China revolutionized the AI sector with DeepSeek. Now, it's causing ripples in the medical field.
In September, Akeso, a lesser-known Chinese biotech company, made waves in the industry by producing a potentially groundbreaking lung cancer drug. The new drug, Ivonescimab, scored big in trials conducted in China, outperforming Merck's Keytruda, a blockbuster medication that's raked in over $130 billion in sales for the pharmaceutical giant.
Patients treated with Akeso's Ivonescimab went 11.1 months before their tumors began to grow again, contrasting with the 5.8-month period for Keytruda, according to data shared at the World Conference on Lung Cancer. This breakthrough sent shares of Akeso's US partner, Summit Therapeutics, soaring, with their value nearly doubling.
Though this was a significant achievement within the industry, it garnered little attention outside of it. However, that changed following DeepSeek's notoriety this year, which shed light on pockets of innovation in China and its growing global implications.
Akeso's CEO, Michelle Xia, spoke candidly about the company's ambitions during an interview with BiotechTV, saying, "I do believe the Chinese biotech industry will play an important role globally. And we [will] participate more and more."
Akeso commended their achievement in a statement to CNN, stating, "Akeso’s innovation [is] driven by a deep understanding of disease biology and protein engineering, while benefitting from the fast development time and the abundance of top-tier talent in China."
The Rise of Chinese Biotech
Prior to the 1980s, China's pharmaceutical sector was primarily state-owned. For the past four decades, Chinese biotech companies mostly focused on replicating existing medications. However, the last decade has seen a shift towards innovation, as these companies have developed advanced drugs that can compete with Western offerings. They've also signed significant licensing deals with Western partners to distribute their products worldwide.
The achievements of Chinese biotech companies, like Akeso, have put the global pharma landscape on notice. Rebecca Liang, a pharmaceuticals analyst at AB Bernstein, highlighted this transformation, stating, "Now the threat is getting real. You do start to see these next-generation drugs that are sort of a leapfrog."
HSBC Qianhai Securities confirms this trend in a research note, revealing that the number of licensing deals in China has surged from just 46 in 2017 to over 200 last year. The total deal amount may have started with $4 billion in 2017 but rose to $57 billion last year, according to their data.
Larger pharmaceutical transactions involving Chinese firms have grown by nearly 30%, as per market intelligence firm Mergermarket, indicating a promising future for these biotech companies.
Cui Cui, managing director of healthcare research for Jefferies, attributed this progress to factors such as strong government support, foreign investment, and a wealth of domestic talent. She hypothesized that in the future, Chinese biotech companies will be able to compete with leading global pharmaceutical companies.
Challenges at Home
However, while Ivonescimab has generated excitement overseas, the quality of domestically produced generic drugs has become a matter of debate in China. Distrust in locally produced medicine remains deep-rooted, leading to a public uproar over allegedly shoddy Chinese generic drugs.
Recent concerns led to an official investigation into the issue, which ultimately cleared the domestic drugs of any safety concerns. Despite this, many Beijing residents still prefer imported drugs, citing the old adage, "you get what you pay for."
US regulators and investors have raised questions about the quality of clinical trial data generated in China, which has previously led to drug rejections by the FDA due to insufficient trial rigor. Akeso's new drug, while not a generic, has been approved by China's pharmaceutical regulator for certain lung cancer patients, but it is years away from US approval.
A global trial is currently underway for later this year, which could further prove Ivonescimab's effectiveness. If the results are positive, it would provide further evidence of the strides China has made in drug development.
The potential success of Akeso's Ivonescimab, outperforming Keytruda in trials, has sparked discussions about unsubstantiated concerns surrounding Chinese pharmaceuticals in the past. Earlier criticisms about the quality of Chinese generic drugs and concerns over clinical trial data rigor are being challenged by the advancements in Chinese biotech, such as Akeso's innovations in protein engineering.
Akeso's achievement with Ivonescimab, though a significant step in the Chinese biotech industry, highlights the need to address unsubstantiated accusations about the quality and rigor of pharmaceuticals produced in China. This underscores the importance of addressing these challenges to gain broader recognition and approval in global markets, like the United States.
The pharmaceutical giant Merck, with its blockbuster medication Keytruda, has experienced rivalry from lesser-known Chinese biotech companies like Akeso, demonstrating that Chinese pharmaceuticals are challenging the status quo in the pharmaceuticals sector, including in the competitive landscape of pharmaceuticals such as pharmaceuticals for lung cancer.
