On October 30th, Jiangsu Hengrui Pharmaceutical Co., Ltd. (hereinafter referred to as "Hengrui Pharmaceutical", 600276. SH) announced that it had reached an agreement with German Merck. Hengrui Pharmaceuticals will license the Class 1 new drug HRS-1167 tablets (hereinafter referred to as "HRS-1167") with independent intellectual property rights and the injection SHR-A1904 (hereinafter referred to as "SHR-A1904") project to Merck for a fee.
It is reported that this is the first time Hengrui Pharmaceutical has reached strategic cooperation with a large multinational enterprise worldwide.
Dr. Jiang Ningjun, Director and Chief Strategic Officer of Hengrui Pharmaceutical, stated that, There is still a huge unmet clinical demand for cancer treatment globally. We are very pleased to work together with Merck to bring Hengrui innovative drugs to the world and benefit cancer patients worldwide. This time, we are working with Merck on PARP (Poly Adenosine Diphosphate Ribose Polymerase) The authorized cooperation in the field of inhibitors is an important milestone in the development of Hengrui's internationalization strategy. We look forward to accelerating research and development to drive innovation, bringing better treatment options to patients who have long faced treatment difficulties
Strong cooperation
It is reported that HRS-1167 is a selective, highly active, and oral PARP1 small molecule inhibitor independently developed by Hengrui Pharmaceutical and has intellectual property rights. It belongs to the second generation of PARP inhibitors. HRS-1167 is currently in the early clinical development stage and has the potential to treat more patients as a monotherapy and combination therapy.
SHR-A1904 is an antibody drug conjugate (ADC) independently developed by Hengrui Pharmaceutical and has intellectual property rights targeting Claudin 18.2. By binding to the target antigen on the surface of tumor cells, the drug is internalized and released into cells, releasing small molecule toxins to kill tumor cells. This product is currently undergoing phase I clinical trials in China, the United States, and Australia. Currently, there are no Claudin 18.2 ADC products approved for launch globally.
According to the agreement, Merck will obtain the exclusive right of HRS-1167 to develop, produce and commercialize in the world outside Chinese Mainland, the exclusive right of SHR-A1904 to develop, produce and commercialize in the world outside Chinese Mainland, and the option of HRS-1167 and SHR-A1904 to jointly commercialize with Hengrui Pharmaceutical in Chinese Mainland.
According to the terms of the agreement, Hengrui Pharmaceutical will receive a down payment of 160 million euros, a technology transfer fee and exercise fee of up to 90 million euros, as well as research and development milestone payments and sales milestone payments. The total potential payment amount mentioned above may reach up to 1.4 billion euros. In addition, Merck will also pay sales commissions of up to double-digit percentages to Hengrui Pharmaceutical.
According to Cortellis, nearly 10 companies worldwide are currently developing second-generation PARP inhibitors, ranging from preclinical to early clinical stages.
Hengrui Pharmaceuticals' HRS-1167 started its Phase I clinical trial in August 2022, only lagging behind AstraZeneca's AZD5305 and Nerviano Medical Sciences/Merck KGaA's NMS-293 in terms of progress, and is in the top three globally, comparable to AstraZeneca's other second-generation PARP inhibitor AZD9574.
This collaboration with Hengrui Pharmaceuticals has enriched our product pipeline in areas such as DNA damage response inhibition and ADC drugs, in line with Merck's expectations for external innovation and internal research and development strategies in the field of tumors. "said Danny Bar Zohar, Global R&D Director and Chief Medical Officer of Merck Healthcare, The synergy between them and our product portfolio has broad development potential, providing more treatment options for patients with refractory tumors. We look forward to fully leveraging Hengrui Pharmaceutical's rich professional knowledge, strengthening cooperation, and moving forward together
Internationalization acceleration
In the third quarter of this year, Hengrui Pharmaceutical's operating revenue was 5.845 billion yuan, a year-on-year increase of 2.24%; The net profit attributable to shareholders of the listed company was 1.166 billion yuan, a year-on-year increase of 10.57%. In the first three quarters of this year, Hengrui Pharmaceutical's operating revenue and net profit were 17.014 billion yuan and 3.474 billion yuan, respectively, with year-on-year growth of 6.7% and 9.47%.
In terms of innovative research and development, Hengrui Pharmaceutical continues to maintain a high level of investment. In the first three quarters, Hengrui Pharmaceutical's research and development expenses were 3.725 billion yuan, a year-on-year increase of 6.52%.
It is understood that in the second half of this year, Hengrui Pharmaceutical has authorized multiple overseas cooperation projects, demonstrating Hengrui Pharmaceutical's strong innovative drug research and development capabilities and its international strategic achievements.
On August 14th, Hengrui Pharmaceuticals announced an agreement with One Bio, Inc. in the United States to license the Class 1 new drug SHR-1905 injection project with independent intellectual property rights to One Bio, Inc. in the United States for a fee. According to the relevant agreement, the down payment and recent milestones amount to $25 million. In addition, based on the initial approval and actual annual net sales of SHR-1905 in the United States, Japan, and agreed European countries, One Bio will pay Hengrui Pharmaceutical a cumulative milestone payment of no more than $1.025 billion for research and sales.
On October 8th, Hengrui Pharmaceuticals announced an agreement with Dr. Reddy's laboratory in India to license the targeted drug pyrrolitinib maleate tablets project with independent intellectual property rights to Dr. for a fee Reddy's, the company will receive a down payment of $3 million and a maximum sales milestone payment of $152.5 million.
On October 17th, Hengrui Pharmaceuticals announced that it will license the Class 1 new drug injection Karelizumab project with independent intellectual property rights to Elevar Therapeutics in the United States for a fee. Elevar Therapeutics will have the exclusive right to develop and commercialize the combination therapy of Carelizumab and Antibiotic in the treatment of hepatocellular carcinoma worldwide, except for Greater China and South Korea. Hengrui Pharmaceutical is expected to receive a cumulative sales milestone payment of $600 million and subsequent additional payments, as well as a sales commission of 20.5% of actual annual net sales.