Week In Review: CFDA Begins Reform Of China Drug Approval Process

Industry Insights

The CFDA has issued new policies to reduce the very long waiting times for approvals — both for clinical trial and marketing approvals (see story). According to a recent Ropes & Gray internet posting, the new rules: 1) expand the categories of new drugs that qualify for fast-track approval; 2) simplify the clinical trial approval procedure; 3) allow innovative companies to file for approval without owning their own drug manufacturing facility; and 4) classify drugs that are approved outside of China as generics for China approval.

Over the next five years, China’s spending on medicines will grow at a 6-9% CAGR, with a total drug spend of $150-$180 billion in 2020, according to a forecast released by healthcare consultancy IMS (see story). Just one year ago, IMS predicted that China’s drug market would grow at a 10-13% CAGR over the same time period. China’s expected economic slowdown is part of the reason for the revision, but IMS also thinks that, as more of China’s citizens gain access to medicines, there is a smaller driver for future growth. 

Deals and Financings

Nantong Jinghua Pharma (SHZ: 002349) struck a $50 million deal to acquire China rights for two anti-cancer monoclonal antibodies from Kadmon Corporation of New York (see story). The molecules, both of which are in preclinical development, are fully human anti-VEGFR2 and anti-PD-L1 mAbs. Jinghua also in-licensed rights to Kadmon’s mAb discovery technology. Jinghua made a $10 million equity investment in Kadmon and agreed to a $40 million milestone package plus a 10% royalty on sales. 

Lee’s Pharma (HK: 950) has in-licensed Greater China and Southeast Asia rights to a potential liver cancer treatment from Tragara Pharma of San Diego (see story). The drug is Tragara’s oral multi-kinase inhibitor, TG02, which is currently in Phase Ib trials in the US. Lee’s participated in Tragara’s $13 million capital raise and made an upfront payment. Tragara is eligible for milestones and tiered royalties on future sales, while Lee’s will be responsible for all development and commercialization costs.