Regardless of the "winter of capital" or the industry stage adjustment, emerging technologies with potential are still favored by the capital market. Whether it is target piling or "in-volume", innovation is the core driver for the development of the pharmaceutical field. Last night, in the live broadcast room of Pharma Magic, Dr. Qiang Yu, CEO of CGeneTech, together with Dr. Xie Yuli, CEO of Microland Biologics, and Dr. Eddie Yang, Co-founder and CTO of Huan Code Biologics, discussed what inspirations and thoughts the cutting-edge technologies in the biopharmaceutical industry can bring to the domestic R&D and investment fields. Let's follow the video and text below to understand their innovative thinking.

　　The following is an excerpt from the live broadcast of some of the experts' views to share with you.

　　In the context of accelerating aging worldwide, including China, what breakthroughs can be expected in the future drug development from the unmet clinical needs of chronic disease management?

　　Qiang Yu: There are nearly 500 million patients with diabetes worldwide, 120 million people are diabetic in China, and nearly 36% of adults are prospective patients. From the discovery and application of insulin a hundred years ago to the three mainstream products of diabetes drugs today besides metformin and insulin, DPP-4, SGLT-2 inhibitors and GLP-1 agonists, this itself is a process of updating and iterating the management of chronic diseases. When we discuss the future of drug development, we first need to have a deeper understanding of the disease itself to know where the unmet clinical needs are. At the same time, as human society advances and living standards improve, the treatments for diabetic patients may now have to keep pace with the times, and this is the driving force and responsibility of our innovative drug development. As a field with a century of effective treatments, many drugs have been accumulated, making patients dazzled and making some people think that diabetes drug R&D is a red sea. In response to this view, I think the ancients had a saying: "Gou Rixin, Rixin, and Rixin. " (The Book of Rites - University)

　　We have heard of the three highs of chronic diseases, but diabetes in China also has three lows, which are the bottom of the awareness rate, the low consultation rate and the low blood sugar control rate. With these three combined, no more than 5% of diabetics in China are actually able to control their blood sugar well. It is also very unfortunate to tell you that recent studies have shown that Chinese people are part of a genetically susceptible population to diabetes, and that we Asians have a 60% increased risk of diabetes compared to Caucasians (white Europeans and Americans). The high number of patients with diabetes and the high number of patients with diabetic complications make it imperative that those doing drug development not limit themselves to lowering sugar as the only goal of the new generation of diabetes treatment, but we must consider derivative diseases and complications.

　　Obesity, diabetic nephropathy, non-alcoholic fatty liver disease. The correlation between NAFLD and diabetes is very high, with 65-70% of diabetics suffering from NAFLD, and further development of NAFLD will become non-alcoholic steatohepatitis (NASH), which is a $45 billion market, and there is no effective treatment yet. From the perspective of glucose metabolism, nonalcoholic steatohepatitis occurs as a result of trace cellular dysfunction caused by hyperglycemia. We know that during glycolysis, glucose is converted to pyruvate through aerobic cellular respiration, and pyruvate can be synthesized into fatty acids through acetyl coenzyme a, which accumulates in the liver and increases body fat, so this is a mechanism that causes nonalcoholic steatohepatitis from the perspective of hyperglycemia. Then studies now show that glucose metabolism modulation is an important way to treat nonalcoholic fatty liver disease. In addition to glucose metabolism, we can see that lipid metabolism, bile acid, and cholesterol metabolism are some of the pathways for the treatment of NAFLD and hepatitis.

　　To sum up, as an innovative drug developer, the patient market has a need for this, and this happens to be what we are capable of doing, and we want to solve these problems.

　　Q: Which of the world's most groundbreaking frontier technologies can be produced and applied in China in the near future?

　　Xie Yuli: The development of new technologies in the field of biopharmaceuticals is changing rapidly, from small molecules, large molecules, to the current array of gene and cell therapies, nucleic acid drugs, etc., which are also driving the pharmaceutical industry forward. However, the most difficult part of the research on new technologies is not the directional issue, but the timing of the specific entrepreneurial projects. For example, in the field of nucleic acid drugs, if in 2013 to start a business or investment may lose money, but now to do it will be a waterfall.
 

　　The new technologies in the field of small molecule drugs are the deep development of traditional technologies, and there will certainly be new products that can be landed quickly, such as the molecular gel technology that has been clinically applied, and the PROTAC technology extended from it will certainly have the hope of realizing product output in the short term. In the field of large molecule drugs, from the development of mono- and dual-antibody technologies to the most popular ADC technology, it is also a nail in the coffin for these relatively mature technologies to achieve product landing in the short term. But more cutting-edge technologies such as mRNA, gene editing, etc., although very promising, but more to consider the issue of time nodes, so the key point is not whether it can be product landing in the short term, but to focus on building his platform function, through five to ten years of continuous accumulation to form a strong "moat" with independent intellectual property rights. Then once the opportunity is met, it will achieve a miraculous explosion.

　　Many of the cutting-edge technologies overseas are based on research in universities and are the result of close integration between industry, academia and research, what inspiration do overseas experiences have for domestic cooperation between industry, academia and research?

　　Yu Qiang: This question immediately brings me back to the time when I was "young and thin in spring, riding a horse on a sloping bridge". Let me first tell you what I saw in the United States.

　　(1) American doctoral students can use the word "love" to describe their major. They could have entered such decent and well-paid fields as finance and law, but if they chose chemistry, which we describe as bitter, dirty, tired and dangerous, how can they persist without love, and even if they persist, how can they be wonderful?

　　(2) The elite who love research and can survive the professor selection system have become the mainstream of research in American universities. Then the talent is there, and there are funds associated with this, such as NSF National Science Foundation, NIH National Health Foundation, and family and disease patient associations/foundations that apply for funding, etc. This also directs the direction of research. For the sake of academic pursuit, peer review, most of their research results are top-notch, and the technologies that can be translated therein are cutting edge.

　　(3) Then, the United States is a country with advanced commercialization, and American universities also encourage professors to transform their research results. There are two main forms of such research transformation, one is to directly license patents to enterprises; the other is to create technology companies with cutting-edge technologies as a platform. But what impresses me most is that in foreign countries, no matter which form is used, everyone has his or her own duties, and professors are only responsible for the research results, not too involved in the operational decisions of the company, and the operational work is handled by professional managers. Professors still focus mainly on research, which creates a virtuous circle and ensures that the technology is updated and iterated. It is a win-win situation for both the depth of academic development and the life cycle and value of the company.

　　(4) In fact, having said so much, I have answered the inspiration of overseas experience on domestic industry-academia-research cooperation, I use four letters to summarize first: DDDD. nothing more than each in their own way, win-win cooperation.

　　Eddie Yang: After 2018, the transformation of domestic industry-university-research has changed a lot: firstly, a large number of researchers returning from overseas pay more attention to protecting their intellectual property rights and want to push their research to the market; secondly, the national level started to organize training for these researchers so that they can better understand what kind of technology the market needs; finally, the capital market has also become more and more optimistic about the development of cutting-edge technologies in these two years. The combination of these three has brought China's biopharmaceutical industry closer to the international level in terms of cutting-edge technologies.

　　Xie Yuli: At present, the government, enterprises and capital all realize that the biopharmaceutical industry needs to do differentiated innovation, but the key question is how to do it? I would like to raise two points for consideration here.

　　(1) The foreign biopharmaceutical industry has experienced decades of accumulation, in which there are rules to follow, both basic research breakthroughs generally come from research institutes and universities, and then transformed through innovative biotechnology companies, and finally taken over by large pharmaceutical companies, forming an effective relay. In the past two years, China has started to imitate this model, but it is not similar in form but not in spirit. As Mr. Yu Qiang mentioned earlier, professors abroad are very focused on their own research fields and rarely participate in the specific operation of the company, but in China, professors are basically personally involved in the field. It is worthwhile to think and summarize how to understand the inner law when learning from foreign experience.

　　(2) We also need to think about what is the relationship between basic research and originality? Is the lack of originality in the domestic biopharmaceutical industry just because basic research is not working? I do not agree. Because the industry does need basic research for originality, but for specific companies is not a necessary condition. For example, Amgen was approved last year as the world's first oncology drug targeting KRAS mutations, but basic research in this field was published decades ago and can be translated by everyone. In addition, besides basic research, the investment environment of the industry and whether the innovation ecology matches are worthy of our consideration.
　　
　　At present, domestic targets are piled up and "in-volume" is serious, and new drug R&D is shifting from "fast-follow" and "me-too" to quality and differentiation oriented by clinical needs. In the process of transformation, how else can innovative drug companies break the game?

　　Yu Qiang: Seeking stability is homogeneous, and seeking new is risky. This is a property of capital, and innovative drug companies cannot be driven by capital. How to balance stability and innovation in the company's internal projects, and how to seek a balance of risk and return with capital, in fact, your question is part of the answer: quality and differentiation, plus an innovation, from the company's internal pursuit of new technologies, and the cooperation between industry, academia and research mentioned earlier. But I personally do not recommend a new drug development company to be completely innovative, because the risk is too great, in case the project does not go well, sorry for the investors and employees, this is the balance.

　　Then the part of seeking stability is the quality and differentiation mentioned by the moderator, which can be achieved by using technology platform, provided that we quietly put our mind on the in-depth research. In the case of small molecule targeted drugs, many companies are doing the same target, and foreign countries may already have listed products, so are we able to improve the selectivity or develop other indications through the research of the target with the progress of relevant academic research, the progress of scientific and technological means, and the listed products in clinical applications, which is differentiation.

　　Eddie Yang: Doing innovative drugs definitely faces a lot of risks, especially for startups who first want to keep themselves alive first, so we have to think about how to minimize the risks? First of all, as a biotech company, it is still good at technology, relying on its own technology platform to collaborate with other pharmaceutical companies to solve the actual problems they face in the clinic, so as to develop more promising lead molecules and make their products more valuable in the market; secondly, at the same time, the layout of frontier targets with global innovation, to reflect their own innovative capabilities. Therefore, it is important for startups to learn to "walk on two legs".

　　Xie Yuli: Our understanding of life sciences is only the tip of the iceberg, so the probability of success in making original new drugs is inevitably very small, we need to learn from the European and American experience to gradually establish a perfect ecological environment to support. Therefore, it is not that companies to do "fast-follow" is not good, the pursuit of original and "first in class" is not only a risk, and even a kind of "harm" to clinical patients. harm" to clinical patients.

　　In the face of upstream cost and downstream pressure of health insurance policy, what other new measures should domestic innovative drug companies take to respond?

　　Yu Qiang: This is a question of benevolence, and my opinion is why should domestic innovative drug companies expand their living space for upstream and downstream? The promised to overcome the difficulties together?

　　End of trolling, say some key points. Our innovative drug companies are a kind of active and passive innovation. Patient-centered, patient-need-driven development of therapies. This includes new treatments, and improvements to previous treatments, in terms of bringing better patient compliance, for example. Innovative drugs going to sea may be what many people think of, but the prerequisite for going to sea is innovation. If there is real innovation, you can get independent pricing rights in China as well, and if it really brings solutions to unmet clinical needs, it can certainly bring considerable profits.

　　Xie Yuli: The payment side is a key part of the commercial closed loop, through the medical insurance price control to let the people with cheap innovative drugs is of course the most willing to see the drug companies, but low to the objective law, in the long run will certainly hurt the ability of drug companies to continue to innovate, that ultimately damaged or the industry and patients.

　　The upstream cost increase belongs to the market law, because there is market competition between drug companies, plus the increase in homogeneity of the company will certainly cause more resource tension, the market will have self-regulation process. But the pharmaceutical industry has its own special characteristics, so it is recommended that policy makers need to be more cautious, the "invisible hand" in the market to a more long-term perspective to regulate, to promote the healthy and stable development of the industry.

　　What are your views and judgments on the overall development trend of China's innovative drug industry in the next few years in view of the capital winter in 2021?

　　Yu Qiang: First of all, is it clear whether the capital is for investment or speculation? I think the crazy short-term speculation is now returning to long-term value investment. There is a spring, summer, autumn and winter in a year, and I am still very optimistic about the overall development trend of innovative drugs in China. Think about it, from the beginning of the 21st century when China started to have the real sense of innovative drug research and development, it is only 20 years today, the development speed is already very fast. At the same time, we should see that the country is definitely determined to support independent innovation in biopharmaceuticals, from the 11th Five-Year Plan to the latest 14th Five-Year Plan has been clearly proposed in the major new drug creation special projects. Therefore, I firmly believe that the recent so-called capital winter is an adjustment to the development of the industry, under the good environment of national encouragement of innovation, with the policy of medical insurance to vacate the cage for birds and the pursuit of long-term value investment capital support, there will be more new technology achievements will be widely used, and the future of our industry is promising.

　　Eddie Yang: In the past two years, all industries are experiencing the cold winter of capital, only the biopharmaceutical industry is more volatile than before. Personally, I think the next 2-3 years companies should be prepared for the winter, especially the talent reserve. There is still a shortage of local talents in the field of domestic new drug development, but more and more talents are willing to join the industry under the epidemic, thus forming a certain talent pool. Therefore, in the next 5-10 years, biopharmaceutical is still a sunny track, and entrepreneurs and capitalists will continue to join it and make a career.

　　Xie Yuli: First of all, the development prospect of biopharmaceutical industry is still the most certain industry with a scale of 10 years, especially when it comes to major public health and safety events, it will promote the development of this industry even more. Secondly, the capital market in these two years has given a great objective impetus to the industry, for example, the domestic PD-1 monoclonal antibody field has been explosively improved in terms of R&D and production level; at the same time, it also gives everyone more opportunities to participate in the industry's innovation and entrepreneurship, and jointly promote the progress of the industry. Finally, from the technical point of view, enterprises should seize this opportunity to achieve technological breakthroughs and truly solve clinical pain points, which can benefit patients and bring returns to capital, and better reflect the value of enterprises, thus forming a closed loop of commercial science. So I think in the next 5-10 years, heavyweight products with international influence will definitely emerge in China, which will further catalyze the industry's take-off.

　　Mint Angel Fund focuses on global early-stage innovation project investment, as a venture partner of Angel Fund, can Mr. Yu Qiang share his thoughts on investment in 2021 and what specific tracks or representative companies he has invested in the past 1-2 years?

　　Qiang Yu: No matter how the external environment changes, Mint has always adhered to the concept of innovation from the source. The projects and founders of the fund are all from top research institutions in China, such as Peking University, Tsinghua University, Beihang Institute, Jiaotong University, West Lake University, etc. What these portfolio companies have in common is that the founders of the companies are academic leaders in the industry, and the companies have original technology platforms covering areas from small molecule targeted drugs to antibodies, from cell and gene therapy to artificial intelligence, from drug delivery to cryo-electron microscopy and so on. The technology platform is like a sword, and the leader is like a sword-bearer, as long as the two are combined into one, it is a mint ideal quality project.

　　About CGeneTech

　　Founded in 2010 in Suzhou Industrial Park, CGeneTech (Suzhou, China) Co., Ltd. has a core team with decades of international experience in the full life cycle of pharmaceuticals, and is dedicated to the development and industrialization of small molecule innovative drugs for breakthrough therapeutics. With its integrated drug discovery technology platform and diversified business vision, the company has built a rich pipeline of Class 1 innovative drugs covering various disease areas such as hypoglycemia and anticancer. Among them, Cetagliptin phosphate is expected to fill the gap of original DPP-4 inhibitors in China, while the first generic drug for the treatment of rare disease multiple sclerosis, Teriflunomide tablets, has also been approved for marketing. In the future, the company will focus on the unmet clinical needs in China and around the world to develop innovative drugs with high patient accessibility and better efficacy to benefit patients worldwide.