went from being ignored before to being “flattered” since the COVID-19 epidemic. The field of nucleic acid drug research and development is still a popular direction for investment and financing institutions to pay attention to during the capital winter. At present, investment institutions prefer the layout of technology platforms.
Recently, Shijiazhuang Pharmaceutical Group has launched the second phase of clinical trials for its new coronavirus mRNA vaccine against mutant strains. The domestic mRNA new coronavirus vaccine ARCoV jointly developed by Aibo Biotechnology, Watson Bio and Academy of Military Medical Sciences is being conducted in Indonesia, and Mexico. In the final stage of Phase 3 clinical trials, it is also considered a strong competitor for my country's first approved mRNA vaccine .
my country’s mRNA vaccine research and development competition has entered a new stage.
From no one paying attention to becoming a golden track in the eyes of investors, the two mRNA COVID-19 vaccines that have been launched globally have brought nucleic acid drugs into a new stage of development.
Nucleic acid drugs have overcome the "difficult-to-drug" and "undruggable" problems of traditional drugs, and have many advantages such as short R&D cycles, high R&D success rates, stronger and more durable effects, and related targets have become investors. The "sweet pastry" in my eyes.
According to incomplete statistics, there will be 29 investment and financing events in the field of nucleic acid drugs in my country in 2021, 17 more than in 2020, and the investment and financing amount will reach 12.912 billion yuan, an increase of 8.256 billion yuan from 2020. From 2021 to the beginning of 2022, 22 nucleic acid drug companies in my country have completed financing. In particular, Aibo Biotech's Series C financing of over US$700 million has set a new financing record in the domestic biopharmaceutical field. Sirnaomics, known as "China's No. 1 nucleic acid drug stock", was also successfully listed on the main board of the Hong Kong Stock Exchange at the end of 2021.
Liang Zicai, chairman and CEO of Ruibo Biotechnology , said that "although the field of nucleic acid drug research and development is hot, it is not hot enough and needs to be hotter." needs investment institutions to invest in some truly innovative companies. From the perspective of industry subdivisions, the current mRNA vaccines are overheated, and there are relatively few real small nucleic acid pharmaceutical companies in China. More capital is needed to support the research and development of small nucleic acid drugs.
Accompanying the enthusiasm for investment are people's concerns about homogeneous competition on the track and investment valuation bubbles. However, Zhang Peizhuo, chairman and chief scientist of Gemma Genetics, believes that due to the dispersion of the nucleic acid drug track, the relatively large number of available subdivisions and varieties, and the uneven development levels of domestic enterprises, there is no bubble in this field yet. .
In terms of investment trends, Fu Xiyong, founder of Emwei Pharmaceuticals, observed that there have been obvious changes in the field of nucleic acid drugs, that is, investors are paying more attention to technology platforms. Jiang Zeyou, an analyst at Haitong Pharmaceuticals, also agrees very much, "Currently, in this industry, more emphasis is placed on the verification of the overall technology platform, rather than focusing on one or two varieties." As for the reason, Jiang Zeyou explained that there are huge risks in the development of new drugs. , it is difficult for early-stage clinical projects to guarantee that they will always be in the leading position. Once this happens, investment institutions' investment in a single drug will be in vain. As long as the platform remains, the company's advantages will continue in the future.
In terms of the specific direction of research and development, Deng Liang, a partner of Huagai Capital Medical Early Fund, believes that the competitive landscape of domestic mRNA COVID-19 vaccines has obvious levels. Domestic leading companies such as Aibo Biologics and Sri Lanka Microbiology have already highlighted their advantages. Traditional large companies Pharmaceutical companies, such as Sinopharm, Shiyao , have also made arrangements in this field. In addition, due to the high difficulty of production quality control, the number of late entrants in this segment will continue to decrease.
In the field of small nucleic acid drugs, foreign companies are currently keen on using the GalNAc small nucleic acid drug delivery system to promote the research and development of small nucleic acid drugs targeting the liver. On the other hand, they are actively looking for a variety of new conjugation modifications to improve small nucleic acid drugs. It has long-term effect, encapsulation, reduces immunotoxicity, prevents degradation, and achieves better targeting in human cells.
So now that investors are more rational, what is the investment situation in the field of nucleic acid drugs? Can the field of nucleic acid drugs avoid the homogeneous competition situation of PD-1 drug research and development? Which investment directions are more promising?
In this regard, E Pharmaceutical Manager Media specially interviewed investors and entrepreneurs in the field of nucleic acid drugs.
Q1: What are the characteristics and trends of current investment in the field of nucleic acid drugs? What changes have occurred in the investment community’s focus on the field of nucleic acid drugs?
Deng Liang: The entire Hong Kong stock market and US stock market market has continued to decline this year. It is not as popular as the previous two years, but nucleic acid drugs are still relatively popular. I think we can focus on several directions. One is small nucleic acid modification methods and delivery technology companies; the second is nucleic acid drug companies targeting new targets and new indications; the third is that there are certain standards in the production process. advantageous enterprise.
Fu Xiyong: Investment institutions are still very interested in mRNA. In recent years, mRNA companies are still being born continuously. From this perspective, the industry is still in the growth stage. But there have been some important changes in recent years. Previously, investors would be interested in any type of mRNA company, but now investors pay more attention to the technology platform, such as whether the company has delivery technology, whether it has molecular design capabilities, and research and development capabilities in corresponding disease fields.
Lu Yang: In China, mRNA is the most popular field. Currently, there are at least 15 domestic mRNA companies that have received financing. The field of chronic lung cancer is really hot now. We have seen revolutionary breakthroughs in chronic lung cancer, and we have also seen that the emergence of new crown vaccine has benefited all mankind. No drug in the world has achieved such a high social impact in human history, and its great historical role cannot be overestimated. Seeing such huge development prospects, people will look forward to whether vaccines for many diseases caused by viral infections can be tried. Even AIDS , which has not improved after decades of research, has companies doing related research and development.
Xu Shi: mRNA technology will definitely mature in the future, and now is a good time to enter this field. However, some domestic investment institutions are prone to hesitation, hesitation, or even blindly following the trend when the market changes slightly. "The King of Chu has such a slim waist, many people starve to death in the palace." This has caused certain problems for the research and development of some domestic nucleic acid drug companies. Influence.
Q2: At present, traditional companies and innovative pharmaceutical companies have entered the nucleic acid drug track. Will it trigger a new round of " becomes "?
Liang Zicai: In fact, there are relatively few real small nucleic acid pharmaceutical companies in China, and more capital support is needed. There are many small nucleic acid companies in the United States, but there may be only a handful in China. This is because the small nucleic acid field itself has technical bottlenecks and is very technically difficult. However, the more it goes in this direction, the more people are needed to support and participate. Overall, although it is hot, it is not hot enough and needs to be hotter. In this process, some involution may also be inevitable. But whether entrepreneurs or investors, if they can work hard to do something unique, especially in extrahepatic delivery, instead of swarming on GalNAc, the vitality of the enterprise and industry may be stronger.
Wang Weimin: I have been working in the field of nucleic acids for more than 20 years. In the early days, I was very upset that no one paid attention to me. Now I am a little flattered. The current trend is that, basically, for projects in the United States, China can quickly keep up with them and become more and more cutting-edge. There are many technologies that have not been verified in the United States, but are also available in China.
Deng Liang: In the field of mRNA vaccines, the first-tier companies, Abbot Biotech and Smicrobiology, although their products are still in the clinical stage, as leading companies, the industry is also looking forward to the early release of their vaccines. The second echelon, traditional companies such as Sinopharm and CSPC, also have their own mRNA platforms. Because the production and regulatory approval of vaccines are actually relatively difficult.In the Chinese market, the iteration of traditional companies on new technology platforms is also worthy of attention. In the later stage, if companies plan to deploy a new crown vaccine, not only will they be relatively behind in time, but they will also be more difficult to commercialize.
Investment institutions now have higher requirements for the technology development and product layout of emerging mRNA vaccine companies. In the future, based on various considerations, I don’t think there will be more players in the market.
In the field of small nucleic acid drugs, the application of GalNAc technology has enabled the approval of some new products for small nucleic acid drugs, especially for some liver-targeted chronic diseases. At present, the main layout directions of foreign companies are to make full use of the functions of GalNAc to develop products related to liver targeting, and to find more new coupling-modified receptors and methods. Domestic companies can first develop ligand products targeting GalNAc and products targeting PCSK9. Small nucleic acid drugs have relatively good effects on some difficult-to-treat chronic diseases, and many metabolic diseases related to liver targeting can also be focused on. If a company cannot reach the top three in clinical development and commercialization, it must have a certain degree of effectiveness and at the same time lay out the research and development of new mechanisms, otherwise there will be problems like PD-1's involution.
Jiang Zeyou: I think will, but it may not be as volume as the IO target. There will be repeated research and development in the industry, because most of the main core technologies are open, and latecomers are in a state of following. At the same time, as delivery technology achieves breakthroughs and risks are reduced, capital is willing to enter this field. In addition, the success rate of FIC small nucleic acid drug development is relatively high, which also attracts more investors and is more willing to enter this track.
However, we may face challenges in terms of patent intellectual property rights in the future, such as patent disputes that are occurring overseas, and similar situations may occur domestically in the future.
The verification time and cost of the small nucleic acid technology platform may be longer than that of antibody development, and there are differences in scientific solutions. Combined with the return of capital to rationality after the last round of bubbles, the field of small nucleic acids will not be as complicated as IO targets.
Q3: Do you think there is a bubble in the field of nucleic acid drug investment?
Jiang Zeyou: Valuation bubbles are difficult to avoid in the development of high-tech fields. Nowadays, the investment valuation of nucleic acid drugs is relatively expensive. When it comes to investment, everyone is more concerned about whether there are products that can go overseas soon. At present, the entire track is paying more attention to the verification of the overall technology platform, rather than focusing on one or two varieties. Because there are risks in drug research and development, subsequent clinical development may lag behind competitors, and investment in a single drug will be "wasted." Therefore, everyone is generally deploying platforms. As long as the platform remains, the company's advantages will be available in the future. continued. So overall, the bubble is definitely there.
Zhang Peizhuo: I don’t think there is a bubble in . First of all, the gap between us and foreign countries is relatively large, and there are relatively many more subdivided tracks and varieties to choose from. In the field of mRNA, in addition to the new crown vaccine, there are also many directions that can be explored in preventive vaccines and tumor neoantigens. If they are dispersed, they will not form a competition similar to PD-1.
Secondly, most of the companies now are new entrants, and their foundations are uneven. In the long-term competition process in the future, the direction will be adjusted. It is still difficult to predict the competitive landscape many years from now.
Lu Yang: Now China's investment in is relatively hot, and the development trend is very good, but there is a big gap between the actual investment and international investment. China is developing very strongly in this field. Overall, our basic science in RNA is even better than that of Europe, and we are catching up with the United States. There are many companies in the industry conducting research and development on different projects, but the valuation is a bit too high. It is not known whether the same valuation can be maintained in the future, but overall, it is good to have a lot of funds coming in, and it may be necessary first. When it gets "hot" and there is a little bubble, the industry can have the motivation to move forward.
Q4: What aspects of a company are investors most concerned about?
Wang Weimin: The probability of a company’s future success is very important to investors.They hope that their investment will pay off, and they must invest in this team. The team has experience in the industry, and experience in transformation will be more valued by them.
Xu Shi: An excellent leader of a nucleic acid drug company must have a good scientific background, but not just a simple scientist can do this kind of work. They not only need to understand scientific knowledge in one field, but also integrate knowledge and technology from multiple fields and find its commercial application groups. Only by doing something collaborative in the industry and involving stakeholders in research and development can we move things forward. It pays more attention to whether there are experts in the team who have passed some system certification and . In fact, it is difficult for a talent who has been working in the company for a long time to obtain such a position.
Fu Xiyong: investors attach great importance to team composition. In a rapidly developing field, how the company develops and what the project can achieve ultimately depends on whether the company's people can make the right decisions and make the right choices at every critical node.
(This article is excerpted from the June 2022 issue of "Pharmaceutical Industry·E Pharmaceutical Manager")
