As China’s impact on drug sciences continues to grow, biopharma companies in the US and Europe have been carefully navigating the landscape of drug development in the world’s second largest pharma market. We’ll talk to some experienced players about ways large and small players can develop a truly global strategy — and everything that entails.


John Caroll: Well, good afternoon, good morning, or wherever you may be in the world today. I'm John Carroll, I'm the editor of Endpoints News, and I'm here for our final panel of the Boston Summit. We've had conversations with more than 35 executives as of now overall, and it's been a really interesting ride. I appreciate the audience for coming out and taking some time with us as I appreciate the panelists for taking some time as well.

I want to get started just with a housekeeping note for the audience. We're going to be taking questions from the audience towards the end of the discussion and I'm sure that they're going to be a lot of questions related to what everyone has to say today. If you do have a question, you'll see that there's a place there at the bottom of your screen to pitch a question.

We'll be screening those through and going over those at the course of the webinar, but if you do have one, go ahead and ask, and we will get to it if we can. I will just encourage you to direct it to a particular panelist if you wanted an individual to answer it or to the panel in general.

With that, I'm joined here today by Weiguo Su, who is the CEO of HUTCHMED, Hongbo Lu, the managing partner with Vivo Capital, Min Li, CEO of SciNeuro, Kerry Blanchard, the CEO of Perpetual Medicines, and Andy Liu, the Head of China for the CRO Novotech and our sponsor for today's discussion. I appreciate everybody joining us.

I think, in terms of China, I've been covering biotech for more than 20 years now, and for more than 10 years of that, I have been beating the drama about China for over and over and over again. I think in terms of the importance of the Chinese market for US biotech executives. I think, over the last 10 years, that's pretty well been born out.

I think it's in a very important market for everyone to pay attention to, not because it's the second largest market in the world necessarily, but because it's becoming one of the most innovative markets in the world. What we're seeing right now, coming out of China, is truly remarkable.

I don't think that anyone who would like to say that they truly have a global strategy for their company can really say that meaningfully, unless they include China in that, not just Europe, and not just saying something about China, but actively getting involved in China and understanding China and creating relationships, because the bottom line is, in this industry, everything is relationship-directed. Being able to establish relationships and alliances based on trust is extremely critical.

I'd like to open up this conversation. I thought maybe, Hongbo might start us off. You created not long ago, a really interesting partnership with Arrowhead in terms of bringing in some RNA therapeutics, but it wasn't your standard licensing deal with a Chinese player. Tell us a little bit about what you set up there, and how that worked out.

Hongbo Lu: Yes, absolutely. Well, first of all, I would like to thank John for beating the drum on China as well as partnering with us in promoting the industry  in the past 10 years, we really appreciate that. Then specifically, to your question, John, I would say we have seen the China-US biotech pharma relationship has evolved over the last 10, 20 years even starting from maybe just China being an API supplier, to China being a market.

Then to express the view of China being a market, there's way to do it through licensing deals. In the recent years, we have been experimenting with doing joint venture. The Arrowhead joint venture that we have done was a result of our partnership with Arrowhead in the US. By the way, if audience is not familiar with the fund I'm with, Vivo Capital has been in the US since 1996.

We have a very deep relationship with US biotech companies, and then I think any part of relationship and a partnership trust is fundamentally important and ensure the long-term interaction with that level of trust and the intention and the aligned vision and purpose to recognize China being, one, a substantial market, second, being a potential innovation source. From that end, doing a partnership through joint venture could have more long-lasting impact for both the China entity as well as the US partners.

That's the rationale behind the joint venture. Then I probably cannot disclose more than what we said in a press release, but we started with the license of four of Arrowhead's sRNA products, three being in clinic, and then with substantial capital infusion from us as a partner. Then basically, we went locally and then recruit a local team to execute clinical strategy, regulatory strategy, as well as potentially down the stream commercial strategy.

However, our intention is not just to build this up as Arrowhead subsidiary or build it up as an entity just to do execution for Arrowhead portfolio. We actually have the intention to develop internal discovery and potentially complement in some technical breakthroughs, maybe given its new target or deliver new delivery motifs, technologies, and potentially to help the joint venture also create another space for global competitiveness, and then potentially in a way could benefit Arrowhead as well.

John: The way you created both the licensing deal for the existing experimental drugs, but then also created a team to develop new drugs and innovate with that and to do some new things as well. Weiguo, HUTCHMED obviously is one of the best established Chinese players that's out there, and you've had a lot of opportunity to create and to build on the global relationships, I think, that Christian Hogg had created there early on and then building on that as well.

When you see some of these new kinds of companies being created and things like that, what's your own perspective as it relates to the US biotech executives who are getting more involved in China and the best ways of going about that because there have been a variety of different alliances and partnerships?

Weiguo Su: Yes. Thanks, John. Obviously, partnership is a priority for us. If you look back 20 years, we're just talking about this, the biotech industry or innovation in China has really evolved. When I joined HUTCHMED 18, 19 years ago, it was really not much of a drug discovery there, but slowly, we start to build a team. This is not just HUTCHMED, it's the same for all other companies in China.

Really, the drug discovery or development didn't start until maybe 10 years ago, 2012, 2013 when the China infrastructure start to mature to better support innovation. Our first IND, fruquintinib, which we actually collaborated with Kerry's team, Eli Lilly, the IND took about 14 months to clear from CDE.

Think about that, now it's like 60 days really, so the infrastructure is changing. The regulatory policies are changing towards better support for innovation. Now innovation, we just had a panel this morning forging collaborations or biotech partnership in China. Certainly, innovation has no boundaries, this innovation should serve ultimately global patients. What I think is important is that I think we all have a role to play.

I think China is very good at early discoveries. They may not be very good at the moment. Novo targeted discoveries, but they are very good at fine-tuning the molecules or proteins to ultimately translate into something more efficacious, better safety. You talk about J&J, so if you look at China biotech innovation, there's a lot happening at the moment.

There are a lot of actually repeated investment for some targets like PD-1, PD-L1s, or now ADCs, but you have to look deeper. You have to look at different programs where they have actually well-thought out strategies or differentiation strategies, and they will ultimately have a global potential.

You talk about partnerships, HUTCHMED has been collaborating with Eli Lilly, AstraZeneca, now Takeda on these project-based partnerships. They're all different, but all in all, I think they're all very good partners. We learn a lot from them, we work together. I think it's all about what we can bring to the table to help maximize the value of the projects and also hopefully maximize the clinical value for the patients.

Exactly, yes. I think this is going to continue. I think HUTCHMED will be working on these projects and bring these through clinical development and ultimately register in China, but also in parallel develop these projects outside China as well. Along the way, we'll be looking for partners, and it's all about how we can work together and bring these innovations to patients as soon as possible.

John: Right. Andy, from your perspective, obviously you deal with a lot of US companies that are hosting sponsoring studies in China as that's your role there, and you have to work a lot through the regulatory environment and things like that, presumably with a lot of executives who don't have a lot of experience in China.

Do you have any kind of recommended approach when somebody comes in terms of whether it should be done as a partnership or whether it should be done in some sort of a way in which they're working with a team of people that are already well based on the ground?

Andy Liu: Yes, definitely. I guess you're exactly right. As the CRO, we probably approach US team biotech from a different view. I guess like Weiguo, like Hongbo talked about, those partner they talk about, they probably don't have a lot of results. I'm not familiar with China, so they pick a partner. I guess also, as Hongbo mentioned, that's another perspective. They can work together for the new drug department.

The company approaching us more like they have done the level result. They just don't know much China, and they want to see if they can do this through our clinical development in China with their own, with their results. I guess definitely there are two values they recognize. One is the patient recruitment with the large population and the patient population, they can recruit at a lower cost.

Another potential, because when they have some Chinese patient data, they probably can't access the market and also potentially can also license out the product in future. However, I guess that the first question they asked us, what's the regulation environment? Someone probably had a bad experience 10 years ago. They still use that as a thing, "Oh, it's difficult."

I guess from our perspective, we're trying to offer our experience from regulatory perspective, things seen changing, evolving. I guess, this panel probably well known in past past 15 years, regulatory environment changed dramatically. 15 years ago, there's CT approval probably 18, 24 months, starting in 2015, changed a lot. Right now, the process to get MD application down to first patient in can get done in five, six months, so change a lot.

I guess they need to understand where, based on what situation, they can enter the market, but there's a lot of things happen like you don't need to set up manufacture in China. You can have a partner or CRO help you do the legal entity and be the representative. You can actually talk about, there are a lot of evolved that the partner expertise developing in China, either PI, Chinese biotech company institutions, so now you can choose like a partner. Either you build JV, license out, or you chose the CRO to work together. 

There are a lot of paths that you can speed up, accelerate. For example, you include China in the early phase, so you can have truly a global trial or even you have truly total oversee data. You can still file in China, and there is a fast-track channel for drug approval so they can take advantage. A lot of things they can do.

I guess, the situation changes while we improve the drug development infrastructure can help the quality improve a lot. I think the US biotech need to understand based on their situation, so they kind have a lot of choice.

John: Kerry, you're an old Eli Lilly hand, come China hand, and you've  been in China I think now for 14 years. You've obviously had a lot of opportunity to run through. One of the things that Andy's talking about is the regulatory environment is the fast-changing and Weiguo as well. The regulatory environment is a fast-changing scene in a lot of different respects.

You not only have to get to know China, you have to continue to know China. If you were to look at this from the perspective of somebody that was getting into it for the first time, what would you recommend? What would you suggest that they do?

Kerry Blanchard: Well, I think they need a partner, and I think the partner needs to be based in China. I think the global development plan is extremely important. I think the biggest places I've seen things falter is when two companies try to run two separate development plans in two separate geographies, and it's costly. You often generate data that you don't necessarily want to see and you have to deal with the regulatory agencies alone, and so I think that's really a poor idea.

When you can do a relationship where you run a global program and China can be involved, if that's possible, I think that's the best possible solution. The MNCs, we all figured this out in probably 15 years ago. We all looked at our portfolios from the US side and said, there's a 10, 12, 15-year innovation gap, and we want to fix that.

In the first few years, it was catching up through doing small trials, bridging trials, but very quickly MNCs realized that, if you could get people in China on the first registration trial, then you had the best chance of getting a simultaneous approval. Now, I think that's over because of the regulatory improvements and Mr. B should get lots of credit for this. He was the guy who drove most of this at NMPA with joining ICH helped a lot as well to have global standards.

Now, I think the innovation gap in China really doesn't exist anymore. Now, that creates an issue in partnership because the question now becomes, does China need global innovation? The answer is probably they don't, not so much. Then you have to ask the question, and I think Weiguo asked this question. He is very insightful to ask this question 15, 18 years ago was, China has believed, I think, from the beginning that the globe needs medicines discovered in China.

They've worked on very innovative things and brought them forward into the US market, but I think that is the dilemma that we're in. I don't see it so much as a regulatory dilemma, John. The regulatory system is quite predictable today in China. I find them to be very scientific and very approachable. They want to listen to reason and do listen to reason and have tried to follow ICH as closely as they can within the regulatory framework that exists.

I think the biggest thing that biotechs in particular need to think about in China is really a geopolitical thing, and that's that China is a communist country, and they drive drug prices down to quite a substantially lower level than the Western world. That creates an issue in companies that are focused entirely in China because then you're really-- if you have full development plans, your development OpEx is high.

If your cost of goods is high, you run into a corner with hard walls on all sides where your in-licensing costs are high. Your clinical development costs a lot. Your caps are high, and your ultimate commercial price is low. If your only geography is China, whether you're a biotech in China making drugs for China only, or whether you're a biotech in China in-licensing drugs from outside of China, you run into that problem. There are only special kinds of drugs that have real reasonable commercial opportunity because of the volume.

John: Min, I think that that would suggest that, for China-based companies, there's a real need for a global strategy as well, that you can't just be-- US company's not going to just see China as the only market that you're going go into. It would become one of the world. For a China-based biotech company, China can't be the only market because you've got to go outside. You've really got to create these relationships and do these sorts of things.

What's your own perspective on this as it relatesto where you're at in this whole the world and the best way of building bridges between a transpacific bridge between the US and China?

Min Li: Oh, John, thank you for the invitation. This is a fantastic topic and an important topic. Thank you for including me. Absolutely, if you think about the pure cost level, let's not worry about the capacity and the idea. Having innovation, you definitely benefit from the global reach because the ultimate market is all human being can benefit because physiology are very similar. 

Then you back out and say, well, look, what might be the innovation taking place and how you could build the framework by which you can benefit? I'm sure different company will do it differently. Certainly, if it is early discovery organization, there is a very special benefit to actually going after the most innovative targets where they can benefit as the discovery going through its own evolution and advances, but certainly there are other business models.

They're doing it somewhat differently, and I think we benefit learning China labs early business model where is that you're taking a rise primarily from outside, then you leverage in a geographic focus to, I guess, market then you can benefit. I think each biotech has its own emphasis in terms of where is the sweet spot.

I guess another way to look at it is the food chain. Where do you see the organization sit in the food chain? I think that also is a question for US biotech to think about when they reach out to China. If you see in a relatively late food chain, certainly the development environment in China, regulatory environment become very, very important.

If you are in an early space, perhaps there are other opportunities you can reach. I would say, like other panelists have mentioned, China in the last 15, 20 years has evolved from relatively spotty incremental capability, primarily in the manufacturer side, and CRO side become very matured ecosystem with a significant repertoire of innovation in different pockets.

You could argue certain areas, China has not gone very far, but there are definitely areas that are very, very advanced. You can go through a number of specific disease areas as well as some of the molecules.

In terms of companies, having the footprint in China, I think that's a good way to look at how they experience. I think Novo Nordisk which probably is one of the earliest that set up their research organization in China. Since their entry, now, if you look at the multinationals, they definitely have very different approaches over the last 10, 15 years as they evolve their footprint.

I think until now, Novo Nordisk remains very committed and benefit from their China R&D operation. Needless to say, Novo Nordisk, GSK, which I used to be, their presence in China also have trained a considerable-- a generation of life science executives, life science leadership, which I think is a special benefit of this global footprint and global strategy.

Of course, now we're talking about specific molecule, specific asset, that maybe is a different position of the food chain, then they need to have their own way of thinking.

John: Well, let me ask you something, Andy. I think that in terms of doing trials when the multinationals got involved in China, there was a good deal of discussion about a lower cost model for developing drugs. I don't know exactly how that played out, whether that was accurate or not. I think it may have created an impression at the time that it was less expensive.

As far as a biotech executive would be concerned, it would be like this is a very thorny kind of an issue. It's hard to figure out, it's expensive to fly to Shanghai. There are a lot of different reasons why it would not be considered less expensive. There are various features about doing clinical trial in China that do have some advantages.

John Connolly at the Parker Institute likes to talk about the one hospital approach towards getting an IND and getting approval for doing a trial, and that there's some very straightforward ways of mounting one. He suggested on a number of occasions that there are a lot of cancer drug development companies out there that would benefit from knowing a little bit more about that. In terms of the actual execution of a trial, tell us a little bit about that. What goes on there?

Andy: I guess there's definitely some challenge in running trial in China, especially like multinational company like US biotech experience. For example, I guess you need to have a partner as the partner is mentioned multiple times because you need to navigate the communication, documentation with authority. That needs to be in Chinese. Also especially for the truly innovative drugs, some testing involve biomarker, some testing, there's challenge also a patient sample . You need to figure out how to do that.

Are you able to find a good partner? They can help you to find a good local testing lab to make that  happen. Also, I guess we talked about early on, when we should consider China in the paradigm, I guess one thing we recommend is you think about what's the value you want to achieve from China patients.

Most of the time, we reckon from the start like Phase I B, because China also mentioned getting in early can give you the chance to negotiate a smaller sample size when you're going to the future pivotal trial. I think another is that you need to make sure the partner you have have both local expertise. That's  the relationship with the PI, with the regular agency, is very important.

Also, the partner needs to have the international mindset because that's the way how they go to work with you to understand. I guess another thing challenging is because of the past, I know is that the CRO happened dramatically and getting mature, but there're still-- based on the history, there are a lot of premature trials in the past, B trials. 

The difference of the CRO also in the industry have wide difference. For the biotech looking the partner, they also need to understand the data quality and the system for. Are they going to work out with them? I think those are key factors they need to handle and keep in mind when they consider running the trial in China by themselves or with through a partner.

John: Weiguo, from your own perspective, you've got a lot of experience in terms of global drug development as opposed to simply China drug development. What are the key aspects of mounting a trial in China do you think, as it relates to whether it's an oncology drug or a rare disease or something like that? Are there any particular advantages to doing something in China as part of a global strategy where you would go in and do part of the study or part of that global study in China? 

Weiguo: Yes, absolutely, John. Obviously, China is a big country, a large patient population. It definitely will have basically more patients available there. I think what's important though, when you talk about doing early development in China ultimately support global development, I think it's important to design your trials early on basically with a global strategy in mind.

Particularly, when you talk about targeted therapies for instance, then not only just clinical efficacy, but you have to pay attention to target engagement, target inhibition, duration of it. These are biomarker-driven studies, and oftentimes, small companies tend to pay less attention to. Instead, they're trying to push the drug to the next stage as fast as they can. However, these are really important information ultimately to support global development. 

The other thing is there's a trend now being pushed by USFDA as well as in China now as well starting to pay a lot attention to it, is called dose of optimization. Again, it's something that oftentimes companies pay less attention to because they try to move the programs towards registration or towards next stage as quickly as possible.

It can come back to bite you because dose optimization is becoming a very important part of submission actually. To justify the right dose to go into registration study is extremely important now. Again, in China, we are actually pushing our compounds into early clinical development. Again, I think the companies should have a global strategy in mind.

What you do, what you cannot skip you have to have these in your early development plans, so that when you finish your China trial, when you move into registration studies in China, you can do the same outside China.

Hongbo: May I chime in? You advised us to give practical advice to the audience.

John: that's right.

Hongbo: I'm going to be very practical. I think, when you think about China, running trial in China, you shouldn't focus on cost. I think the key word is de-risk. China can serve a very important de-risk venue for small or mid-sized US biotech companies. I have a personal example, which I don't want to name too much. Literally, in a company that we had a compound on the shelf that we don't know what to do. The Chinese company licensed it, we got some upfront payment, and then the data turns out to be fantastic.

Then literally, because of this China data, we still haven't done anything. In the US we're gearing up to do things, but literally, because of this China data, the market cap of my biotech company literally increased by close to 400 million because of this data out of China that they did three years ago. Don't think about China just about cost. It's about de-risk and about speed. Speed for translation. They can save you lots of time on the translational development.

John: Risk right now, I think is one of the biggest issues in US biotech because, in terms of having a drug that you could do a deal with on the big pharma side, what big pharma really wants is Phase II data. Where people see the real value in drugs right now, particularly with the market freeze and everything that's been going on over the last 18 months, is where you can point to solid human data of some kind.

Obviously, there's an issue with China-only data. It's an interesting-- Kerry's perspective on this is innovation being absolutely required to be a China biotech company, I think is a really interesting one. I think that the push towards globalization is more important than ever because everyone needs to have a global strategy.

If you could do something that would de-risk it for a larger purchaser perhaps, or somebody who would like to license the publication, that would seem to very interesting point. Kerry, what do you think about that as it relates to clinical trial costs versus de-risk?

Kerry: Well, I agree with Hongbo The cost is not the driver. The cost continues to rise. It will continue to rise and it will equalize. If you run a global trial with a global CRO, they don't charge you less for patients in China. They have a global cost, and then the Chinese biotech end up paying more than what they would pay if they ran it themselves usually. I think the cost is really not the deal.

The deal is speed, and sometimes you need patient populations. There still is a difference in the pharmacopeia between China and the US and Europe and even Japan. There are patient populations that exist in China that don't exist in the US. They could be drug-naïve. The US FDA does some funny things about that sometimes in the thought process.

You should treat patients with drugs that are going to make them better. If the drug has a chance to make them better, and they can't get the drug because it's not approved in their country, then you shouldn't hold that against them. You can sometimes attack a population or help a population that will open up as Hongbo said, a new indication for a drug or speed up development.

Now, the downside of this discussion, John, is that I've had this discussion with multiple biotechs. I've talked to, in the last 14 years, a couple 100 biotechs or more about China and how to do their projects in China. Everybody understands we could speed up their development, and everybody understands we could get them to Phase II so that they could sell their drug in the US to a multinational for a lot more money.

When you suggest, well, maybe if we speed up your development, we should get a piece of that global economics, even if they don't laugh at you, then they usually say, "Yes, we think you probably should." Then if you ask them to monetize it, it's barely worth doing work. I think this has been a problem. You can accelerate a program for someone else.

Now, I personally, having done early phase development at Lily, I was a strong proponent that you shouldn't do early-phase development in a lot of geographies. There's no regulatory requirement to do that. There's no reason why Chinese data can't support a Phase III trial or Australian data or wherever the data comes from. If you double and triple up on Phase I development, Phase II development is just more expensive. You don't get much more useful data, so unless you're doing a different patient population.

I think to go down Hongbo's direction and try and get something practical, if people look back over my deal history, I've done some interesting deals, but usually they're not one asset. The first in-event deal was six assets. It was spreading preclinical development across two continents. The inside deal with in-event was three assets. If I can, I try to do a portfolio of assets rather than a single asset.

John: … economic sense?

Kerry: Economic, and it makes more partnership sense. If you get in deeper with your partner, I think you have more of an opportunity to show what China can really do. If you only get the really hard project and it doesn't work, then it probably didn't work in the US either. They didn't learn anything about you as a partner. If you have an opportunity to do five or six projects, you get an opportunity to see things not only move quickly but see things at  work.

John: Min, do you think you should go big or go home? What's your own perspective on that?

Min: That's a really interesting comment that Kerry made. I think partnership need to be nurtured with substantive progress, you as a valuable partner. I think the luxury of doing multiple as a portfolio, that's nice. I think certainly the quality of the science is equal anywhere global you would go. That ultimately is your license as an organization. People will continue with your partnership.

I think also, in terms of the deal structures and others, I think certainly elements in China, as Kerry mentioned in the cost component, I just want to echo that component in terms of the speed is part of the cost. This become very evident during COVID, and some of us actually need to deal with non-human climate, that time is astronomical because of the speed and also the volume.

I think that also highlights that, biotech as an industry, you can actually leverage capacities in different geography with little or relatively low overheads. I think this is particularly fluent if you look at a certain capacity in China. I think the other aspect that is very evident also is the sophistication. Nowadays, there is multiple functionalities you could actually outsource in China where multinational does it, and certainly biotech can do it as well.

That type of structure, people like to say this id typical CRO, but I'm not entirely sure, is it just CRO itself? Because there are some budding biotechs in China that are very, very capable, and they are functioning with a special domain expertise. For example, in space, in others, they've been pretty I would say robust and also capable.

John: Weiguo, I think that the key thing that biotechs in the US look for from the FDA is clarity and understanding of what's likely to happen. They hate things to just change like overnight as they can happen. What they want is to understand what the FDA is doing and understand that it would continue to do that based on precedent. 

When it gets to getting into a different place like China, there would be a basic lack of understanding about how regulatory agencies work. Whenever there's uncertainty, that creates caution, and caution stops things from happening. I'm curious, do you feel like you have a clear understanding of the regulatory environment in China, and that someone could gain that understanding quickly?

Weiguo: No, I think at least our experience has been they are very professional. They are very much like USFDA, so we work with them a lot. I think what's important is to gain alignment with them particularly prior to initiation of any important trials, let's say registration study. I think prior in alignment is extremely important.

We always have a pre Phase III or pre any pivotal study discussion and alignment. It's done through very little details. I think they are very professional. They are very responsive. They're very clear on their position. You can have discussion with them. Sometime they can be receptive, but sometimes they're not.

Ultimately, I think what's important is to gain complete alignment before any registration studies. Midway through, if things change and we have to modify or we have to make any changes to the protocol, again communication with them is really, really critical and gain their alignment as well before you make any changes.

Basically, I think they are transparent. They are professional. They welcome discussions, and they provide their position. At least my experience has been quite good with them. It's not like they change midway through your study or something like that. No, that has never happened.

John: Great. Andy, what's your thoughts on that? Andy, what are your thoughts on that as it relates to regulatory clarity?

Andy: I think, as Weiguo mentioned, I think regulatory change is not just the-- is the but also I think they follow the rules. They have very open communications. Most of the clients come to China we work with, we help them to file the IND. I mean, our experience, if they have good files data, for example, IND approved in US, most of the time they probably don't even need pre-IND meeting. They can straight go to the IND process. 

NMPA is quite open. They have questions, they'll pop up, quite responds quickly. Our experience right now is the timeline definitely is consistent. Our experience, 2.5 months get approval. Also, there's other part of the things like HRC is also getting better situation. They can file parallel with the IND and with EC. 

The timeline, the communication is open. The timeline is more consistent, is predictable. I think all this back to the NMPA trying to adopt the global standards and also play that way, I think it's getting much, much better.

John: Kerry, you had an opportunity along with everyone else on the panel to kind of compare what's going on in China, come to the FDA and the EMA as well. How do you see the comparison?

Kerry: I personally believe that the NMPA is much more communicative and much more willing to engage in dialogue than FDA or EMA, certainly more than PMDA. Now, I haven't worked with FDA, EMA, or PMDA in much in the last 14 years because I've been here. I find China is very responsive as Andy said.

I think one of the things that surprises partners a lot when you haven't had experience in China is that, when you get a list of questions from CFDA, sometimes you've got 48 hours to answer them. Often, you need global support to help you answer them because they may be about CMC issues or your manufacturing issue where they may need some clinical data. 

Even some of the big partners I've worked with have gotten very gun-shy with this because they get a call from our regulatory people saying, we have 40 questions, and we need answers in the next 48 hours. Basically, if you don't answer the questions, it's just assumed you don't have answers.

That's sometimes a little hard because there's a little bit more flexibility perhaps on the FDA side or a little-- maybe they're a little bit slower, and so they don't expect answers quite so soon.

John: Well, particularly, when you've got to get the attorneys involved in answering and improving answers and all the rest as well, that always takes a lot of time. The larger the organization, the more likely the attorneys are going to want to weigh in, and they're going to want to take more time every time.

Kerry: This is a real family, John, in China. You mentioned relationship in our preamble quite a bit. China is not a transactional place. It can be, but it doesn't work very well when it's transactional. It's the end of the line. It's really relationships, and it's not just the regulatory agency. Andy mentioned this, Weiguo mentioned this.

We get very close to our investigators, and our investigators get very close to the regulatory agency. There's a shared risk acceptance and a shared learning that goes on that I see as much more prominent in China than I've ever seen with FDA, EMA, or PMDA. That's very, very important for people to assess the risk and understand the risk.

John: Okay. Hongbo, what are your thoughts about that?

Hongbo: I will have to skip the regulatory question. I'm learning so much from your panelists, so I think we're good here.

John: Okay, great. I've got a couple questions from the audience I'd like to get to, and it's not directed towards anybody, any individual, so the whole panel can take these on. First is, what is the outlook for rare disease drug development in China, given the inability to charge orphan drug prices? Are orphan drug prices higher in China than for non-orphan drugs? Anybody want to take that on? Min, perhaps?

Min: Yes, I can say a few words on this. First of all, I think this is a very loaded question. There are a number of domains, so let me maybe do a dissection. The first is a rare disease list. Rare disease in China, rare disease in US are not quite the same. Rare disease is defined by a China agent's administrative release list. Right now, the list is 120 something. There is also an updated list, so you need to be on that list to be a part of a real rare disease we define here in US, which is in thousands. 

That's a key question here, but the second component is regulatory path. Rare disease regulatory path in China is also expedited. There is a salary pass, not quite the same as in China. One really good news on this particular domain is that data generated in China actually is a very, very valuable-- can potentially be accepted. Even though it is not fully tested area, but I think that actually one can point some precedent on that subject.

John: Kerry, did you want--

Min: The third is about-- sorry. 

John: No, go ahead, sorry. Go ahead.

Min: The study is about the cost. I think the cost can be divided in number of components. In China, there is a general sort of national drug list, then there is a completely-- your self-paid list. They are definitely areas where, in the rare diseases, it's been covered by the government, and also there's a provincial, depending on the provinces, there is a subsidy of certain rare diseases.

One is, for example, Spinraza in China enjoy some sort of a paid environment difference depending on the province. Then come back to the component relates to the rare disease treatment is not quite the same. I think that is a subject need to be studied whether the acceptance in China is the same acceptance in the US. I will say maybe in gene therapy in others, it's more advanced, but in others, it depends on a specific disease.

John: Kerry, did you want to add to that?

Kerry: No, I think Min covered everything. He covered all. As he said, many provinces have catastrophic disease funds that they-- not necessarily for rare diseases, but for catastrophic diseases, and people have been able to get outside the NRDL listing prices for orphan diseases. True orphan disease in China.

John: Yes, great. Another question here. Let's start this one towards Weiguo, as it relates to EQRx, which was a company that initially had set out with a very provocative strategy of developing drugs, based on a China Development Strategy and then taking those with a less expensive product out onto the US market. Was EQRx naïve and not adequately considering political risks and its original strategy, for example, e.g. soured Sino-US relations? 

Weiguo: Well, I think John, that's obviously a very difficult question, but I think FDA makes decisions a lot based on signs. As you know, the surufatinib, our drug from neuroendocrine tumors, ultimately did turn us down, but it's mainly because of the representative patient population issue. The US FDA recommended that we run an MRCT to confirm the activity that we saw in Chinese patients won't be the same in the US or in a Western patient population. 

In terms of political influence, I think that's very difficult to assess, but I genuinely believe that there is a scientific rationale behind these, sometimes it's a patient population difference, sometimes it's a sample size difference. I really hope going forward, there could be more open dialogue with US FDA, and they could provide more guidance for companies to better plan for their registration. I think that would be really healthy.

Ultimately, it's for the patients. There's a tremendous disappoint from the patients and clinicians when surufatinib was rejected, but we're still working on it. We hope that, ultimately, we'll be able to make it available for patients in the US and Europe.

John: Hongbo?

Hongbo: John, I will help out here a little bit. From investor perspective, maybe I'm not up to speed, but in my view, EQRx is not about China versus US. I think EQRx was set up not only sourcing drugs from China. I think their mission, at time, I had lots of respect in their aspiration, is, in my view, to challenge the whole US healthcare system in the pricing.

Now, how they do it is sourcing some probably cheaper only drugs from China. That's a mean to help them to achieve that purpose. I don't think so far the difficulties in EQRx experience is entirely geopolitical. I don't believe that.

Kerry: I agree with that whole part, but I'd respectfully say that I've never seen a Phase II registration trial in the US that represented the US population. That's something that the FDA talks about all the time, it just does not occur. I agree with Weiguo, we need to base these things on science. I also would respectfully say, type 2 diabetes is type 2 diabetes, and it's the same in China as it is in the US and in Japan, and every place else.

There are diseases where ethnic, geographic, and racial characteristics make absolutely almost no difference in the disease population. They take as a position that you should represent the population. Fortunately, if China had taken that position, there'd be very few US drugs approved to China.

John: Well, that is our time for today. I'm going to finish up with the same note that I started on, which is that you ignore China at your own peril. I think that it's extremely important to pay attention to, not just the market, but the innovation and the science. Everything that's going on in China right now is going to have a global impact, and it's having a global impact, and it's very important to factor that into everybody's decision.

Understand that these are very difficult market conditions for a lot of biotech companies that are out there on NASDAQ, but at the same time, there are opportunities perhaps that should be considered in going ahead and creating strategies for your company. I personally expect that this is going to be a bigger and bigger and bigger issue over the rest of this decade and forward, one that's going to be very, very important to address.

With that, I'd like to thank all the members of the panel here for a very interesting discussion. I learned a lot as well about some different things that I hadn't been aware of before, and that's always a good sign. Of course, it's also a common sign, it happens all the time. I appreciate it very much. Appreciate you taking the time to be with us today. I appreciate the audience taking some time as well.

This wraps it for our Biotech Summit in Boston and the world, and we welcome you to come back to the next events that we have coming up on the fall.


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