Die Ambition hinter dem Deals von 11,4 Milliarden US-Dollar hat keinen Anstieg der Aktienkurse gebracht.

Text | Hu Xiangyun

Editor | Hai Ruojing

Since October, the stock market of innovative drugs has shown a downward trend. Just when the industry was joking about "needing a big deal to boost confidence", the "big deal" really came.

On October 22, Innovent Biologics announced a licensing cooperation worth a total of $11.4 billion with Takeda Pharmaceutical, including a $1.2 billion upfront payment and $10.2 billion in potential milestone payments. Among them, the upfront payment includes $100 million for Takeda Pharmaceutical to acquire a 20% premium stake in Innovent Biologics. This money will be used for global pipeline R & D and corporate operations in an 8:2 ratio. In the future, if the traded products are successfully launched, Innovent Biologics will also receive a sales share in proportion.

It's equivalent to a single deal covering cash, equity, and profit sharing all at once, which is rare in previous BD licensing of innovative drugs.

Meanwhile, although the deal involves three products, IBI363, IBI343, and IBI3001, only the "option" of IBI3001, which is in the early - stage clinical trial, was sold. Most of the $11.4 billion was paid for the two pipelines of IBI363 and IBI343.

Schematic diagram of the specific cooperation content of the three products (Data source: Innovent Biologics announcement)

Innovent Biologics said that this deal has "broken the record of overseas licensing of Chinese innovative drugs". Globally, the total amount is only second to a $22 billion deal completed by Daiichi Sankyo in 2023.

The ambition behind Innovent's Co - Co:

Value Takeda's assistance in "building international capabilities" more

Besides the huge amount, the unique cooperation model of the PD - 1/IL - 2 bispecific antibody IBI363 is the core reason why this deal has attracted industry attention. This is the most core pipeline in this transaction, and the lung cancer data once amazed the industry at the American Society of Clinical Oncology (ASCO) annual meeting in June this year.

Innovent Biologics didn't sell IBI363 directly. Instead, it chose to be deeply involved in the subsequent global development of the product. It will share the development costs with Takeda Pharmaceutical in a 4:6 ratio, promote commercialization, and share the future sales profits or losses in the US market according to this ratio.

In the industry, this kind of deeply - bound cooperation is usually called "Co - Co". Previously, some BD professionals introduced that this model has relatively high requirements for the licensor's global clinical development capabilities and capital reserves, and it's very likely that part of the received funds will be used for the subsequent development of the pipeline. Therefore, few pharmaceutical companies choose to do so.

In China, the BD transactions that have publicly disclosed the adoption of this cooperation model are only the CAR - T therapy Carvykti between Legend Biotech and Johnson & Johnson, and BL - B0D1 (EGFR/HER3 bispecific ADC) between BioTrack Therapeutics and Bristol - Myers Squibb. Both are potential "blockbusters" that have attracted much attention. For example, the sales of the already - launched Carvykti in the first three quarters of this year were $1.3 billion, and the expected annual sales peak is $5 billion. According to the plan, the sharing ratio between Legend Biotech and Johnson & Johnson is 7:3 in China and 5:5 in other markets.

Correspondingly, once this "big bet" succeeds, it means that the licensor can get higher financial returns, and its global clinical development, registration, and commercialization capabilities will also be directly exercised and tested in "real - world battles". Previously, a founder of a pharmaceutical company told 36Kr that if Legend Biotech hadn't chosen to jointly develop Carvykti with Johnson & Johnson back then but sold the overseas rights directly, it wouldn't have been able to share the subsequent commercial achievements and achieve a leap in market value.

The latter point is exactly what Innovent Biologics values most at present.

Innovent Biologics has always been very clear about its goal of becoming a "global pharma". At the communication meeting on October 22, Chairman Yu Dechao first gave a time point: to become a globally leading biopharmaceutical company by 2030, with at least 5 global multi - center Phase III clinical pipelines in terms of assets; and to complete the construction of a global organizational structure from product R & D to registration and sales in terms of capabilities.

Schematic diagram of Innovent Biologics' pipeline

It's not easy for Chinese pharmaceutical companies to gain a foothold in the overseas market on their own. Although Innovent Biologics has taken many overseas actions before, most of them relied on partners. For example, it sold all the overseas rights of PD - 1 Sintilimab to Eli Lilly and directly received cash returns. Now, doing cooperative development is like finding a "mentor" in a multinational pharmaceutical company to jointly knock on the door of the US market.

"We don't just want to do business cooperation. We also want to improve the company's own capabilities through business cooperation," Yu Dechao explained.

It's reported that during the more than one - year negotiation period for the cooperation, Innovent Biologics did encounter potential buyers with larger scales and stronger capabilities in the oncology field. However, it finally chose Takeda Pharmaceutical because "the other party's degree of attention to the cooperation and the positioning of the clinical development and future development of the traded products in the next 5 to 10 years" are all in line with the company's strategic goals.

Although Takeda Pharmaceutical is a Japanese pharmaceutical company, it has been deeply involved in the European and American markets for a long time. Currently, the company's employees are distributed in more than 80 countries and regions around the world. In terms of the revenue structure, the United States accounts for the largest proportion, reaching 52%; Europe and Canada follow, accounting for about 23%. In addition, Teresa Bitetti, the global head of Takeda's oncology business unit, once worked at Bristol - Myers Squibb and was responsible for the US launch of the world's first PD - 1 drug, Opdivo. This is also an important reason for Innovent to choose Takeda.

Bet on the next - generation broad - spectrum anti - cancer blockbuster

Now, let's look at the products involved in the deal. At the communication meeting, Innovent Biologics repeatedly emphasized that "the potential of the molecule to become a cornerstone drug for the next - generation tumor immunotherapy" is the basis for the cooperation between the two parties.

The one that can best carry this hope is IBI363. It's the world's first PD - 1/IL - 2 bispecific antibody to enter Phase III clinical trials and is also the most promising one in Innovent Biologics' subsequent innovative pipelines. Mechanistically, it has the dual functions of blocking the PD - 1/PD - L1 pathway and activating the IL - 2 pathway. This means that it can not only effectively deal with the drug - resistant population who have failed traditional PD - 1 inhibitor treatments but also work on "cold tumors" with low or no expression of PD - L1.

These are all potential "big markets". For example, the industry's prediction of the market size of PD - 1 resistance reaches tens of billions of dollars.

Taking the indication of squamous non - small cell lung cancer (Sq - NSCLC), which the two parties have decided to prioritize for development, as an example, lung cancer is a high - ground for global anti - cancer drug development. Non - small cell lung cancer is the most core indication for the world's "blockbuster" Keytruda and is also an indication that all subsequent drugs developed based on the PD - 1 target need to consider.

At this year's ASCO, the Phase I/II clinical data of IBI363 announced by Innovent Biologics showed that in the 1/1.5mg/kg dose group, the objective response rate (ORR), disease control rate (DCR), median progression - free survival (mPFS), and median overall survival (mOS) were 25.9%, 66.7%, 5.5 months, and 15.3 months respectively. In addition, in the 3mg/kg dose group, the ORR, DCR, and mPFS were 36.7%, 90.0%, and 9.3 months respectively.

If compared with the existing standard therapy for Sq - NSCLC, the mPFS and mOS of Keytruda combined with chemotherapy are 8 months and 17.1 months respectively.

This means that IBI363 may bring potential and longer - term survival benefits to Sq - NSCLC patients.

In addition, another characteristic of IBI363 is its broad - spectrum nature. According to the clinicaltrials.gov website, besides non - small cell lung cancer, the indications under research for IBI363 also include melanoma, colorectal cancer, gastric cancer, esophageal squamous cell carcinoma, etc. Taking colorectal cancer as an example, the data announced at the ASCO conference showed that the median OS of IBI363 as a single - agent second - line treatment for advanced colorectal cancer is 16.1 months, higher than the existing standard treatment.

At the communication meeting, Innovent Biologics said that in the development of IBI363, from single - agent treatment of PD - 1 - resistant patients, gradually expanding to combination therapy, and then focusing on promoting first - line colorectal cancer and first - line non - small cell lung cancer, the judgments of the company and Takeda Pharmaceutical are highly consistent. "The key development directions determined by both parties in the first stage are completely the same."

However, there is also a voice in the market that all the above ambitions are based on the success of the Phase III clinical trials. If the data fails to meet expectations, the upfront payment already received will cover the huge development risks. Coupled with the recent decline in the market's enthusiasm for BD transactions, although the deal is significant, it has not pushed up the stock price of Innovent Biologics. On October 22, Innovent Biologics closed down 1.96%; on the 23rd, it closed up 0.65%.