Dongyangguang Changjiang Pharmaceutical (01558) joined hands with Sansheng Pharmaceutical (01530) to jointly accelerate the launch of major innovative drugs to release clinical value

In recent years, under the trend of policies encouraging the development of innovative drugs, companies that truly have the ability to innovate, provide clinical value, and are at the forefront of pipeline advancement are standing out. The value rate has increased sharply. For example, Dongyang Changjiang Pharmaceutical, which continues to improve its ability to differentiate and innovate, and actively seeks opportunities for strong partnerships.

The Zhitong Finance App learned that after the market on November 25, Dongyangguang Changjiang Pharmaceutical (01558) issued an announcement stating that the company and Guangdong Dongyangyang Pharmaceutical (01530) subsidiary Shenyang Sansheng, a subsidiary of Sansheng Pharmaceutical (01530), signed a license agreement on clifutinib benzenesulfonate as the offender.

It is worth mentioning that this BD cooperation is Dongyang Pharmaceutical's second license-out cooperation deal since November of this year after reaching a $900 million BD deal with Apollo Therapeutics, highlighting that the company's innovative value is being highly recognized by more and more peer companies in the industry.

According to the terms of the agreement, Shenyang Sansheng will be granted exclusive commercial rights to clifutinib benzenesulfonate for specific indications in China, while Dongyang Pharmaceutical will receive a down payment of 60 million yuan, as well as subsequent R&D registration and commercial milestone payments. The license agreement is valid for at least 15 years from the date of signing to the date of the first commercial sale.

For Dongyang Pharmaceutical, this cooperation has undoubtedly accelerated the commercialization of the company's major innovative product clifutinib benzenesulfonate, laying the foundation for wider commercialization in the future; on the other hand, it helps the company continue to explore and expand the scope of application of FLT3) inhibitor drugs in single or combination medication, amplifying future commercialization value, and has played a key role in stabilizing the company's valuation, and is conducive to investors' long-term ownership of the company.

From an indication perspective, AML is the most common leukemia subtype in China, accounting for more than half of all leukemia patients. The incidence of AML is relatively low in people under 30, then gradually increases with age. The incidence rate is highest among the elderly over 70, with a median age of 68. AML progresses rapidly and is the leukemia subtype with the highest mortality rate. Due to its hidden onset and critical condition, AML treatment faces great challenges clinically.

The study found that FLT3 is one of the most common mutations in acute myeloid leukemia. According to the Zhitong Finance App, about 30% of newly diagnosed AML cases have FLT3 mutations, so the development of inhibitors targeting FLT3 has become a hope for treating such AML patients. From a market perspective, China's FLT3 inhibitor market reached about 4.5 billion yuan in 2022, an increase of 18.4% over the previous year; it is expected that by 2027, the market size is expected to break the 10 billion yuan mark, and the compound annual growth rate will reach 17.6% during the period.

However, judging from current treatment methods, among the drugs targeting FLT3 already marketed in China, sorafenib, sunitinib, etc. are first-generation FLT3 inhibitors. Such inhibitors are usually non-specific multi-target TKI inhibitors. They lack specificity for FLT3 and can easily lead to off-target toxicity, so there is an urgent need for a new generation of FLT3 targeted drugs to meet the growing demand for unmet treatment.

Clifutinib benzenesulfonate tablets (HEC73543), as a new-generation, high-specific FLT3 inhibitor in Dongyang Pharmaceutical's innovation pipeline, can block the continuous activation of the FLT3 signaling pathway caused by FLT3-ITD mutations, thereby inhibiting unlimited proliferation and anti-apoptotic effects of AML cells, and ultimately achieving the effect of treating AML. Compared with first-generation drugs, it has the advantages of low off-target effect and higher safety.

Judging from research and development progress, clifotinib as a single agent for relapsing/refractory AML is currently undergoing phase III clinical trials in China. It is the first domestically produced highly selective FLT3 inhibitor to enter phase III clinical trials. Phase IB/II clinical trials of its combined chemotherapy for patients with first-time AML are also being carried out simultaneously. Earlier phase I results showed that clifotinib showed higher cr/crh rates and good tolerability in AML patients.

Currently, Dongyang Pharmaceutical is rapidly advancing the phase III clinical trial of clifutinib benzenesulfonate. As the commercialization time for clifotinib benzenesulfonate gradually approaches, Dongyang Pharmaceutical's focus on this product is also beginning to shift towards commercialization of the product. Dongyang Pharmaceutical's announcement of commercial cooperation with Sansheng Pharmaceutical at this critical point is worthy of investors' attention.

There is no doubt that Dongyang Pharmaceutical and Sansheng Pharmaceutical are leading innovative pharmaceutical companies in China, and both have efficient promotion teams and strong commercialization capabilities. The reason Dongyang Pharmaceutical chose to cooperate with Sansheng Pharmaceutical is that in recent years, Sansheng Pharmaceutical has established a relatively complete commercialization promotion system in the field of hematological diseases, and this is deeply compatible with the clinical value of clifutinib benzenesulfonate, helping it quickly complete multi-level coverage in hospitals and pharmacies at all levels after marketing to benefit a wider range of Chinese patients.

The down payment and subsequent milestone payments brought about by this cooperation will also provide considerable financial guarantees for Dongyang Pharmaceutical's subsequent large-scale global clinical trials of clifutinib benzenesulfonate, promote the smooth passage of relevant research pipelines through the clinical research stage, reduce pipeline R&D risks, shorten the development cycle, and pave the way for Dongyang Pharmaceutical's future FLT3 targeted drug pipeline one after another.

Looking at it now, Dongyang Pharmaceutical has gradually built a good foundation for the international commercialization of innovative drugs with successive BD transactions for major varieties such as HEC88473 and clifutinib benzenesulfonate to release their commercial potential. It is worth mentioning that the company currently has more than 100 drugs under development in its R&D pipeline, covering diseases such as infections, chronic diseases, and tumors. Many of these innovative varieties have reached the middle to late stages of development, and also have license-out potential, which is expected to open up a wider space for BD transactions and cooperation for the company.

Meanwhile, in the current market environment where “more definitive enterprises” are preferred, as scarce high-value biomedical investment targets, Dongyang Pharmaceutical holds many potential assets for innovative drugs, and its allocation value is constantly increasing.