In tandem with Enhertu’s inclusion in China’s national insurance program, Daiichi Sankyo is planting a foothold in local production.
Daiichi will invest 1.1 billion Chinese yuan ($152 million) to build a new antibody-drug conjugate (ADC) manufacturing facility in Shanghai, the Japanese pharma said (Chinese), on the heels of China’s release of its updated National Reimbursement Drug List effective next year.
Daiichi’s AstraZeneca-partnered Enhertu was among 91 new additions to the list. Drugmakers typically make large price concessions in exchange for national coverage, and the 89 meds that went through pricing negotiations in this round took an average 63% discount. The exact cut made for Enhertu remains unclear.
Since its initial nod in China in 2023 for previously treated HER2-positive breast cancer, Enhertu has added HER2-low breast cancer, HER2-positive gastric or gastroesophageal junction cancer and HER2-mutant non-small cell lung cancer to its Chinese label.
Besides HER2-targeted Enhertu, Daiichi and AZ’s second ADC program, TROP2-directed datopotamab deruxtecan, is also under regulatory review in China. Per the two firms’ agreements, Daiichi is solely responsible for manufacturing both drugs.
The plant is expected to be operational in 2030, a Daiichi spokesperson told Fierce Pharma.
In its announcement of the new plant, Daiichi described the move as a major milestone in the company’s progress in China and a reflection of its commitment to China in the long run. The Daiichi spokesperson confirmed that this marks the first time that the company is establishing an ADC manufacturing facility in China, and that the products are for China.
Still, the size of the investment dwarfs in comparison to the roughly $1 billion that Daiichi is plugging into its production and development site in Pfaffenhofen an der Ilm in Germany. Along with adding capacity for making cardiovascular disease drugs, the expansion plan also features an increased focus on oncology, with new labs and manufacturing capabilities for ADCs.
Daiichi is expanding in China as its partner AstraZeneca has found itself in a predicament in the country. Several AZ regional sales executives have been charged and sentenced as part of an insurance fraud scheme in which employees fabricated patients’ genetic test results to make them eligible for the company’s EGFR inhibitor Tagrisso.
Leon Wang, who until recently served as AZ’s China and international business head, along with several other current and former AZ employees, was taken away by authorities. Allegations were made that employees had smuggled Enhertu and cancer immunotherapy Imjudo from Hong Kong to the mainland and that they had improperly collected patient data.
The investigation so far is limited to individuals and has not touched AZ as a company.
AZ itself has made heavy investments in China. In August, the British pharma again increased its funding for the construction of an inhalers facility in Qingdao, bringing the total investment to $750 million.
Editor's Note: The story has been updated with additional information from a Daiichi Sankyo spokesperson.