Source of this article: Times Finance Author: Li Aohua

Image source: Times Finance/photo

The "top stream" ADC (antibody drug conjugate) market information is continuous, and this time the protagonist is Hengrui Pharmaceutical (600276. SH）。

After trading on September 13, Hengrui Pharmaceutical announced that its subsidiary, Suzhou Shengdia Biopharmaceutical Co., Ltd., recently received the "Notice of Acceptance" issued by the State Food and Drug Administration, and the company's drug marketing authorization application for Ruikang trastuzumab for injection (R&D code: SHR-A1811) was accepted by the State Food and Drug Administration, and the product has been included in the priority review process for the treatment of locally advanced or metastatic HER2 mutated adult non-small cell lung cancer patients who have received at least one prior systemic therapy.

Rekang trastuzumab for injection is an antibody-drug conjugate (HER2 ADC) independently developed by Hengrui Pharmaceutical and targeting HER2. According to the announcement, up to now, Hengrui Pharmaceutical has invested about 624 million yuan in R&D expenses in SHR-A1811 related projects.

The indication for this marketing application is primary lung cancer, which is the most common malignancy worldwide. According to GLOBOCAN 2022 data, lung cancer ranks first in the incidence of malignant tumors and first in mortality among malignant tumors, with about 2.5 million new cases of lung cancer and about 1.8 million deaths worldwide every year, ranking first among the causes of cancer death. HER2 mutations are a relatively rare driver variant in non-small cell lung cancer (NSCLC), occurring in approximately 2% to 4%. Compared with other driver genes, HER2-mutant NSCLC has a shorter overall survival and a poor prognosis. In China, chemotherapy is still the main treatment after the progress of first-line standard treatment, and there is a lack of effective treatment.

ADC is known as the "biological missile" of tumors, and its principle is to link cytotoxic drugs similar to chemotherapy drugs with monoclonal antibodies to achieve targeted killing function on tumor tissues. Because of its combination of targeted therapy and chemotherapy therapy, ADC has quickly become the "new favorite" of new drug research and development.

In December 2023, Baili Tianheng (688506. SH) exclusively licensed the development and commercialization rights of its self-developed ADC drug BL-B01D1 to Bristol-Myers Squibb (BMS) in overseas regions, with a potential total transaction value of up to US$8.4 billion, setting a new record for the transaction value of China's new ADC drug "going overseas".

Since the beginning of this year, ADC's BD (Business Development) boom has continued. According to Pharmacube data, in the first half of 2024, there will be 24 ADC transactions around the world, and the total publicly disclosed transaction value of global ADC bioconjugates has exceeded US$16 billion, an increase of 65% from the transaction value of about US$9.7 billion in the same period last year.

Hengrui Pharmaceutical is also one of the participants in this BD boom. In October 2023, Hengrui Pharmaceutical licensed part of the rights and interests of SHR-A1904 (TROP2 ADC) and another innovative drug HRS-1167 to Merck Healthcare, a subsidiary of Merck KGaA, a subsidiary of Merck KGaA, Germany, with a total value of more than 1.4 billion euros.

Up to now, 12 new and differentiated ADC molecules have been successfully approved for clinical trials on Hengrui Pharmaceutical's ADC platform, among which SHR-A1811 (HER2 ADC), SHR-A1921 (TROP2 ADC) and SHR-A1904 (CLAUDIN18.2 ADC) have entered phase III clinical trials.

In terms of target and indication layout, SHR-A1811, which is currently the closest to approval, is a HER2 ADC that can be benchmarked against AstraZeneca/Daiichi Sankyo. Chinese trade name: Youhede; Code: DS-8201). From the perspective of the layout of indications, Hengrui Pharmaceutical's SHR-A1811 is quite similar to Enhertu.

SHR-A1811 has been approved for a number of clinical studies, including breast cancer, gastric cancer or gastroesophageal junction adenocarcinoma, colorectal cancer and non-small cell lung cancer. In terms of the above-mentioned cancer types, Enhertu already has an approved indication or has obtained good clinical study data in this indication.

Enhertu is currently the best-selling ADC drug, which was first approved by the United States Food and Drug Administration (FDA) in 2019. In 2023, Enhertu's annual sales reached $2.5 billion, beating Roche's ADC drug enmetuzumab (trade name: Kadcyla; Chinese trade name: Hesselay), which is the world's first approved HER2 ADC.

Kadcyla is the representative product of the second-generation ADC drug, and Enhertu is the representative product of the third-generation ADC. Compared with the previous generation of ADC drugs, the third-generation ADC has lower antibody immunogenicity, stronger targeting, better drug stability and pharmacokinetic efficiency.

Enhertu quickly topped the ADC sales charts thanks to its strong performance in indication expansion. In April this year, AstraZeneca and Daiichi Sankyo jointly announced that Enhertu had received accelerated approval from the United States FDA for the treatment of unresectable metastatic HER2-positive solid tumors, and is the first ADC drug that can be "cancer-free".

According to the People's Daily health client, Xu Bo, president of the Affiliated Cancer Hospital of Chongqing University, said that HER2 (human epidermal growth factor receptor 2) overexpression or amplification occurs in about 15%-30% of breast cancers and 10%-30% of gastric/gastroesophageal cancers, which can be used as prognostic and predictive biomarkers. Its overexpression is also prevalent in other malignancies, such as breast, gastric, ovarian, endometrial, etc.

According to Daiichi Sankyo's financial report, from April to June this year, Enhertu's total global sales reached 129.6 billion yen (equivalent to about 920 million US dollars), and it is expected that the annual sales in 2024 can reach 508.4 billion yen (equivalent to about 3.61 billion US dollars).

Enhertu comes at a hefty price, though. According to media reports, Enhertu's online price in China is 9,432 yuan/100mg, which is 2.6 times the domestic price of Roche Kadcyla. In the 2023 medical insurance negotiations, Enhertu also "failed" and failed to enter the medical insurance catalog.

According to Frost & Sullivan, the global ADC market is expected to grow from $7.9 billion in 2022 to $64.7 billion in 2030, with a compound annual growth rate of 30.0% during the period. The China Merchants Bank research report pointed out that from the perspective of global ADC clinical research and development targets, a total of 100 targets are under development, and among the new drugs entering the clinical stage, 46.7% of the new drugs are concentrated in the TOP10 targets, of which HER2 is the target with the highest concentration.

With more and more HER2 ADCs approved, can Enhertu, the "fairy anti-cancer drug", successfully "defend"? As the leader of local innovative pharmaceutical companies, can Hengrui Pharmaceutical get a big enough share of this huge market?

As the approval of SHR-A1811 progresses, these questions may soon be revealed.

View original image 1.88M