Rongchang Biotech: 13 Years of an Innovative Local Pharmaceutical Company | People's Daily Health Client

From obscurity to fame, Rongchang Biotech spent 13 years. Fang Jianmin, co-founder, CEO and chief scientific officer of Rongchang Biotech told the People's Daily Health Client Reporter, “Since its establishment, Rongchang Biotech has always faced a fundamental problem: how can it embark on a path of new local drug innovation.”

The choice and persistence of Fang Jianmin and Rongchang Biotech for 13 years is also a footnote to China's local innovative drug ecosystem. According to the financial data analysis agency WIND data, a total of 107 pharmaceutical and biological companies went public in two years, more than the previous five years combined, and raised a total of 142.7 billion yuan in capital.

Second from left is the co-founder of Rongchang Biotech,

CEO and Chief Scientific Officer Dr. Fang Jianmin

The reason behind the successful launch of Rongchang Biotech is that China's innovative drugs have entered the harvest period. On March 9, 2021, Taytacip, the world's first dual-target lupus erythematosus drug, was launched in China.

Taytacip started in 2008. Fang Jianmin, who had been abroad for nearly 20 years, decided to return to China to start a business. At the time, research and development of innovative drugs in the country was still lackluster. Only 5 new Class I drugs were approved in China, but in Fang Jianmin's view, “huge opportunities are nurtured in desolation.” In 2008, Rongchang Biotech was first established. In a borrowed university laboratory, Fang Jianmin led Rongchang Biotech's first “adventure”. The target treatment field was systemic lupus erythematosus (SLE), which was almost empty.

Fang Jianmin told the People's Daily Health Client Reporter that the treatment of systemic lupus erythematosus is a dangerous peak in the field of new drug research and development. Over the past few decades, many new international drugs have failed. At the time, there was almost no medicine available for patients with systemic lupus erythematosus.

Zeng Xiaofeng, president of the Rheumatology and Immunologists Branch of the Chinese Medical Doctors Association and director of the Department of Rheumatology and Immunology at Peking Union Medical College Hospital, shared a set of survey data showing that as many as 1,000 people with 30,000 lupus erythematosus patients died.

“When the company first started, it was very difficult to find experienced technicians, and many basic techniques would be problematic. For example, inserting drug genes into the cell chromosome was one of the early tasks in the development of Taytacip, but at the beginning, our technicians had no experience and discovered that the genetically modified cells soon died, and none of the cells could be nourished.” Fang Jianmin told reporters.

“Due to repeated cell culture failures, some people had doubts about the project and their confidence was shaken. They thought this new drug project would not work. I was also under a lot of pressure at the time. Later, a cell culture engineer with some experience was recruited to slowly solve the problem and get the project on track. There are plenty of similar difficulties, and our young team slowly grew by touching stones across the river.” Fang Jianmin recalled that it took them more than two years from building a laboratory to applying for clinical trials alone.

In August 2015, “Opinions on Reforming the Pharmaceutical and Medical Device Evaluation and Approval System” was issued, which proposed improving the quality of review and approval and addressing the backlog of registration applications. Song Hualin, a professor at the Nankai University School of Law, who has been following pharmaceutical administration reform for a long time, told the People's Daily Health Client Reporter, “At this time, the Drug Review Center is intensively adjusting its institutional set-up based on international experience and introducing highly paid talents from home and abroad. The number of staff has increased several times, which initially solved the serious shortage of reviewers.”

At this stage, Taytacip had “good luck.” In 2015, Taytacip successfully obtained approval for phase II clinical trials. “In the next few years, we made full use of the reform policies introduced by the State Drug Administration to launch a series of phase II or phase III clinical trials through continuous communication with the Drug Review Center.” Fang Jianmin told reporters.

Researchers are in the lab

Carrying out compound screening research

In 2019, the “Drug Administration Law” ushered in the most comprehensive revision in nearly 20 years. Song Hualin believes, “This revision fixes the review system reform experience in the form of a law, further promotes the resolution of the previous approval process that is too long, and solves the problem that manufacturers are not highly motivated in R&D and innovation.”

In 2020, a total of 14 domestically produced Class I drugs were approved for marketing in China, the highest number in previous years. Rongchang Biotech's fate also took a major turn this year: the key clinical trial of Taitacip Phase IIb reached a major end, and data showed that its 48-week response rate in the high-dose group reached 79.2%. With this best-in-class questionnaire, Titacip was successfully approved for marketing in 2021.

“Many drugs in lupus targeted drug development have experienced roller coaster effects. They were terminated in clinical phase III, and the development process was full of thorns.” Zhao Yan, chairman of the Rheumatology Branch of the Chinese Medical Association, told the reporter that as the first new dual-target drug for lupus erythematosus in nearly 60 years, Rongchang Biotech achieved the first launch in China and the number one in the world for dual-target treatment of SLE.

Among the innovative drugs approved for marketing in 2021, in addition to titasip for systemic lupus erythematosus, verdicitumab developed by Rongchang Biotech is also among them as the first antibody-conjugated drug (ADC) in China.

vidicetumab

Shortly after verdicitumab was approved, Rongchang Biotech reached an exclusive license agreement of up to 2.6 billion US dollars with the internationally renowned biotechnology company Seattle Gene, setting the record for the highest number of overseas licensing transactions for a single product by a Chinese pharmaceutical company at the time.

Until then, few people in China were interested in antibody-conjugated drugs (ADCs), but Fang Jianmin was interested in ADC drugs for a long time. He told the reporter, “We started developing ADC drugs ten years ago. What is special about ADC drugs is that compared to ordinary monoclonal antibodies, ADC drugs can kill tumor cells more accurately and effectively. It is like a precisely guided missile, which can explode into enemy bunkers to achieve the best impact effect.”

However, given that ADC drugs were still empty in China at the time, and there was no experience to follow in terms of regulation, the clinical trial approval path for verdicitumab was full of challenges. From production processes to quality standards, from preclinical data to clinical design, there is too much uncertainty.

Fang Jianmin recalled that between the end of 2014 and 2015, since verdicitumab was the first innovative ADC drug to be declared for clinical trials in China, the Drug Administration held two special closed-door exchange meetings for this purpose. One meeting was even held for a day and a half.

“We have done a lot of research work around this ADC drug and provided a lot of data. We also did our best to cooperate with the regulatory authorities during the declaration process. The review of this drug is of great significance for subsequent declarations of other ADC drugs.” Fang Jianmin said that the efforts of both parties finally paid off. At the end of 2015, verdicitumab obtained clinical trial approval as scheduled.

“As for the relationship with Seattle Genes, we began exchanges between the two sides in 2018. In January 2019, I first met with the head of Seattle Genes. At that time, clinical trials of verdicitumab were still ongoing, and preliminary clinical data had already been obtained. In 2020, we obtained more data on indications such as urothelial cancer, stomach cancer, and breast cancer, and both sides agreed. Therefore, as long as the efficacy and quality of innovative local drugs are excellent, they are emboldened.” Fang Jianmin told reporters.

Under an exclusive global licensing agreement, Rongchang Biotech authorized clinical development and commercialization rights for verdicitumab outside of Asia (excluding Japan and Singapore) to Seattle Genomics. At the same time, Rongchang Biotech also received a gradient of net sales revenue of verdicitumab in the Seattle Gene region from a high single digit to about ten percent.

On March 31, Rongchang Biotech announced its second IPO on the Science and Technology Innovation Board, raising about 2.6 billion yuan in capital, which is already the total market value of many Hong Kong stocks and listed science and technology innovation companies. The last time this happened was on November 9, 2020. On the same day, Rongchang Biotech was listed on the Hong Kong Stock Exchange and hit a record for the highest global biotech IPO fundraising of 590 million US dollars that year.

From being listed on the Hong Kong Stock Exchange to landing on the Science and Technology Innovation Board, Rongchang Biotech, which is listed in both places, is known by the industry as an “upstart” in the Chinese biopharmaceutical industry. Fang Jianmin was impressed. Rongchang Biotech caught up with the good times.

Han Qi, a bioindustry development strategy expert at the Macroeconomic Research Institute of the National Development and Reform Commission, told reporters that until 2018, innovative pharmaceutical companies had always faced a common pain point: financing difficulties. 2018 was a watershed year. The popularity of Chinese biopharmaceutical companies to go public began in this year.

In April 2018, the Hong Kong Stock Exchange introduced the most significant listing reform in 25 years. For the first time, the door to open financing was opened to unprofitable biomedical companies, setting off the trend of pharmaceutical bio IPOs for the first time.

Subsequently, the Mainland Science and Technology Innovation Board and the Beijing Stock Exchange piloted a registration system one after another, allowing unprofitable companies to go public. The reform of the registration system had a profound impact on the development of China's biopharmaceutical industry. Coupled with factors such as strong support from national industrial policies and investors' pursuit of popular racetracks, biopharmaceutical companies set off another boom in listing.

Xuan Jianwei, director of the Institute of Pharmaceutical Economics at Sun Yat-sen University, told the reporter that the diversified listing standards on the Science and Technology Innovation Board, GEM, and Beijing Stock Exchange have greatly enhanced the listing expectations of start-ups and unprofitable pharmaceutical companies, and the Chinese pharmaceutical market has become a popular innovative market worldwide.

“Local innovation in China has already gone through the initial stage of 'barbaric growth' and is entering a stage of development of 'big waves. 'It is worth looking forward to. After' breaking ', real innovative drugs will definitely be left behind.” Xuan Jianwei said.

Rongchang Biotech's financing will be used to promote the international development of the company's core products and the promotion of clinical trials of other products in the pipeline. According to Rongchang Biotech's prospectus, the US phase III clinical trial for treating systemic lupus erythematosus has now started, and the US phase II clinical trial for IgA nephropathy began in September 2021.

Currently, Rongchang Biotech's viducitumab is undergoing multiple phase III clinical studies, including phase III trials for advanced HER2-positive liver metastasis breast cancer and phase III trials for HER2 low-expression breast cancer; RC28 (VEGF/FGF double fusion protein) is promoting phase II clinical treatment of wet age-related macular degeneration, diabetic macular edema, and diabetic retinopathy; 4 new drugs are undergoing phase I clinical research.

On March 29, 2022, Rongchang Biotech announced its 2021 financial report. The company's annual revenue was 1,424 million yuan, and net profit was 276 million yuan. This is also the first time Rongchang Biotech has achieved profit since its establishment. It is worth noting that Rongchang Biotech's R&D expenses are increasing dramatically, investing 711 million yuan in R&D throughout 2021.

Fang Jianmin insisted that Rongchang Biotech has a strong impression of local innovation in Chinese style. “Although we started with a lack of soil for innovation, we were able to get here. Apart from our more simple persistence than others, we have received the dividends of every reform. Now that our country has become a hot spot for innovation, our mission of innovation will continue.”

Source | People's Daily Health

Reporter | Xu Tingting, Tan Qixin

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