Betta Pins Hopes On New Overseas JV Amid Challenges
Executive Summary
Betta Pharmaceuticals hopes strategic initiatives overseas will facilitate its diversification away from a single dominant oncology product. The Chinese firm is facing increasing competition from domestic generics, with revenues and profits under pressure.
Betta Pharmaceuticals Co. Ltd., a China-listed oncology-focused company, is set to tap its US partner Tyrogenex Inc., to develop new cancer drugs outside China, as part of efforts to create new growth avenues and globalize. A joint venture, Equinox Sciences, was officially established in Washington on Aug. 26.
Betta and Tyrogenex have split equity equally in Equinox, and will focus on developing oncology indications of vorolanib with global rights excluding Greater China. Vorolanib, also known as CM082 in China and X-82 in the US, is a small molecule dual inhibitor targeting human vascular endothelial growth factor receptors (VEGFRs) and platelet-derived growth factor receptors (PDGFRs) with antiangiogenic and antineoplastic activities.
The drug candidate was in-licensed by AnewPharma from Tyrogenex’s parent company Xcovery LLC. AnewPharma had China rights for patents, development, production and commercialization. Earlier this year, Betta acquired 100% of AnewPharma for CNY480m, including all China rights to CM082.
Back in May, Betta made an investment of $10m in Tyrogenex for a 7% equity stake, and worked together for ophthalmic indications of vorolanib outside China with global rights.
Clinical Development Of Vorolanib
The newly established Equinox and the buyout of AnewPharma have given Betta full rights to vorolanib in all territories. Betta’s chairman Lieming Ding expressed the company’s hope to become a China-based multinational pharma through the strategic acquisition of vorolanib.
For vorolanib's cancer indications, AnewPharma filed IND applications with the China FDA for capsule and tablet formulations in April 2012 and March 2013, and for the wet age-related macular degeneration (AMD) indication, the company filed an IND with the China FDA in January 2013.
Currently, the candidate is in Phase III study to treat advanced renal cell carcinoma in China in 30 clinical centers, and in Phase II testing to evaluate AMD treatment.
Following the positive study outcomes from the Phase I trial in AMD, AnewPharma also submitted INDs to China FDA for additional indications, including diabetic macular edema (DME), retinal vein occlusion secondary to macular edema (RVO-ME), pathological myopia (PM) complicated with fundus lesions.
Betta’s senior vice president and chief medical officer Fenlai Tan said that the reason behind Betta’s continuous investment in pursuing vorolanib is its multiple targets against VEGFR, PDGFR, c-Kit, Flt-3 and CSF1R. “And the drug is in oral tablet with good safety profile and better patient compliance, and it is more convenient than other target drugs that must be used through injection,” he said.
Challenges At Betta
Betta generated 99% of its total revenue from a single product Conmana (icotinib) for small-cell lung cancer in 2016, according to its annual report. Due to a 54% price cut initiated by the government for large-selling product, icotinib has seen a slowdown in recent months. Betta reported that in the first six months of 2017, its net profit was CNY137m, a 35% decline over the same period last year.
The main competition to icotinib is gefitinib and erlotinib that have seen patent expiration already in China. Based on China FDA public information, as of August 31, 2016, 25 domestic pharmas have filed generic gefitinib applications, while 28 companies have submitted applications for generic erlotinib. Qilu Pharmaceutical Co. Ltd. has already launched the first generic of gefitinib YiRuiKe in February 2017, which also put pressure on Betta’s Conmana.
Another challenge Betta faced is one of its three co-founders, CEO Yinxiang Wang, departed from the company – he directly contributed to developing Conmana, and led the company’s initial public offering (IPO) last year. (Also see "Betta IPO: New Hope For Made In China Innovation?" - Scrip, 11 Nov, 2016.)In fact, earlier in February this year, Betta’s announcement on the resignation of two executives - vice president Haijiao Shen and chief chemist Shaojing Hu- saw its stock price decline. (Also see "Asia Executives To Watch: Betta CEO Quits To Nurture Drug Startups" - Scrip, 29 Aug, 2017.)
Tapping New Avenues
Betta said it has more than 20 ongoing new drug projects, seven of which are under clinical development, with three entering the Phase III stage. But it seems that Betta may have to wait for years to launch its next novel product after Conmana.
The company, instead, is tapping new drugs to enrich its product portfolio. In 2013, Betta set up a Chinese JV with Amgen Inc. to develop the oncology drug Vectibix (panitumumab) in China. The drug is already in late-stage clinical development.
Betta invested in Xcovery in 2014, in exchange of Chinese rights to X-396, a potent small molecule anaplastic lymphoma kinase (ALK) inhibitor. X-396 has entered global multi-center trials this year, and is expected to be launched simultaneously in both the global and Chinese market.
In May, Betta participated in a new CNY100m round of fundraising for Beijing Biostar Technologies. Biostar is developing a Phase III stage candidate UTD1, an epothilones-based new drug to treat advanced metastatic breast cancer similar to Bristol-Myers Squibb Co.’s Ixempra (ixabepilone), Novartis AG’s EPO906 (patupilone) and Bayer AG’s ZK-EPO (sagopilone). (Also see "China Investment Roundup: Strategic Overseas Moves Target Product Acquisitions" - Scrip, 14 Jun, 2017.)
From the editors of PharmAsia News