After assigning away U.S. and Canadian rights to its PD-1 inhibitor, Chinese biotech Junshi Biosciences has found itself a Big Pharma partner for its home country.
In a strangely structured deal, AstraZeneca has signed on to help market Junshi’s Tuoyi, or toripalimab, for one particular indication—urothelial carcinoma—across China, plus all indications in certain “non-core areas” of the country, the Chinese company said Monday.
AZ has achieved great success in China thanks to its large scale of marketing outreach beyond the wealthy metropolitan areas, and that sizeable, localized commercial team could prove valuable to Junshi—and perhaps explain the odd mix of rights in this deal.
Tuoyi was the first homemade PD-1 inhibitor to be cleared in China, with an original go-ahead in previously treated melanoma at the end of 2018. The drug, used in tandem with chemotherapy, just added third-line nasopharyngeal carcinoma to its label a few days ago.
Financial details were not disclosed. Junshi will pay a service fee to AstraZeneca for its commercialization efforts. AZ agreed to an upfront payment—in an amount that’s yet to be decided—upon approval of Tuoyi in bladder cancer, Junshi said in a disclosure (PDF) to the Hong Kong Exchange. The deal currently covers five calendar years and may be extended for another five years if sales targets are met.
Neither AZ nor Junshi responded to requests for comment on the selection of bladder cancer as the main indication or on the exact definition of “non-core areas.” These areas likely fall outside of big cities such as Beijing and Shanghai, though.
AstraZeneca’s own PD-L1 inhibitor Imfinzi—which has been approved in China for stage 3 non-small cell lung cancer—did flop miserably in front-line metastatic bladder cancer, leading to an indication withdrawal in the U.S. Even though the company hasn’t given up entirely on the disease, its opportunity there seems very limited.
That fact offers a field without any conflict of interest between the AZ and Junshi immunotherapies—and makes Junshi’s PD-1 an opportunity for AstraZeneca to fill the gap left by Imfinzi.
AstraZeneca already maintains a large presence in China unparalleled by its Big Pharma peers. In 2020, the country delivered sales of $5.38 billion for the British drugmaker, making up one-fifth of the company’s total haul. But China’s 11% year-over-year growth marked a slowdown, thanks to COVID-19’s drag on AZ’s respiratory franchise, particularly the aging inhaler Pulmicort.
AZ’s also known for getting its innovative drugs, such as its targeted lung cancer med Tagrisso, quickly covered by China’s reimbursement scheme. The country’s national reimbursement drug list (NRDL) offers access to a large number of patients, but at a cost of major price cuts—and that’s where AZ boasts an advantage with its strong marketing presence.
To capitalize on the volume growth offered by NRDL, “you have to have a broad coverage of the entire country,” CEO Pascal Soriot said during an analyst call in November. “And we’re one of the few companies that have this broad coverage, reaching smaller county hospitals.” A county in China represents a region smaller than a city on the administrative hierarchy.
“We have a strategic advantage leveraging this existing network to grow volume across the country and take advantage of NRDL listing,” Soriot added.
AZ's extensive marketing reach is perhaps why Junshi tapped the British drugmaker to help with those “non-core areas” outside big urban markets for all Tuoyi’s indications.
The ability to quickly snatch market share could be important now that all of the currently approved, domestically made PD-1s have earned their places on the NRDL. To win national coverage this year, Junshi offered a discount of 71% for Tuoyi, according to pricing results unveiled Monday and compiled by PharmCube, a local pharmaceutical data service provider.
Pharma juggernaut Jiangsu Hengrui Medicine made an 85% concession for its camrelizumab, which is so far the only covered med with a front-line NSCLC indication. BeiGene, which is a Chinese oncology marketing force to be reckoned with, cut the price of its tiselizumab—which was recently licensed to Novartis for certain ex-China rights—by 80%. Innovent Biologics and Eli Lilly’s Tyvyt entered NRDL last year after a 64% discount for the tiny indication of third-line classical Hodgkin’s lymphoma.
The AZ pact follows Junshi’s licensing Tuoyi's North American rights earlier this year to Coherus BioSciences for $150 million upfront. In the U.S., the drug bears an FDA breakthrough designation in recurrent/metastatic nasopharyngeal carcinoma.
Junshi indicated that Tuoyi could be only the beginning of more collaborations to come with AZ. “Junshi Biosciences and AstraZeneca will continue to explore overseas business collaboration including the emerging markets and actively explore the possibility of expanding the depth and breadth of future collaborations,” it said in a statement.