BeiGene has had a few busy weeks. In its home base of China, the company won national reimbursement for three products. Outside of China, it just signed Novartis as a partner on immuno-oncology therapy tislelizumab.
Even with Novartis' help, though, the PD-1/L1 field in developed markets could be tough for latecomer tislelizumab to penetrate. China is no cakewalk, either: Tislelizumab was among three domestically made PD-1s to newly land on China’s reimbursement list, but the entire group's reported 80% discount raised eyebrows.
The discount was shocking. But as BeiGene CEO John Oyler sees it, the class has reached a price sweet spot where additional major price cuts aren’t likely. And while BeiGene is a greenhorn in U.S. marketing, Oyler hopes tislelizumab's profile, especially in Asian-prevalent cancer types, could stand out, and that the Novartis collaboration gives it an opportunity to accumulate commercial experience outside China.
Novartis deal and ex-China commercialization
Novartis just paid $650 million up front for certain ex-China rights to tislelizumab, which was first approved in China in late 2019. While BeiGene has practically been running tislelizumab’s global development programs by itself, commercialization is a different story.
Oyler described the Novartis deal as a chance for BeiGene to get help “learning how to commercialize and build some capabilities” beyond China.
“We always wanted to be sure if we considered a partner that we would also be building capabilities for commercial in solid tumors alongside them,” Oyler said in an interview. So instead of handing all marketing responsibilities to its Big Pharma partner, BeiGene is retaining rights to co-market the drug in North America.
And to further beef up its commercial infrastructure, the company’s looking for marketed products—or near-to-market assets—to license in those markets outside China, Oyler said.
BeiGene leapfrogged to commercial stage when it took in Celgene’s China operations in 2017 and started handling the Big Biotech's blockbuster blood cancer med Revlimid, among others. U.S. approval of Brukinsa in mantle cell lymphoma marked its first step in the U.S. market.
Blood cancer is different from solid tumors, though, Oyler argued. It’s easier to build a hematology commercial team because the field is smaller, with a focused group of opinion leaders to enlist to get the word out, he said.
By contrast, PD-1 encompasses a host of different indications and more than a half-dozen top pharma players. Companies need a broad range of physician relationships to tap the market. All that could be too much for BeiGene to handle alone at this point, he added.
Oyler believes tislelizumab could compete in Asian-prevalent cancer types such as gastric cancer, liver cancer or esophageal cancer. “These are areas in which there’s not a lot of competition,” Oyler said. “We’re actually in the very first wave in those areas, and I think if we drive toward those approvals we’re not in a crowded space.”
Large indications such as lung cancer are still a must for almost any PD-1 that wants to be relevant, though. There, Oyler believes tislelizumab is “on the top end of the spectrum” with its clinical potential, in spite of the tough competition it would face in Merck's Keytruda.
The drug has just won Chinese approval for use alongside chemo in front-line squamous non-small cell lung cancer (NSCLC) after showing it could cut the risk of disease progression or death by 48% or 52% across two chemo regimens. And the drug’s first global phase 3, the Rationale 303 study in previously treated NSCLC, has reported life-extension results, though the exact data remain under wraps.
PD-1/L1 competition in China
Expansion ambitions aside, BeiGene’s still a Chinese company at heart. That’s why it has chosen those Asian-prevalent diseases for tislelizumab’s development programs. But in China, the PD-1/L1 competition is even more fierce with more homemade products competing alongside foreign blockbusters.
The recent 80% price reduction is brutal against a backdrop where most of the drugs have not been approved for major indications such as newly diagnosed NSCLC. For tislelizumab for example, its covered indications are third-line classical Hodgkin’s lymphoma and second-line PD-1-high bladder cancer. None of the foreign PD-1/L1 has coverage.
The possibility for even more dramatic price reductions when those key indications are added could be terrifying for the industry and raise doubt about the sales potential of the PD-1/L1 class in China. But Oyler believes the days of high double-digit discounts are over.
In terms of what patients are actually paying out of pocket, “I think we’ve got to a point where it’s unbelievably affordable, and I think that we’ve got there more quickly than probably some of us would have hoped,” Oyler said.
He pointed out that the price point today is even lower than what biosimilars have traditionally been pricing elsewhere. “Even when there’s a breadth of indications, how do you justify that?” Oyler said. So China’s health insurance regulators may be delighted that the PD-1 class has reached such low prices so quickly, but they won’t likely try to squeeze the field further, he argued.
“It’s not good for building an innovative industry, and clearly they’re going to be much more interested in looking in a different direction,” he said. While there could still be some additional decreases “from a token perspective,” there’s no need to be dramatic moving forward, he added.
China already has eight marketed PD-1/L1 inhibitors—four foreign-made and four by Chinese firms—and more are lining up from domestic players. But Oyler believes BeiGene's ahead of its competitors there based on its profile across clinical development, manufacturing, commercial infrastructure and reimbursement.
BeiGene has built a commercial team of 1,500 strong—and growing—in China. It tapped experienced biologics manufacturer Boehringer Ingelheim to ensure a reliable output from the start. Its clinical development program has enrolled more than 7,700 patients, with roughly a third outside of China. And now, it has secured national reimbursement.
Only about one-tenth of Chinese cancer patients that should get PD-1 are, and they’re only taking the medicine probably for a third of the amount of time they're eligible to use it, according to Oyler. The sheer volume of that untapped patient base leaves enough room for growth even in the face of competition and price cuts, he explained.
That said, the window for new entrants is closing.
“When you look at those [late] organizations and the investment that they’re going to be required [to make], the timing at which they would have data, the time at which they actually would get reimbursement in an indication that matters, the challenges at that point when they get on national reimbursement—can they get listed in hospitals and how are they going to build a commercial team that has scale … it just doesn’t make any sense,” Oyler said.
“What you’re going to see is there’s a class of people that were on time and there’s a class of people that are too little too late.”