Recently, innovative drug companies on the Science and Technology Innovation Board have successively handed over their third quarterly report cards. Judging from the performance of the 13 companies that have been disclosed, the total operating income was 16.3 billion yuan, a year-on-year increase of 81%, and the net profit attributable to the parent company was 5.8 billion yuan, a significant improvement year-on-year.

Among them, Allist's (688578) blockbuster product furmetinib continued to increase rapidly, with revenue exceeding 2.5 billion yuan in the first three quarters, a year-on-year increase of 88%, and net profit attributable to the parent company exceeding 1 billion yuan, a year-on-year increase of 166%; Baili Tianheng (688506) achieved operating income of 5.7 billion yuan and net profit attributable to the parent company of 4.1 billion yuan due to the receipt of a down payment of US$800 million from Bristol-Myers Squibb, demonstrating the unlimited potential of innovative drug companies.

In recent years, the innovation and development of China's biopharmaceutical industry is entering the "fast lane", from the past rapid follow-up to the current general innovation, and continue to move towards the development of leading innovation. The establishment of the Science and Technology Innovation Board provides a broad financing and development platform for China's innovative biopharmaceutical enterprises, breaks through the financial blockages of science and technology innovation, supports more innovative pharmaceutical companies to advance R&D projects faster, and brings innovative drugs to the market earlier, so that global patients can get more treatment options. At present, the Science and Technology Innovation Board has brought together more than 30 innovative drug companies, and has gradually grown into an important force in the research and development of domestic innovative drugs.

The implementation of R&D results is expected to accelerate again

Since the beginning of this year, the innovative drug company on the Science and Technology Innovation Board has achieved 6 new drug products approved for marketing in China, including Zepuning ®, Maiweijian ®, Gao Ruizhe ®, Betanin ®, Jin Lixi ®, and Junshida ®, of which 4 are national Class 1 new drugs. According to statistics, since 2021, 19 Category 1 new drugs with "global new" attributes have been approved to the market, accounting for about one-sixth of the total number of domestic Category 1 new drugs approved in the same period, and many of them have been supported by the national "major new drug creation" major science and technology project.

On the receiving end of the new drug marketing application, this year is also a frequent success.

On October 23, First Pharma Holdings (688197) announced that the new drug application for contatinib, a small molecule ALK inhibitor independently developed by the company, has been accepted by the National Medical Products Administration, which is expected to enrich the treatment options for ALK-positive non-small cell lung cancer patients in China in the future and further improve the accessibility of drugs for domestic patients. So far, all innovative drug companies listed on the fifth set of standards on the Science and Technology Innovation Board have achieved the listing of core products or submitted listing applications. According to preliminary statistics, since the beginning of this year, more than 10 new drugs, including Cantatinib of First Pharma Holdings, Zenidaltumab of BeiGene, Yipei Growth Hormone of Tebao Biologics, 13-valent pneumococcal polysaccharide conjugate vaccine of CanSino, Gesuprexib of Yifang Biopharma, and recombinant human thyroid-stimulating hormone of Zelgen Pharmaceutical, have submitted marketing applications, and the implementation of innovative achievements is expected to accelerate again.

In addition, in order to encourage the research and development of new drugs with obvious clinical advantages, the National Center for Drug Evaluation (CDE) launched the "breakthrough therapy designation" in 2020. Up to now, 29 indications of 16 products have been included in the Breakthrough Therapy Variety List. On October 10, BL-B01D1, an innovative drug independently developed by Baili Tianheng, was also included in the Breakthrough Therapy List by the National Center for Drug Evaluation (CDDE) for the treatment of patients with recurrent or metastatic esophageal squamous cell carcinoma who have failed to be treated with PD-1/PD-L1 monoclonal antibody combined with platinum-containing chemotherapy. So far, BL-B01D1, as the world's first and only bispecific antibody ADC targeting EGFR×HER3 in the clinical stage, has been included in the Breakthrough Therapy List by the National Drug Evaluation Center for 4 indications.

A number of innovative drugs have entered the European and American markets

With the strong support of policies, capital and talents for the research and development of new drugs, domestic innovative drugs have been more and more recognized in the international market, and Chinese innovative drug companies are gradually emerging in the international market. Throughout the long history of domestic innovative drugs going overseas, from Chipscreen Biosciences (688321) authorizing chidamide to achieve a breakthrough from 0 to 1 for domestic innovative drugs to go overseas, to BeiGene's (688235) zanubrutinib becoming the first new anti-cancer drug to be marketed in the United States, to Junshi Biosciences (688180)'s toripalimab becoming the first domestic innovative biological drug to be listed in the United States, and then to Baili Tianheng breaking the record of domestic innovative drug licensing transactions, innovative drug companies on the Science and Technology Innovation Board have been striving to be the first in the world. A number of major milestones have been created.

On October 4, BeiGene announced that tislelizumab TEVIMBRA® was commercialized in the United States for the treatment of adult patients with unresectable or metastatic esophageal squamous cell carcinoma (ESCC) who have received prior systemic chemotherapy (without PD-1/L1 inhibitors), and announced that the pricing of TEVIMBRA will be reduced by 10%® compared with other PD-1 therapies approved for this indication, thereby benefiting more local ESCC patients. The product was approved by the United States Food and Drug Administration (FDA) in March this year, becoming the second domestic PD-1 monoclonal antibody to be marketed in the United States after Junshi Biosciences' toripalimab, which is expected to further open up BeiGene's overseas business growth space. In the first half of 2024, BeiGene's overseas revenue reached RMB7.172 billion, a year-on-year increase of 106.15%, mainly due to the rapid expansion of its self-developed zanubrutinib in the global market.

Compared with BeiGene's "independent" overseas model, more innovative drug companies on the STAR Market choose to "join forces" to go overseas. According to incomplete statistics, more than 10 innovative drug companies on the Science and Technology Innovation Board have reached about 30 license-out cooperation agreements with overseas pharmaceutical companies. Among them, Bio-Thera (688177), a company on the Science and Technology Innovation Board, as a leading domestic biosimilar company going overseas, has reached about 14 license-out collaborations on 5 varieties of bevacizumab, tocilizumab, ustekinumab, golimumab and mepolizumab worldwide, including well-known overseas pharmaceutical companies such as Sandoz, Biogen, and Hikma, and has successfully promoted the marketing of bevacizumab and tocilizumab in China, the United States and Europe. It is expected that with the empowerment of high-quality partners, China's innovation will accelerate its foothold in the global market.

High-quality and affordable innovative drugs benefit the public and greatly reduce the burden of drug use

A number of drugs developed by the innovative drug company on the Science and Technology Innovation Board are the first domestic drugs in the field of diseases, breaking the monopoly of imports, not only providing more treatment options for domestic patients, enabling more patients to obtain high-quality treatment drugs at relatively affordable prices, and greatly improving treatment accessibility.

Take PD-1 monoclonal antibody, the cornerstone drug of cancer immunotherapy, as an example. Junshi Biosciences (688180)'s toripalimab was approved in China in 2018 and is the first domestic PD-1 monoclonal antibody marketed in China. With the inclusion of this product and BeiGene's tislelizumab and other domestic PD-1 monoclonal antibodies into the medical insurance, it has not only promoted the overall reduction of the annual treatment cost of PD-1 drugs from nearly 200,000 yuan per year to 30,000 yuan to 70,000 yuan per year, but also indirectly driven foreign pharmaceutical companies such as Merck to increase drug donation efforts to reduce the burden on patients. Since 2023, a number of domestic innovative drugs have landed in the European and American markets, the price advantage of domestic patients has been further revealed, and the pricing in overseas markets is on average at least 15 times higher than that in the domestic market. According to reports, BeiGene's tislelizumab is about 20 times higher than the domestic price in the United States, and Junshi Biosciences' toripalimab is about 30 times higher than the domestic price in the United States.

The 2024 medical insurance negotiation is imminent, judging from the 2024 version of the national medical insurance negotiation preliminary review list released by the National Medical Security Administration, innovative drug companies on the Science and Technology Innovation Board, such as Dizhe Pharmaceutical (688192), Bio-Thera (688177), and Shanghai Yizhong (688091), all have new drug products participating in this year's medical insurance negotiations, which is expected to further reduce the price of innovative drugs and greatly improve patient accessibility and affordability.