Merck & Co. and GSK are vying to buy new drugs for chronic diseases. Which companies still have BD opportunities? | Focus Analysis
Text by | Hu Xiangyun
Edited by | Hai Ruojing
After the oncology field, large - scale BD transactions in the chronic disease field are gradually emerging.
This week, Hengrui Medicine announced that it would "package" and conduct a BD deal with GlaxoSmithKline (GSK) for the overseas rights of its PDE3/4 inhibitor HRS - 9821 and the exclusive option rights for 11 innovative projects at a price of $500 million in upfront payments and $12 billion in milestone payments.
In this transaction, the 11 innovative projects cover fields such as oncology and autoimmunity, but they are all pre - clinical pipelines. Among them, the most prominent one in value is HRS - 9821, a new drug for the treatment of chronic obstructive pulmonary disease (COPD), which was approved for clinical trials at the beginning of July. Hengrui Medicine spent only 38.43 million yuan in total on developing this product, and the entire $500 million upfront payment in this BD deal is for it, which can be described as achieving great results with a small investment.
The success of HRS - 9821 is largely related to the booming R & D of new COPD drugs.
COPD is a typical large - scale chronic disease indication. The global market exceeded $20 billion in 2024. However, there has been no new iterative drug in this field for more than a decade. It was not until last June that the US FDA finally approved the first new - mechanism COPD treatment drug, the PDE3/4 inhibitor Ensifentrine, which comes from the British pharmaceutical company Verona. Earlier this month, Merck & Co. preemptively acquired Verona for $10 billion.
As a traditional "respiratory" giant, GSK's blockbuster product "Trelegy Ellipta" for treating COPD is about to lose its patent, so it is quite reasonable for it to spend a large amount of money on a new drug pipeline through BD.
It is also this transaction that makes Chinese pharmaceutical companies start to realize that beyond the star fields such as oncology and autoimmunity, there may still be great value hidden in the next - generation therapies for common and chronic diseases, and drugs in the "slow - burning" respiratory field are one of them.
So, why PDE3/4? After Hengrui Medicine, who else has a chance?
Sub - title 1:
The Butterfly Effect Caused by the "Certainty Product"
Just like Novartis' long - acting PCSK9 lipid - lowering drug Inclisiran injection that only needs to be injected once every six months and Eisai's new gout drug Dorzagliatin developed based on the star target URAT1, once a certain target emerges, it is bound to attract other pharmaceutical companies to compete for layout, either through self - R & D or purchasing pipelines in the same track. Now, the protagonist of this story has become PDE3/4.
COPD is a respiratory disease caused by irreversible damage to lung tissue. It is manifested as difficulty breathing, coughing, etc. The main risk factors are lampblack, dust, and chemical fumes. Especially after humans started smoking, COPD has become a common disease in the respiratory department and the "fourth leading cause of death" globally. China has the highest mortality rate from COPD in the world. However, due to its relatively low public awareness, when many patients realize they are ill and go to the doctor, their health and quality of life have already been seriously affected.
From an industrial perspective, the COPD treatment market has long been dominated by multinational pharmaceutical companies such as AstraZeneca, GSK, and Boehringer Ingelheim, with long - acting β2 - adrenergic agonists (LABA), long - acting anticholinergic drugs (LAMA), and inhaled corticosteroids (ICS) as the mainstay.
Image source: Caitong Securities
The vast majority of these drugs can only relieve symptoms, and there are limited treatment measures targeting potential inflammation or delaying disease progression. Previously, the "triple therapy" of LABA + LAMA+ICS was once regarded as the end - point of COPD treatment. The representative product in this regard is GSK's Trelegy Ellipta, whose sales reached £675 million in the first quarter of this year, a year - on - year increase of 15%.
This hormone - centered approach of improving efficacy through combination therapy obviously cannot meet the needs of everyone, especially for those patients who continuously experience acute exacerbation events, accounting for about 50% of the total patients.
However, with the continuous in - depth research on the pathogenesis of COPD in the scientific community, more drugs for the etiological treatment of COPD are expected to emerge. Take the PDE3/4 inhibitor, the protagonist of this transaction, for example. Its "popularity" is essentially due to the approval of Ensifentrine.
Reducing the acute exacerbation problems of patients is a very important indicator for evaluating the efficacy of COPD drugs. Clinical results show that Ensifentrine can reduce the rate and risk of moderate - to - severe acute exacerbations by 36% - 43%.
Benefiting from this, its sales reached $42 million in the six months after its launch in 2024 and increased to $71.3 million in the first quarter of this year. Market forecasts suggest that the peak sales of Ensifentrine may reach $4 billion by 2035.
"The explosion in the demand for PDE3/4 inhibitors is due to two reasons. On the one hand, there has been no broad - spectrum new - mechanism drug launched in the COPD field for a long time. On the other hand, it is due to the special mechanism of PDE3/4 inhibitors," said a person from a company engaged in COPD drug R & D.
PDE is distributed in various inflammatory cells in the human body, and there are up to 11 members in its family. Among them, inhibiting PDE3 can dilate the trachea, while inhibiting PDE4 has an anti - inflammatory effect.
"Previously, the industry over - emphasized the anti - inflammatory effect of PDE4, and there were many PDE4 single - target inhibitors under research. In fact, the effect of PDE3 in dilating the trachea and improving ventilation is more obvious. Since the dilation of the patient's trachea can directly relieve breathing difficulties, this is a very large demand. From the doctor's perspective, it usually takes two or three months or even longer to see the effect of COPD drugs, while the trachea - dilating effect of PDE3 means it takes effect faster and can obtain feedback on drug use within a few weeks, so as to determine whether long - term medication is feasible. Ensifentrine can both dilate the trachea and have an anti - inflammatory effect, and its affinity for PDE3 is thousands of times that for PDE4, which also contributes to its rapid growth in sales," the aforementioned company person believes.
The R & D failure rate of COPD drugs is very high. Sanofi and Roche have both encountered setbacks. This is also the reason why the market has high expectations for the BD of PDE3/4 inhibitors after the launch of Ensifentrine and the acquisition of Verona. Otherwise, it would be difficult for HRS - 9821, which has just entered the clinical stage, to get an "astronomical" upfront payment of $500 million.
After the licensing of HRS - 9821, the remaining BD opportunities for PDE3/4 in the COPD field are basically clear, and they will most likely be "monopolized" by Chinese pharmaceutical companies. Because the companies with advanced progress in global layout in this field are all Chinese companies.
Image source: Insight Database
In fact, compared with Hengrui Medicine, the R & D progress of the PDE3/4 inhibitors of the other two players, Chia Tai Tianqing and Haisco, is faster. Chia Tai Tianqing's TQC3721 has entered the Phase 3 clinical stage and was included in the breakthrough therapy variety by the CDE on July 29. Haisco's HSK39004 has entered the Phase 2 clinical stage.
From the perspective of buyers, Merck & Co. and GSK have just entered the field. Roche and Sanofi are researching other - mechanism COPD biological agents. Among them, Sanofi's core product Dupilumab was approved for the treatment of COPD not long ago. Pfizer, Johnson & Johnson, and Novartis have not made many arrangements in this field in the past, so it's hard to say whether they are interested. Apart from GSK, whether the other two "respiratory giants", Boehringer Ingelheim and AstraZeneca, will buy a PDE3/4 inhibitor may be the focus in the future.
Sub - title 2:
Who Else Has a Chance
Of course, although the certainty of PDE3/4 inhibitors has been verified, it does not mean that it will be the only participant in the "next - generation drugs" in the COPD field. In addition to small - molecule drugs, more and more biological agents for COPD have been developed in the past two years.
The pathogenesis of COPD is very complex and has not been fully confirmed. However, the industry generally believes that chronic inflammatory response is one of the most important causes of the disease. Among them, the increase in eosinophil levels mediated by the Th2 pathway has been studied more. Based on this pathway, many immunosuppressive targeted products have emerged in recent years, such as those targeting IL - 4Rα, IL - 5, IL - 33, TSLP, etc.
Moreover, some mature products have emerged from these different mechanisms, and most of the participants are multinational pharmaceutical companies.
Taking IL - 4Rα as an example, its representative drug is Dupilumab mentioned above. In the fields of atopic dermatitis and asthma, it is already a classic "blockbuster drug", with sales exceeding $14 billion in 2024. Clinical results show that in the COPD indication, "Dupixent" can reduce the rate of moderate - to - severe acute exacerbations by 30% - 34%.
Another representative product is Mepolizumab (IL - 5), which is in direct competition with Dupilumab. It was developed by GSK and was approved by the FDA for the treatment of COPD in May this year, but its efficacy data is slightly inferior to that of Dupilumab.
The aforementioned company person mentioned that although there is no product targeting the COPD indication of TSLP approved yet, it is still worthy of attention. Because it "is at the top of multiple inflammatory cascades", it can directly act on dendritic cells, promote the maturation of Th2 cells, and also act on a wide range of innate immune cells.
Currently, most of the COPD drugs targeting TSLP have entered clinical trials. The one with the fastest progress is Tezepelumab jointly developed by AstraZeneca and Amgen. Phase 2 clinical trials show that Tezepelumab may cover more COPD patients than Dupilumab. This product has been granted breakthrough therapy designation by the FDA.
Image source: Caitong Securities
In addition, more advanced new drug R & D technologies such as cell therapy have also shown great interest in COPD. The company person mentioned that the core of COPD treatment products mainly based on macromolecular antibody drugs is to play a role by inhibiting fibrosis and inflammation, which can solve the patient's ventilation problem, but it is difficult to "address the decline in the lung's gas - exchange ability caused by irreversible structural damage", and "when COPD progresses to a certain stage, the patient's gas - exchange function will be affected".
Stem cell therapy can repair the alveolar structure through airway basal stem cells and reverse the process of pulmonary fibrosis, which may solve this problem at the root. This year, in the pricing of stem cell therapy officially announced in Hainan Boao for the first time, the price for a single stem cell transplantation treatment for COPD is set at 150,000 yuan.
This is also a "common problem" of innovative COPD drugs. The prices of Ensifentrine and new biological agents are also not cheap. For example, the monthly fee for Ensifentrine in the United States is $3,000. In contrast, the cost of traditional treatment drugs is generally a few hundred yuan per month.
It can be predicted that in the future, the COPD drug market may form a "stratified selection" pattern. Traditional drugs will continue to play the role of "basic protection", while innovative products can cover more patients with difficult - to - treat conditions, thus promoting the more efficient development of the COPD treatment market through differentiated competition.