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Akeso is banking on strengthening its relationship with Sino Biopharmaceuticals to gain a foothold in China’s cancer drug market despite being a latecomer. Photo: Dreamstime/TNS

Chinese cancer drug developer Akeso banks on pharma tie-up in race with rivals amid record-setting Hong Kong IPO

  • Cancer drug developer to seek approval in June for blood cancer drug to catch up with industry rivals in mainland China
  • Akeso IPO said to have locked up a record HK$166.5 billion of funds from retail investors in Hong Kong
Chinese cancer drugs developer Akeso is banking on a marketing tie-up with pharmaceutical major Sino Biopharmaceutical to catch up with competitors after a record-setting initial stock offering in Hong Kong.

The firm aims to apply by June for approval to sell its drug candidate for classical Hodgkin’s lymphoma patients, who either did not respond to treatments or relapsed after at least two treatments. Rivals Innovent Biologics and Beigene started selling their blood cancer drugs in late 2018 and late 2019, respectively.

“It is a bit late relative to our rivals, but we aim to catch up with them on commercialisation,” co-founder and chief executive officer Michelle Xia Yu said in an interview with the South China Morning Post. “Our collaboration with Sino Biopharmaceutical becomes very crucial.”

Michelle Xia Yu, co-founder and CEO of Zhongshan, Guangdong-based cancer drugs developer Akeso. Photo: Handout
The move could enhance the company’s appeal among investors who have rushed to participate in its HK$2.6 billion (US$335 million) initial stock offering last week. The IPO has locked up HK$166.5 billion of funds from retail investors, according to a stock exchange filing, a record amount under Hong Kong’s listing regime for biotechnology firms.

The stock, offered at HK$16.18 each, will start trading on Friday.

The Zhongshan, Guangdong-based company is seeking to strengthen its ties with Sino Biopharmaceutical, one of the largest in mainland China with more than 12,000 sales staff, according to Xia, after inking a joint venture last year.

Sino Biopharmaceutical last year paid 344.7 million yuan (US$48.7 million) for the exclusive right to sell Akeso’s lead drug candidate penpulimab in China. It belongs to the so-called “PD-1 inhibitor” injection drugs category, which are antibodies that bind to “targets” on the body’s immune cells and could restore their ability to kill cancer cells.
“We’ve seen a lot of interest from our customers in Chinese biotech names, given the large room for market expansion,” said Jay Lee, who analyses health care stocks at Morningstar in Hong Kong. “A common strategy is to first launch low-risk products, like a PD-1, to establish revenue and build a sales network, and use the cash to fund development of riskier but more innovative drugs.”

PD-1 inhibitors have been shown to be able to shrink tumours, partially or completely, for 22 per cent of cancer patients, according to a 2018 study on 6,700 patients cited in Akeso’s IPO prospectus.

If approved, penpulimab will compete with other PD-1 inhibitors like sintilimab from Innovent Biologics, camrelizumab from Jiangsu Hengi Medicine and tislelizumab from Beigene. They were approved for sales since late 2018 for classical Hodgkin’s lymphoma. They cost between 101,000 yuan to 119,000 yuan per year.

Innovent last year recorded 1 billion yuan of sales from sintilimab, which was co-developed for the China market with US firm Eli Lilly. Lymphoma as a broad blood cancer category is the sixth biggest cancer type in the US, but is not among the top 10 in China.

However, since certain PD-1 inhibitors have mostly been approved for treating many kinds of cancers abroad, they are mainly used in China to treat conditions they have not received approval for. They are typically sought by late-stage patients.

In the bigger oncology diseases in China, such as lung, colorectal and liver cancers, Xia believes Akeso still has a good chance of grabbing market shares even as giants like Merck and Bristol-Myers Squibb’s inhibitors have won approval in China to treat lung cancers with more than a year of head start.

Akeso aims to complete clinical trials on penpulimab and apply for approval to treat lung, liver and nasopharyngeal cancers in China from next year and 2022, CEO Xia said.

She added that penpulimab has shown more complete removal of the so-called ADCC effect – which erodes antibody drugs’ efficacy – compared to opdivo from Bristol-Myers Squibb. It could potentially achieve higher efficacy, Xia added.

Opdivo was approved in China last month for treating gastric cancer. Together with Merck’s keytruda, they are approved for treating multiple cancers including lung cancer in China. They sold for 222,000 yuan to 323,000 yuan per year of prescription.

“We may be a latecomer for the small disease categories [such as lymphoma] but we are fairly in line with our domestic rivals when it comes to the major disease categories such as lung, liver and gastric cancers,” Xia said. “The lung cancer drug market is very large with some 700,000 new patients every year, and Chinese firms can beat the multinationals on price.”

This article appeared in the South China Morning Post print edition as: Akeso to boost ties with Sino Biopharm