After 50 years establishing itself as one of the largest pharma companies in China, Jiangsu Hengrui Pharmaceuticals is launching Luzsana Biotechnology targeted at the global market. With a unique operating model, the Hengrui subsidiary aims to “quantifiably reduce costs” of medicines, its CEO said.
Originally Hengrui’s U.S. and European operations, Luzsana officially hangs its plaque Wednesday with a pipeline of 11 drugs from the parent led by China-approved PD-1 cancer immunotherapy camrelizumab.
Luzsana has its name rooted in “la luz,” which is Spanish for light, and “sana,” which is Latin for heal. The name therefore reflects the company’s aspiration to become a “healing light.”
To its chief medical officer Joseph Eid, M.D., Luzsana is a “startup like no other.”
'A startup like no other'
The company is only beginning to build its capabilities—Eid and CEO Scott Filosi just joined Hengrui last year, each bringing over two decades of pharma experience.
Eid was most recently head of global medical affairs at Bristol Myers Squibb and was key in building up Keytruda’s early medical affairs strategy while at Merck. Filosi had years of market access and drug launch experience across multiple therapeutic areas, including oncology. He joined from Merck KGaA, where he served as chief commercial officer for its U.S. pharma branch, EMD Serono.
While the business is relatively new, Luzsana emerges with a deep pipeline and all the support from a well-established legacy pharma parent. Eid compared the relationship between Hengrui and Luzsana to the one between Roche and Genentech. The difference is that while Genentech is Roche’s discovery engine, Luzsana is currently more a co-development and ex-China commercialization arm that’s built on Hengrui’s pipeline.
Unveiling the business with a new name rather than calling it Hengrui U.S. reflects a two-pronged strategic focus, Filosi said.
The legacy Hengrui boasts more than 250 clinical studies and an almost exclusive focus on China. Instead of trying to duplicate exactly what’s been done in China, Luzsana is now taking forward a subset of programs with “real innovation potential” after a careful evaluation process around clinical, regulatory and commercial feasibility, Filosi explained.
Secondly, “while there are many things that are universally true between how we co-develop medicines with Hengrui Pharma, there’s also differences from a cultural perspective, from a business perspective,” Filosi said in an interview with Fierce Pharma. Establishing its own identity allows Luzsana to make some independent moves in securing customers and recruiting talent, ensuring it can “hold onto the things that are complementary and then also take account for the things that are different,” he added.
Latecomer or 'glass half full'?
The 11 programs Luzsana is developing for the U.S., Japanese and EU markets have a heavy focus on oncology, and the majority of those assets are for well-known drug targets. Besides PD-1 inhibitor camrelizumab, the company’s late-stage programs also include PARP inhibitor fuzuloparib and androgen receptor antagonist SHR-3680. Its earlier candidates include four antibody-drug conjugates targeting HER2, HER3, TROP2 and Claudin18.2.
Eid labeled Luzsana’s pipeline (PDF) as “glass half full,” meaning it’s partly been de-risked. Eid and colleagues selected the programs based on three criteria. The drug either has a potential to be first in class or it could be first in an indication to shift an existing treatment paradigm. Alternatively, the drug is second or third to market but has the potential of being best in class.
Take camrelizumab, which has been approved in China under the brand name AiRuiKa across multiple indications. Just before Luzsana’s launch, Hengrui revealed that the drug’s combination with VEGFR inhibitor apatinib, also known as rivoceranib, topped Bayer’s Nexavar in newly diagnosed liver cancer patients in a global phase 3 trial.
Luzsana plans to talk to the FDA over the coming weeks about a potential application, Eid said. If approved, camrelizumab could be the second checkpoint inhibitor to enter front-line liver cancer, following a 2020 green light for Roche’s combo of PD-L1 inhibitor Tecentriq and off-patent anti-VEGF antibody Avastin.
The FDA’s high-profile rejection of Chinese biotech Innovent Biologics and partner Eli Lilly’s PD-1 inhibitor sintilimab raised concerns about the U.S. regulatory path for China-developed cancer drugs.
As Eid noted, camrelizumab’s liver cancer program doesn’t share sintilimab’s problems that drew the FDA’s ire. Rather than a single-country study, Hengrui conducted the liver cancer trial globally with multiple sites in the U.S. and had meetings with the FDA about the trial design.
In another wrinkle, neither camrelizumab nor apatinib—owned by Elevar Therapeutics outside China—is approved in the U.S. But Eid pointed out the FDA has a guidance that he helped draft years back on approvals for a regimen involving two new molecular entities. Besides, Luzsana has pharmacokinetics and clinical data on the individual drugs to convince the regulators that the combination is better than each drug, he said.
Even after camrelizumab makes it across the regulatory hurdle, the U.S. oncology market remains deeply entrenched Big Pharma territory, which isn’t very hospitable to a latecomer like Luzsana.
Still, Eid believes data rule in the U.S. cancer field, noting that Merck didn’t have much of an oncology presence before Keytruda. What’s more, the combined experience of Luzsana’s management team in tackling different links in a drug’s life cycle “positions us to deal with good news in a positive way,” he said.
As such, Filosi is now withholding a detailed description of camrelizumab’s market positioning pending “a deeper appreciation for the data” before making the final determination.
Addressing affordability in a tailored way
Another key question for camrelizumab centers on pricing. Before the FDA’s rejection, Lilly promised a 40% discount for sintilimab’s U.S. list price compared with existing PD-1s, which all come with an annual sticker of about $150,000.
Although Filosi didn’t directly answer whether Luzsana will play the price card for camrelizumab, the words “accessibility,” “affordability” and “availability” were brought up multiple times throughout the interview.
“What really struck me particularly over the last 10 years of my career … was this paradox,” the Luzsana CEO said. “We’re in an incredible time of innovation where you’re seeing more innovative medicines getting approvals than ever. But you look at the rate of accessibility, availability and affordability—it’s not keeping pace.”
“We’re not only an innovative medicines company, because, quite candidly, that’s not enough,” Filosi said. “It’s not enough if people cannot have access to these potential lifesaving medicines.”
But still, Filosi said the team recognized the current pricing and reimbursement pattern in the U.S. and will design its pricing accordingly. For infused drugs like camrelizumab, doctors may prefer a higher priced drug with a bigger discount than an alternative with a lower list price and hence a smaller rebate.
With Hengrui as its parent, Luzsana could “quantifiably reduce costs and then reinvest” in increasing access, Filosi said.
Because the discovery engine resides in Hengrui, Luzsana doesn’t have to take on the costs and risks of early research. By tapping into Hengrui’s China presence, Luzsana could potentially enroll patients and conduct clinical trials faster at lower costs. In addition, Hengrui is taking on manufacturing costs with its facilities in China.
Hengrui’s existing manufacturing sites are intended to meet the capacity and quality for global need, Filosi said. Even though Luzsana currently doesn’t have any concrete plans to build additional product footprints, it has “the flexibility to develop alternative supply solutions if that’s in the best interest of globalization,” he said.
For the foreseeable future, that leaves Luzsana only the responsibilities to co-develop and sell drugs outside of China. Commercialization preparations are already underway, starting with the hire of Jeff Crowther as president of commercial strategy and global operations.
Crowther played a key role in the launch of another Asian pharma’s U.S. subsidiary. As vice president of sales & marketing, he helped steer the launch of South Korean company SK Biopharmaceuticals’ SK Life Science and its first FDA-approved drug, anti-seizure therapy Xcopri.
Luzsana is currently at the early stages of building out its commercial capabilities and marketing strategy, which will center on the clinical data. The firm is now “mapping out” its stakeholders, including payers and a prescriber and patient base, Filosi said. When it comes to camrelizumab: “We will be ready when we have that opportunity to commercially launch.”