Author/Planner: Haoyue Capital Biopharmaceutical Industry Group This article is original from Haoyue Capital. Please leave a message at the end of this article if you reprint or cooperate.

Author/Planner: Haoyue Capital Biopharmaceutical Industry Group
This article is original from Haoyue Capital. Please leave a message at the end of this article if you reprint or cooperate.

April market

• Alnylam received 2 billion US dollars of Blackstone funding support: of which 1 billion US dollars was used to purchase the 50% license-out license fee of the PCSK9 small nucleic acid drug Inclisiran, 750 million US dollars was mortgage loan, 150 million US dollars was the R&D expenses of 2 cardiovascular drug pipeline projects, and 100 million US dollars in equity investment.
• days Guangshi completed RMB 1.13 billion Series C financing: investors are CICC Company (lead investment), CITIC Securities (lead investment), Hongxin Capital, Langmafeng Venture Capital, Weijing Capital, Paradise Silicon Valley, Chinese Academy of Sciences Venture Capital, Guohai Innovation Capital, Bank of Communications International, Yizhuang Guotou, Yuexiu Industrial Fund, Qingchi Capital, Guotou Chuanghe, Houji Capital (lead investment), Lize Capital (lead investment), and Kangchuang No. 1.
• Ruibo Bio completed RMB 470 million C+ round financing: investors are China State-owned Capital Venture Capital Fund (Guo Venture Capital Fund) (lead investment), Hillhouse Capital (lead investment), Free Trade Zone Fund, Langmafeng Venture Capital, CICC Kaide (lead investment), Shenzhen Zhonghui, Sinopharm CICC Fund, Hengxu Capital, and Hongtao Capital.
• Affinivax announced a $120 million Series B financing: is led by Viking Global Investors, with Bain Capital Life Sciences and Ziff Capital Partners. This is the first round of financing the company has completed since its inception in June 2014, when Affinivax received initial seed and Series A equity investments from the Bill & Melinda Gates Foundation. The company uses its initial investment, non-dilution grants, and partnership with Astras Pharmaceuticals to advance its new multi-antigen presentation system (“MAPS”) vaccine technology into clinical trials.
• Maiwei Bio completed a round A financing of 1.97 billion yuan: This round of financing is completed in two stages. Under the leadership of the leading investor Shiyu Capital, Oriental Fuhai , Zhengxin Valley Innovation Capital, Haitong Capital, Founder Hesheng, Ganzhou Development Investment, Huarong Rongde, Huajin Investment, Xinxi Capital, Ningbo Gaoling Fund, Suzhou Ruihua, Nanshan National Fund and other institutions participated in this stage of financing to jointly help the research and development and industrialization of innovative varieties of Maiwei Bio.
• Oncology Therapy upstart Erasca, headquartered in San Diego, United States, announced a $200 million Series B financing: This round of financing was led by ARCH Venture Partners and Cormorant Asset Management, followed by EDBI, Invus, Terra Magnum Capital Partners and other private and strategic investors, as well as existing investors City Hill Ventures, Colt Ventures and LifeSci Venture Partners. Erasca's proprietary artificial intelligence drug discovery platform, OPRA, currently covers Erasca's established drug discovery process, which will allow Erasca scientists to focus on the most promising strategies, thereby accelerating the process of drug candidates entering the clinical process.

*Across private equity financing transactions in April see the attachment at the end of the article

M&A section major events include:

• Fangda Pharmaceutical acquires US Biotranex and expands drug metabolism and pharmacokinetics (DMPK) services. Frontage Laboratories, Inc. ("Frontage Labs"), a wholly-owned subsidiary of Fonda Pharmaceuticals, has entered into an equity purchase agreement with an independent third party. Under the agreement, Frontage Labs will purchase all equity in Biotranex, LLC (“Biotranex”).
• Ping'anjin Village acquires Shengshi Baicao for RMB 1.2 billion. After the transaction is completed, Ping'anjin Village will become the controlling shareholder of Shengshi Baicao and hold 80% of the shares.
• Denovo Biopharma announced the acquisition of core assets of gene therapy pioneer Tocagen (TOCA.US), including global interests in the gene therapy platform (retroviral replication vector platform, RRV) and all related product pipelines (except for the Greater China interests only).
• Beijing Kangchen Biotechnology Co., Ltd. paid 900 million yuan in cash to Tailing International shareholder BVI Company (tentative consideration, payment in three phases) to purchase 100% of Tailing International's shares, thereby realizing the acquisition of the secret interest-covered assets. After the acquisition is completed, Tailing Pharmaceutical's subsidiary Tailing Asia will increase its capital in Kangchen Bio, with an estimated increase of 360 million yuan. After the capital increase is completed, the company will hold 40% of Kangchen Bio's equity.

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This month, the new drug company IPO accelerated its outbreak:

• Kangfang Bio was listed on Hong Kong stock on April 24: the financing amount exceeded US$300 million, and the cornerstone investors gathered. It was led by Fidelity and Lake Bleu, and famous investment institutions such as OrbiMed, Boyu Capital, Hudson Bay, Guoxin Guoxin Dongwu Overseas Fund, AIHC Capital, China Construction Bank Capital and China State-owned Enterprise Structure Adjustment Fund participated.
• was handed over to all two companies for listing: Guizhou Sanli Pharmaceutical Co., Ltd. was listed on the Shanghai Stock Exchange on April 28, 2020; Wantai Bio was listed on the Shanghai Stock Exchange on April 29, issuing 43.6 million shares, with an issue price of 8.75 yuan, and raised 381.5 million yuan.
• Huluwa's initial public offering application was approved by the China Securities Regulatory Commission: it will be listed on the Shanghai Stock Exchange, and this time it plans to raise 436.5028 million yuan.
• Kati Bio reverse acquisition and listing, and Asian Grocery entered into a purchase and sale agreement with the seller (Kati Bio). The seller agreed to promote the restructuring and the company had the conditional agreement to acquire the interest for sale from the seller. According to the restructuring, Kati Biotech (Shanghai) Biotechnology, registered shareholders and personal beneficial owners will undergo restructuring, and the company will seek to acquire Kati Biotechnology and its target intermediate holding company under the sale and purchase agreement. In terms of the
• Science and Technology Innovation Board, Chengdu Pioneer was listed, with a total fundraising of 834.7536 million yuan; CanSino Biologics, Fudan Zhangjiang, and Shenzhou Cell successfully passed the meeting; Alice, Yuandong Biologics, and Yuekang Pharmaceutical have submitted listing applications.
• In terms of Nasdaq, Zetalis Pharmaceuticals and Keros Therapeutics were successfully launched.

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Selected introduction

Hot trends ｜RNA Drugs-The beginning of the new era of medicine

Case study and judgment ｜Vaccine market is huge worthy of continuous attention, technological innovation vaccines are sought after by the capital market

Deep insights

[Hot trends ｜RNA drugs-The beginning of the new era of medicine

RNA not only acts as a messenger (mRNA) for protein synthesis, but also has very important regulatory functions. RNA research continues to emphasize the diversity of the structure and function of RNA molecules. Because of its diversity characteristics, transformation and clinical researchers have inspired development of RNA-based therapeutic drugs to address a variety of medical applications. Currently, the most mainstream RNA drugs are siRNA and mRNA drugs.

RNAi phenomenon is actually a post-transcription gene silencing (PTGS) that degrades mRNA. Double-stranded RNA can be cleaved into multiple small fragments (21-23 bp, i.e. siRNA) by endonuclease Dicer in the cytoplasm. siRNA then combines with helicase in vivo to form a silencing complex (RISC). RISC induces degradation of mRNA that binds complementary to the antisense strand in siRNA, and ultimately silently expresses specific genes. RNAi technology was named one of the top ten scientific advances in 2001 by Science magazine. Andrew Fire of the Carnegie Institute and Craig Mello of the University of Massachusetts shared the 2006 Nobel Prize in Medicine or Physiology for discovering the RNAi mechanism.

siRNA drug is treated from the post-transcriptional level, and has obvious advantages over other drugs that play a role at the level of protein:

1) has a short preclinical R&D cycle and rich candidate targets;

2) has high specificity, high efficiency and long-term effectiveness. There have been many obstacles in the development process of

siRNA, among which poor system administration effect and serious side effects caused by off-targeting have become the biggest obstacles. After several years of difficult exploration, on the one hand, the development of gene sequencing technology has reduced sequencing costs, providing the possibility for the industrialization of small nucleic acid drugs; on the other hand, RNA modification technology has increased the stability of RNA in the blood, and breakthroughs in drug delivery systems have made drugs more efficient and safe.So in August 2018, the FDA approved the first siRNA drug Patisiran, for the treatment of hATTR degeneration in neurodegenerative disease; on November 20, 2019, it approved the second siRNA drug Givosiran, for the treatment of acute hepatic porphyria (AHP). They are all rare disease drugs that have been successfully developed by Alnylam's siRNA technology platform. Among them, Patisiran's full-year sales exceeded US$150 million in the first year of its listing in 2019, and is expected to double in 2020. Alnylam is a leading RNAi drug company and the most popular financing partner this month. It has received up to $2 billion in Blackstone Life Sciences to support the clinical development of its RNAi therapy Vutrisiran and ALN-AGT. The goal of this investment is to allow Alnylam to maintain its sustainability by no longer needing further equity investment. In addition, domestic siRNA drug research and development company Ruibo Biotechnology also received financing of up to 470 million yuan this month. It can be seen that the capital market is very fond of siRNA drugs.

siRNA drugs have shown successful treatments in the treatment of rare diseases, especially neurological and liver diseases. Due to the extremely low incidence rate and few people with rare diseases, the government has increased incentives for the development of rare diseases in recent years, including various clinical development incentives, such as tax credits related to clinical trial expenses, FDA user fee reductions, FDA assistance in clinical trial design, and a 7-year market exclusive period after the drug is approved for marketing, which has led to a high enthusiasm for the development of rare diseases. RNAi technology can play a role in known rare disease genes, overcome the disadvantages of the difficulty of certain target proteins being difficult to be used, and can make breakthroughs faster. The following are siRNA drugs that are currently in the late stage of research and development:

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With the successful development of siRNA drugs, the industry has increasingly recognized the clinical value of RNA drugs, so mRNA drugs came into being. The recent development of the new crown epidemic has pushed mRNA drugs to the forefront. Unlike siRNA silently expressing specific genes, mRNA drugs activate specific gene expression. The specific mechanism of action is to deliver mRNA synthesized in vitro to specific cells in the human body through a delivery platform, and then mRNA is translated into the protein or peptide required for immunotherapy for in the cytoplasm, thereby achieving the effect of treating or preventing diseases. Compared with other biological therapeutic drugs,

mRNA drugs have many advantages:

1) mRNA is easy to produce and purify in vitro, removing the complex process of protein drugs and viral vector preparation, and avoiding host protein and virus-derived contamination;

2) IVT mRNA has strong versatility in the production process and can quickly apply to produce different target proteins, saving drug development time and improving efficiency;

3) mRNA can be translated into proteins only if it enters the cytoplasm, and does not need to enter the nucleus, so there is no gene insertion and integration, Improve the safety of drugs;

4) can change its half-life by regulating sequence modification and delivery vector;

5) clinical trials have found that although the protein expression of mRNA is transient, it is effective for tumor immunotherapy applications and is conducive to the control of pharmacokinetics and dose.

Of course, various problems will also be encountered during mRNA drug development, including: mRNA is easily degraded by RNA enzymes in the human body; mRNA expression is not large enough; mRNA cannot be delivered accurately to specific tissues and cells to stimulate the correct immune response and treat diseases; the industrialized production of mRNA lacks reliable supply, etc. However, with the development of delivery systems and mRNA synthesis technology, mRNA immunotherapy for malignant tumors and infectious diseases has entered the clinical application stage.

Currently, the clinical anti-tumor mRNA vaccines are mainly Moderna, BioNtech and CureVac. Among them, Moderna's mRNA-4157 for solid tumors and BioNtech's BNT122 for metastatic melanoma have progressed the fastest. Both have conducted phase II clinical trials. The main anti-tumor mRNA development is as follows:

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infectious disease mRNA vaccines are mainly targeting influenza, respiratory syncytial virus RSV, HIV, etc., among which the fastest progress is Moderna's mRNA-1647 for cytomegalovirus, which is in clinical phase II.In addition, related vaccines have been specially developed for the new coronavirus, among which the fastest progress is Moderna's mRNA-1273, which is currently undergoing phase I clinical practice. The development of mRNA vaccines for major infectious diseases is as follows:

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It is worth mentioning that the mRNA personalized tumor vaccine and the new crown vaccine of China's leading mRNA innovation drug, Qisi Microbiology, is also expected to be promoted to the clinical trial stage this year. This also reflects that my country has made important breakthroughs in the field of mRNA vaccines.

Haoyue Capital believes that RNA drugs are increasingly favored by the capital market due to their unique technological advantages. At present, most of these RNA-targeting therapies are still in the preclinical development stage, and they need to be further verified in human clinical trials. We hope that with the continuous optimization and upgrading of various technical means, more potential RNA drugs can be put into clinical use to benefit more patients.

[Case Study and Decision ｜The vaccine market is huge and worthy of continuous attention, and technologically innovative vaccines are sought after by the capital market]

This month, there are many transactions in the vaccine project field. Among them, Maikekan Bio, which focuses on the research, development, production and sales of new influenza vaccines, new rabies vaccines, new rotavirus vaccines and new elderly herpes zoster vaccines, has received nearly 100 million yuan in financing from KIP Capital; Si'anxin Bio, which is mainly engaged in virus vaccine carrier platform technology and develops several vaccines including RSV vaccines, has received undisclosed equity investments from Changchun Hi-Tech; the new vaccine rookie unicorn CanSino, who has been sharpening its sword for ten years, submitted an IPO prospectus on the Shanghai Stock Exchange Science and Technology Innovation Board after listing on the Hong Kong Stock Exchange in March last year; the first domestic HPV vaccine was approved, and its R&D and production company Beijing Wantai Bio was listed on the first day of its IPO on April 29.

National policies support industrial structure optimization, vaccine companies are showing a concentrated trend, and the development of innovative vaccines is encouraged.

The latest version of the "Vaccine Management Law" passed on June 29, 2019 is the first time that my country has made a separate independent vaccine management law, supports the development of the vaccine industry and structural optimization, encourages the scale and intensiveness of vaccine production, and supports the research and development of innovative vaccines, new vaccines, and multi-connected vaccines and multi-valent vaccines. The new management method also divides vaccines into immunization planning vaccines and non-immunization planning vaccines. Previously, the classification methods were Class I and Class II.

Looking at the global market, the vaccine industry is also showing a development trend of concentrated R&D and production and shrinking the number of enterprises. From the perspective of the US vaccine industry, in the late 1960s, nearly 40 American vaccine manufacturers decreased to more than 10 in 2002, and by 2011, more than 80% of the global vaccine market sales came from five pharmaceutical companies. After GSK acquired the Novartis vaccine department in 2014, it further concentrated the vaccine market space, forming a situation where the four major kings of GlaxoSmithKline, Sanofi, Merck and Pfizer divided the market. The vaccine products with the highest sales volume were also firmly controlled by the vaccine giants. Investment opportunities and industry trends of

vaccine: adult vaccine, innovative second-class vaccine (non-immunization program vaccine), multi-link vaccine

China's vaccine market is gradually increasing with population aging and consumption upgrading. Unlike the US market, most of China's vaccines are vaccines for children aged 0-6 years old, while the adult vaccine market is still to be developed, and vaccines have been proven to be one of the most effective ways to prevent common diseases in the elderly (such as shingles). As the elderly population continues to increase, aging has driven China's demand for vaccines to increase.

With the development of the times and the economy, Chinese people's awareness of the benefits of vaccination has gradually increased, and more citizens are able to pay for the more expensive Class II vaccine (citizens' own expenses, non-immunization program vaccines that are self-inoculated). China's first-class vaccine enterprises have a high concentration, mainly from countries such as middle-class students; the second-class vaccine concentration is low, with nearly 40 companies. The market for Class I vaccines (immunization planning vaccines) is firmly controlled by national vaccines, and innovative Class II vaccines are the main development opportunities for private vaccine enterprises. State-owned enterprises of Class II innovative vaccines have first-mover advantages, but with market regulation and full competition, private enterprises such as CanSino, Watson, Constant, Hualan , and Zhifei began to gain the upper hand. Private vaccine companies have stronger R&D capabilities than state-owned enterprises and can support the research and development of new and innovative vaccines.

In addition, multi-linked seedlings are also the future development trend. Because for consumers, especially parents who vaccinate their children, they prefer multi-linked vaccines that can reduce the number of vaccinations, although they are expensive. For vaccine manufacturers, multi-linked vaccines are priced high and profitable, and can gather multiple vaccine markets to defeat their opponents and quickly occupy the market. Sanofi's Pentacel is currently the world's highest-selling five-unit vaccine, second only to Pfizer's 13-valent pneumonia-binding vaccine Peier and Merck's Gardasil. The R&D barriers of Duolian Miaomiao are that they have high requirements for the R&D strength of enterprises. Since the multivalent vaccine is successfully developed, clinical trials will be carried out again to ensure that its safety and immunogenicity are no different from single vaccines, R&D companies need to go through a longer R&D and market cycle and bear greater financial pressure.

The very popular HPV vaccine

The first domestic bivalent cervical cancer vaccine - "Xinkening" developed by Xiamen Xiamen Wantai Canghai was approved for market launch on December 30, 2019, and is expected to lead domestic peers about 2 years ahead. Its R&D company Wantai Bio was also recently (on the first day of its IPO on April 29).

Currently, the domestic vaccine stock market size is as high as 270 billion yuan, and the 1% vaccination rate is estimated to be 2.7 billion yuan based on the 1% vaccination rate. If my country has included cervical cancer vaccines in the planned immunization, the vaccine price has dropped to 100 yuan per person. According to the estimated 9 million new women of appropriate age in China each year, the annual incremental market size is about 900 million yuan. As the first domestic cervical cancer vaccine to be launched in China, it is expected that Wantai Canghai's vaccine sales revenue will usher in explosive growth in the next few years. The

preventive HPV vaccine also has limitations that cannot eliminate existing HPV virus infections, and can only prevent related price types and cannot cover all types. Therapeutic vaccines aim to achieve the effect of clearing viruses and infecting viral cells by inducing the body to produce a cytotoxic T lymphocyte immune response. Currently, the most representative of the therapeutic vaccine is Oriental's core product: the DNA therapeutic vaccine VGX-3100 for HPV cervical precancerous lesions has entered the third phase of clinical trials in the United States, and the National Drug Review Center of China also approved it to conduct the third phase of clinical trials in 2019. Xiamen Wantai Canghai Bio also carried out clinical trials of therapeutic vaccines. The future competition for the

HPV vaccine has become increasingly fierce. According to the official data of the CDE website, in addition to the approved Xiamen Wantai Canghai Biotechnology, there are 11 domestic companies that are applying for HPV vaccines, including Shanghai Biotechnology, Beijing Biotechnology, Wuhan Bowo, Shanghai Zerun, Kangle Guard, etc. The varieties include 2-valent, 3-valent, 4-valent, 6-valent, 9-valent, 11-valent and 14-valent.

vaccine unicorn company CanSino - Returnee Dream Team

Vaccine company CanSino, a vaccine company composed of many industry elites, is a rookie in the vaccine industry. The founder Yu Xuefeng was a lecturer in the Department of Biology at Nankai University and a scientist at IBEX Technologies Inc. He joined Sanofi Pasteur as an executive in May 1998. He has more than 30 years of rich experience in biotechnology research and development. In addition to local executives from well-known domestic vaccine institutes, the Institute of Military Science and the Institute of Lanzhou, the executive team also gathered foreign executives who had been at AstraZeneca, Pfizer Wyeth, Sanofi Pasteur and Novartis Pharmaceuticals.

CanSino is a high-tech biological product enterprise specializing in the research, development, production and commercialization of high-quality human vaccines, and has excellent technology and rich pipelines under development. Currently, the pipeline is developing 15 vaccines under development involving 12 diseases, of which 3 are global innovative vaccines; its two meningitis combination vaccines (MCV4, MCV2) are the first vaccines in China, and both have reached the clinical endpoint in controlled clinical trials. They have applied for NDA and have been accepted. They are expected to obtain the approval of new drug applications in 2020; one vaccine approved by it: Ad5-EBOV was approved in China in October 2017, which can be used for emergency use and national reserves.

This month, the vaccine rookie unicorn CanSino, who has been sharpening his sword for ten years, submitted an IPO prospectus on the Shanghai Stock Exchange Science and Technology Innovation Board after listing on the Hong Kong Stock Exchange IPO in March last year.The overall market value of listed companies in the field of

vaccines is growing: the booming development of

vaccine industry is also reflected in the secondary market. In the past five years, the stock market value of many vaccine listed companies has generally shown a continuous growth trend. Since its listing in March last year (2019/03), CanSino's current market value has increased by about five times compared with the same period last year, from HK$7 billion in the middle of last year (2019/06/28: 7.514 billion) to the current market value of 36.6 billion.

Other vaccine companies are also showing a continuous growth trend:

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To sum up, Haoyue Capital believes that my country's vaccine market is huge and demand continues to grow, which is a field worth paying attention to. Investment opportunities in the vaccine field are mainly concentrated in innovative second-class vaccines, larger adult vaccines and multi-connected vaccines. The barriers to China's vaccine industry include R&D capabilities, production quality supervision and intensive funding needs. Good vaccine targets require a strong team, advanced technology and strict quality supervision. We hope that with the continuous improvement of these conditions, China's vaccine industry will develop better and better.

April private equity financing transaction overview

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