STAT

It’s breathtaking’: A Chinese biotech CEO weighs in on policy changes remaking China’s FDA

https://www.statnews.com/2018/02/22/james-xue-biotech-ceo-china-fda/

February 22, 2018

With China’s biotech sector on the rise, changes are afoot at the agency tasked with regulating the country’s pipeline of new drugs.

In recent months, China’s version of the U.S. Food and Drug Administration, known as CFDA, has introduced a host of new regulations meant to make drug makers happy: Companies can now submit certain datafrom clinical trial sites outside of China. More Chinese hospitals can run trials. Manufacturing need no longer be done in-house. And drug makers weary of waiting for a green light to proceed with a safety study could soon be allowed to go ahead if they don’t hear back from the agency within 60 days.

James Xue, CEO of Beijing-based CANbridge Life Sciences, has had a front-row view of it all. He’s been interacting with CFDA officials on and off for the past 15 years, first in running Genzyme’s China operations and now in steering his own biotech company seeking approval for four oncology drugs. And Xue knows how drug approval works in the U.S., too: Born and raised in China, Xue did his graduate education and started his biopharma career in the U.S. before coming home as part of Thousand Talents, a Chinese government recruitment program that’s seen both successes and struggles.

So what does the raft of changes at the CFDA look like to such a tuned-in observer? We called up Xue to get his impressions.

What do you make of all these changes at the CFDA?

“In the last 12 months, I have experienced more reform and drastic change for better [than] over the 14 years before that combined,” Xue said. “It’s breathtaking, in a very good, very positive way.”

James Xue, CEO of CANbridge Life Sciences CANbridge Life Sciences

The palpable change, he says, extends to how quickly CFDA officials respond in correspondence about his company’s applications — a change he attributes to the agency’s moves to cut the backlog of applications for old generic products.

What’s the biggest difference between working with China’s FDA and the U.S. FDA?

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“The biggest difference prior to the reforms last year was the mentality,” Xue said. The CFDA was “not really risk taking at all.”

But the recent changes at the CFDA are making it not so different to work with drug regulators in China compared to those in the U.S., Xue said.

How have changes at the CFDA shaped your strategy at CANbridge?

Of the four drugs CANbridge is trying to get approved in China, two have already been approved in other countries. For the other two molecules, Xue is going to China for first-time approval.

Now that his team can submit data from clinical trial sites outside of China, Xue is taking a second look at the data from global clinical trials supporting several of the molecules his company has licensed to try to commericalize in China. “Before, we had to reproduce those data,” he said.

That same change has Xue thinking more about future hiring plans in North America. And another recent policy change allowed him to open a clinical trial site in Taiwan in pursuit of an approval in China.

Have any of the recent changes at the CFDA made it harder for you to do business or move your products along swiftly?

Xue pointed to a new CFDA policy that allows drug makers to contract out their manufacturing to a plant in China, instead of having to set up a plant in-house. That’s a “very positive” change, Xue said, but it doesn’t go far enough. He’d like to see it extend to manufacturing plants outside of China.

“I wish the CFDA would be more bold in allowing ex-China manufactured product to be entitled to the same benefits of the reform,” Xue said. That way, “we would not need to duplicate efforts by transporting a manufacturing process that is already very matured and established in the West for the sake of bypassing this laborious process.”

What challenges remain in working with the CFDA?

“I think the biggest pain point is still the truly innovative drug categories,” Xue said. When it comes to cutting-edge science, “the Chinese FDA is still not yet experienced enough to review the protocol or to give constructive input in making the protocol less risky” and more likely to get approved.

When you talk with U.S. biotech CEOs, how aware are they of all these changes at China’s FDA?

“I’m surprised, actually,” Xue said. “Their senior executives are very tuned in to the recent reforms in China. I have no doubt that they affect how they do their corporate strategy on a global basis. Nobody can afford to deprioritize China’s rise.”

Scrip Asks… What’s The Current Climate For Deal-Making? (Part 1)

16 Oct 2017

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Executive Summary

Following Gilead’s acquisition of Kite, buzz grew that the deal might catalyze a surge in deal-making. Scrip asked a broad cross-section of biopharma insiders and observers about the deal-making environment – first up are responses from small biotechs.

Gilead Sciences Inc.‘s recent buy-out of Kite Pharma Inc. for $11.9bn to super-charge its cancer pipeline ended a long period of speculation about what Gilead would do with its stockpile of cash – and set off a new round of speculation about the state of the deal-making environment across the biopharma industry.

What’s Gilead Getting From Kite For Nearly $12bn?

By Mandy Jackson 29 Aug 2017

The $180 per share that Gilead’s paying for CAR-T maker Kite was deemed too high by some and just right by others, but the big biotech expects a lot from its new cell therapy platform.

Read the full article here

Scrip asked a cross-section of people in the industry – from large and small companies, market analysts and other industry observers – what they make of the current climate for deal-making. Here, in their own words, are the responses from the biotech sector, defined here as smaller, clinical-stage firms. Part two will provide the responses from big pharma and other respondents.

Having Their Say:

Biotech: Epizyme Inc., Erytech Pharma SA, Kura Oncology Inc., Zavante Therapeutics Inc., CytomX Therapeutics Inc., Fortress Biotech Inc., CANbridge Life Sciences Ltd., Athersys Inc., Corbus Pharmaceuticals Holdings Inc.

Susan Graf, Chief Business Officer, Epizyme

Susan Graf

The current deal-making environment is a positive one-two punch for biopharma. First, today’s equity climate is fueling biopharma companies in their work to discover and develop innovative therapies. Second, big pharma companies continue to need promising new assets to fill their pipelines.

This exciting combination creates a variety of options for biopharma companies as they consider the best way to add more value to their companies, while continuing to do what they do best: innovating new medicines, particularly in areas of large unmet patient need.

Jean-Sebastien Cleiftie, Chief Business Officer, Erytech

Jean-Sebastien Cleiftie

Our perspective on the current climate: although not at the level of 2015, 2017 year-to-date biotech deal-making levels have been robust, especially when we look at licensing in oncology, immuno-oncology and immunology, which will continue to drive transaction activity.

Biotech M&A levels have been contained through the summer, although one transaction can have a dramatic effect on deal statistics, as shown by the recent acquisition of Kite Pharma by Gilead. Furthermore, Q4 is generally an active quarter for deal making, so all in all it is too early to predict what 2017 will look like on the M&A front.

Troy Wilson, CEO, Kura Oncology

Troy Wilson

Although uncertainty around tax reform and drug pricing remains, we continue to see a constructive deal-making environment for biopharma. Companies and investors continue to seek deal premiums, and buyers appear to be exercising discipline. Large pharma are willing to pay a premium when products have been significantly de-risked while smaller companies must compete aggressively as they look to challenge the incumbents.

As a result, we are seeing companies such as Incyte Corp., Tesaro Inc., Clovis Oncology Inc. and others begin to expand their scope and become strategic partners in their own right. In general, it makes for a pretty healthy biopharma ecosystem.

“This feels more like a slowdown as [big pharma] integrate their previous acquisitions and they assess what is going to happen with pricing and reimbursement.” – Zavante’s Schroeder

Ted Schroeder, President and CEO, Zavante Therapeutics

Ted Schroeder

I would characterize the current deal climate as active, but cautious. I find the current situation interesting for two reasons 1) Money is still relatively cheap and 2) Most companies remain under-valued. While I don’t have great insight into the minds of big pharma, this feels more like a slowdown as they integrate their previous acquisitions and they assess what is going to happen with pricing and reimbursement.

Allergan PLC’s shift to deals that are accretive in the short term (e.g. aesthetics) likely gives the rest of the players the sense that they don’t have to be quite so aggressive for therapeutic deals. (Also see “Allergan Adds Accretive Aesthetics Assets In $2.9bn LifeCell Acquisition” – Scrip, 21 Dec, 2016.) Novel oncology assets still seem to be in high demand. Big pharma and biotech still need to fill their pipelines so I expect a steady deal flow going forward, but perhaps not quite like 2016.

Debanjan Ray, CFO and Head of Corporate Development, CytomX

Debanjan Ray

We find the current biopharma deal-making environment to be strong. Our recent interactions with pharma suggest that these companies value innovation, and are willing to think creatively to access innovative programs and platforms that have the potential to make a difference for patients.

In the past 18 months, we’ve closed collaborations with AbbVie Inc., Bristol-Myers Squibb Co.and Amgen Inc. In these collaborations, our partners have been willing to structure deals that bring value to CytomX in the near term and the long term – for example, retention of certain development responsibilities and profit splits on certain products. This sort of creativity in deal structuring is highly valued by biotech companies such as CytomX, and tend to result in more productive collaboration discussions between biotech and pharma.

Lindsay Rosenwald, CEO, Fortress Biotech

Lindsay Rosenwald

I think the climate is as good as it’s ever been. There’s a great feel of demand for novel drug therapies in big pharma, big biotech, specialty pharma and even mid-sized and smaller companies so it all looks good right now. Which is always scary, right?

When I go to conferences, they’re very crowded with lots of inquiries, lots of interest and it’s like a bazaar, there’s so many people interested in so many different programs. If you look at the announcements of all the deals, it seems there’s a good volume of them.

From my perspective, because we’re involved in lots of different technologies, lots of different companies, there is certainly a lot of interest from all parts of the industry and it seems like the demand for novel agents addressing unmet medical needs – I’ve never seen the demand as great as it is right now.

“Capital market access for follow-on offerings has become somewhat more challenging since the peaking of sector performance in 2015. We believe this creates a very favorable environment for deal-making, as companies look to identify alternative funding sources.” – CANbridge’s Xue

James Xue, Founder, Chairman and CEO, CANbridge Life Sciences

James Xue

We are very optimistic about the current deal-making environment in the biopharma industry, which has seen historic inflows of capital over the last five years and a record number of IPOs. With that influx of capital, exciting new therapeutic candidates have received much needed initial funding to support their advancement. However, capital market access for follow-on offerings has become somewhat more challenging since the peaking of sector performance in 2015. We believe this creates a very favorable environment for deal-making, as companies look to identify alternative funding sources.

Our particular model is to identify validated Western drug candidates for development and commercialization in China and northern Asia. In this sector, we are observing a rise in cross-border transactions between Western and Chinese companies, such as the recently announced agreement between Celgene Corp. and BeiGene (Beijing) Co. Ltd. (Also see “Celgene Eyes IO Growth With BeiGene China Pact” – Scrip, 6 Jul, 2017.) These types of deals can allow companies access to markets not otherwise easily accessed, as well as additional non-dilutive capital, which we believe will continue to make them attractive and a growing component of the environment.

Gil Van Bokkelen, CEO, Athersys

Gil Van Bokkelen

There is substantial interest in technologies that have the potential to address areas of significant unmet medical need, and we believe that will continue to be the case. This is especially true for innovative technologies targeted at indications that are related to the unprecedented demographic transition now occurring, with the large increase in the number of people age 65 and older as the baby boom generation gets older. This will have a massive global impact on health care, since there are quite a few diseases and conditions that will become more prevalent as the global population ages.

Unfortunately, many of these conditions currently lack effective treatment solutions, and for the patients that may mean institutional care, family care or professional home health care, and most families and societies around the world are simply unprepared for that. That need creates opportunities for innovative companies developing safer and more effective treatment solutions that can help improve quality of life for patients.

“We’ve been hearing from big pharma … that there is real concern over high valuations of late-stage public companies that could be targets.” – Corbus’ Cohen

Yuval Cohen, CEO, Corbus

Yuval Cohen

There has been a real drought in deals this year and so the recent Gilead/Kite deal was a very welcome change in that. It is probably too soon to see whether that was the start of a change or a one-off. What we’ve been hearing from big pharma is that there is real concern over high valuations of late-stage public companies that could be targets, but that is always counteracted by the ever-present need of big pharma for novel promising drugs in their pipelines. My feeling is that we will see a return to robust M&A activity shortly but perhaps more on the earlier (hence less expensive) side.