evolving for greater efficiency, the commitment of MNCs to the China market appears undiminished.In contrast with other industries, multinational pharma firms have generally been more resistant to the recent geopolitical pressures to put distance between themselves and the China market. The Sino-US trade conflict that has been rumbling since 2017/18 has already brought some disruption to the health care industry, chiefly in the form of US sanctions on certain imported products, and, less directly, an FBI crackdown on foreign researchers working at US universities with potential links to foreign (read Chinese) powers. The COVID-19 epidemic conditions produced disruptions to the global supply of drugs, medical devices, and personal protective equipment that cast light on the degree to which MNCs have embedded the manufacturing of certain products within China. In response, the US drew up plans for relatively drastic reforms that would either incentivize or force pharma firms to re-shore API manufacturing. Despite the bluster from Washington, those plans were not enacted into the final law that emerged – the CHIPS and Science Act of 2022 instead focused exclusively on the tech sector: computer chips, semiconductors, and AI. Further, a presidential executive order issued in August 2023 barred US investments into China in relation to core technologies such as semiconductors and AI, but again left out biotechnology.Nevertheless, questions regarding MNC risk-mitigation strategies have arisen during the last 12 months. A report from the UK’s Financial Times (FT) in June purported that AstraZeneca had drawn up plans to spin out its China business as a separate entity. Citing insiders, the UK-based drug giant was said to have begun “discussing the idea with bankers several months ago”, while the FT also said that such planning had also been considered by other MNCs. The report was downplayed by AZ CEO Pascal Soriot during the Q2 2023 earnings conference call, described as merely theoretical contingency planning: “We study many, many things, many options, many strategies, many scenarios, 90% to 95% of what we study, we never put in place”. AZ’s head of international markets and China president Leon Wang dismissed the report as rumor mongering.Rather than geopolitical pressures, 2023 has seen intensifying market pressures and a divergence in performance for MNCs in China driving strategic changes. Companies with a high quotient of products in the public hospital system are weighed down by a double-whammy of price cuts at the beginning and end of drug lifecycles, via the National Reimbursement Drug List (NRDL) price negotiations and the volume-based procurement (VBP) tendering program. In contrast, Merck, Sharp & Dohme (MSD) in 2023 rose to become China’s largest pharma player in revenue terms thanks to sales outside of the NRDL system: the human papillomavirus (HPV) vaccine family Gardasil, and programmed death-1 (PD-1) inhibitor Keytruda (pembrolizumab). “ Consequently, products that have sufficient appeal to the consumer to generate out-of-pocket sales via alternative channels are viewed as a golden ticket under China’s new market conditions.”Pfizer’s Prevnar decision reflects broader trendsThe impact of these market pressures is reflected in recent deal-making trends, as MNCs have increasingly decided to seek local partners to handle the commercialization of certain portfolio drugs. While MNCs off-loading a non-priority expatent drug to a local partner has been relatively commonplace in the market for some years, in the last 12 months the practice is becoming more frequent and even extending to relatively new drugs or new launches (see Table 1).In late-November 2023, Pfizer decided to cut its China team for the Prevnar 13 pneumococcal vaccine, handing promotion and distribution duties to local partner Keyuan Xinhai Pharmaceutical, a subsidiary of Shanghai Pharma. As noted above, the move shocked the industry and added to concerns of a broader change in attitudes within MNCs to the China market.“ The competitive landscape both for Prevnar and vaccines in general should be considered as key factors in Pfizer’s decision. ”Since the 2019 introduction of the Vaccine Administration Law (VAL) in China, distribution of class 2 vaccines such as Prevnar–which are outside of compulsory inoculation programs and purchased by patients out-of-pocket is much more closely regulated, with procurement carried out centrally by provincial Center for Disease Control and Prevention (CDC) institutions. The one-invoice requirement adds to the burden on a vaccine manufacturer, which must build cold-chain distribution network capabilities entirely in-house, as well as the necessary government affairs capabilities for dealing with local CDC bureaus. Despite previously enjoying success by distributing and marketing Prevnar-13 independently in China, Pfizer has taken the view that a local partner is better able to penetrate the broad vaccine market (including lower-tier cities and medical institutions) and achieve commercial results more cost-effectively than an in-house team. The challenges facing Prevnar-13 are compounded by the launch of two domestically produced 13-valent pneumococcal vaccines, from Walvax and Minhai Bio. For any product in China, the rise of local competition means potentially lower pricing and requires greater coverage of the ‘broad market’ in order to maintain sales volumes.Pfizer is also following the successful example first set by MSD with its Gardasil vaccines. MSD put all of its vaccine distribution and promotion in the hands of Chongqing Zhifei Biological back in 2011, a partnership that now generates billions of dollars each year. The increase in innovative drug development by both MNCs and domestics has allowed companies like Zhifei Bio to establish business models built around offering marketing capabilities to outside partners – although Zhifei also has its own in-house portfolio as well. Zhifei has steadily built a marketing team of over 3,000 staff, while its network covers 31 provinces and can reach 30,000 grassroots health service points. The success of its partnership with MSD attracted UK firm GSK to form a similar partnership with Zhifei in October 2023, initially focused on the Shingrix shingles vaccine.The capabilities of local specialist Contract Sales Organizations (CSOs) are simply beginning to outstrip MNCs and impossible to ignore. Baheal Pharma is increasingly a partner of choice for small-molecule brands, while 2023 saw the first CSO-type partnerships for new launches. Eli Lilly filed migraine therapy galcanezumab for approval in June 2023, and immediately handed post-approval responsibilities for the drug to AffaMed Therapeutics, from distribution to doctor detailing. AffaMed was set up by private equity firm CBC Group (formerly C-Bridge Capital) in 2019, initially to act as a partner for Samsung Biologics’ biosimilar drugs. The firm now specializes in acting as a partner for foreign-based firms seeking entry to China with late-stage or already approved products, with a specialist focus on ophthalmology, neurology, and psychiatric disorders.At present, MNCs would appear to be moving towards a mixed approach to commercialization, maintaining in-house teams for specific products or therapeutic areas. While Pfizer has abandoned Prevnar-13, it retains commercial muscle in other therapeutic areas, for example acting as the exclusive commercialization partner for local firm CStone Pharmaceuticals under a 2020 partnership initially focused on the PD-L1 inhibitor sugemalimab. However, with increasingly professional and lower-cost options available, MNC sales teams may continue to shrink in the coming years. Two of the key deals during 2023 involved MNCs forming major partnerships with local distributors focused on large portions of their portfolio. In April, Pfizer announced a long-term collaboration with Sinopharm that will focus on mature brands, while Sanofi in December unveiled an in-depth tie-up with Shanghai Pharma, which will handle everything from import, distribution, to end sales for significant parts of the French firm’s portfolio, product specifics not disclosed.Ecosystem building and investmentsWhile the challenge of cost-effectively navigating China’s market channels may be intensifying, MNC leaders continue to make strong public declarations of confidence and commitment to the long-term prospects. In the last 12 months, MSD stated it plans to secure 50 new approvals for products or indications over the next 5 years, while Pfizer is targeting 12 new product entrants by 2025. Sanofi, AZ, and GSK, meanwhile, have all indicated they plan further investments to tap the surge of medical innovation beginning to emerge from China. GBI SOURCE data reveals the range of partnerships and investments made during 2023 by MNCs. These includes ecosystem building for newly launched drugs, particularly for those products aiming to reach China’s digitally savvy consumer directly, including partnerships with retailers, e-commerce platforms, digital health platforms and more. Hillhouse-backed Cowell Health was a popular choice, the firm among China’s largest and most sophisticated retail chains having been built up a network of 15,000 stores, including direct-to-patient (DTP) pharmacies and AI-backed smart warehousing and distribution capabilities, backed by online platforms for e-commerce and patient management. Baidu Health was another strong deal-maker during 2023, the firm’s capabilities in providing patient education to support new drug launches attracting both Roche and GSK. A selection of key deals during 2023 is provided in Table 2. There have also been significant investments in new manufacturing plants in China during the year from AstraZeneca and Novartis. AstraZeneca is putting USD 250 million into the second phase of its asthma inhaler plant in Qingdao, adding a production line for diabetes drug Xigduo (dapagliflozin, metformin), and investing another USD 400 million in a small-molecule plant in Wuxi city, while Novartis is adding its second radioligand plant in China via an investment of over USD 80 million. These investments reflect the benefits of reducing the margins of mass-market products by local manufacturing at scale, helping to ease the pain of local price cuts.MNCs adopt separate approaches to China-based “R” & “D”In the R&D field, MNCs all now aim to achieve global synchronous development for China due to the shortened market lifecycle and necessity for differentiated products on the market.

今年美国临床肿瘤学会年会(2023年ASCO年会)上，科伦药业控股子公司四川科伦博泰与默沙东公布了其联合开发的创新TROP2-ADC(SKB264，MK-2870)针对非小细胞肺癌(NSCLC)患者的II期拓展研究结果，效果喜人 。科伦博泰与默沙东的合作从去年开始。2022年12月22日，两家公司签署合作协议，科伦博泰将其管线中七种不同在研临床前ADC候选药物以全球独占许可或独占许可选择权形式授予默沙东在全球范围内或在中国大陆、香港和澳门以外地区进行研究、开发、生产制造与商业化。科伦博泰与默沙东合作的总额近118亿美元，涉及9款创新药物。全球TROP2 ADC比拼在全球TROP2 ADC的管线中，科伦博泰与默沙东的合作产品看上去比吉利德和阿斯利康/第一三共的都要好。科伦博泰在ASCO递交的数据中，可评估疗效的患者有39例(接受SKB2645mg/kg，Q2W)，客观缓解率(ORR)为44%（17/39），中位持续缓解时间(DoR)为9.3个月，6个月DoR率为77%。反观阿斯利康与第一三共的TROP2 ADC datopotamab在非小细胞肺癌患者中，客观缓解率(ORR)为24%(12/50)。吉利德TROP2ADC Trodelvy的一项试验显示，吉利德的 Trodelvy在非小细胞肺癌中的ORR仅为17%，这一数据让科伦博泰的SKB264看起来是同类药物中最好的。不同于头对头试验比较，交叉试验比较的基线特征不同，这将导致比较的结果可能不够客观。科伦博泰的这项试验仅包含国内的医院。国内EGFR突变阳性的非小细胞肺癌患者往往比西方患者更多，而EGFR突变阳性的非小细胞肺癌患者对化疗反应更灵敏，这有可能提高了TROP2 ADC的疗效。为了进行更加客观的分析，对比科伦博泰SKB264与第一三共的datopotamab中EGFR野生型患者的疗效。SKB264的ORR为26%，而datopotamab为19%。科伦博泰仍然领先，这与之前的对比结果一致。科伦博泰即将上市今年2月24日，科伦博泰递交港交所上市申请。昨日6月4日，据港交所文件，四川科伦博泰生物医药股份有限公司-B通过港交所上市聆讯。不过科伦博泰2021年、2022年营收分别为3232万元、8.04亿元；毛利分别为1179.7万元、5.27亿元；运营亏损分别为7.77亿元、4.19亿元；归属于权益股东应占年内亏损分别为8.9亿元、6.16亿元。导致科伦博泰亏损较大的原因是研发费用较高。其中，科伦博泰2021年、2022年研发费用分别为7.28亿元、8.46亿元。截至2022年12月31日，科伦博泰持有的现金及现金等价物为9296万元。参考资料：1.Asco 2023 – Trop2 could validate Merck’s savvy deal with Kelun | Evaluate2.https://www.163.com/dy/article/I6DU32SQ0511A0EF.html近期热门视频更多精彩视频，尽在佰傲谷视频号，欢迎关注~本周好文推荐如需转载请联系佰傲谷并在醒目位置注明出处﹀ 点亮在看，传递信息♥