Loss of 700 million a year! It only took 5 years from the establishment to the IPO. Why is Heyu Biotech?
June 19, 2021
The latest news on June 17th, Shanghai Heyu Biomedical Technology Co., Ltd. submitted a prospectus to the Hong Kong Stock Exchange on the evening of June 16th, intending to list on the main board, with Morgan Stanley and JP Morgan Chase acting as joint sponsors.
According to the prospectus, the net proceeds from the IPO will be mainly used for ongoing and future research and development; for other clinical stage products and pipeline candidates; for pre-clinical research; for the construction of manufacturing facilities and lease New research and development facilities; and for working capital and general corporate purposes.
Focus on small molecule precision tumor therapy and immuno-oncology therapy
Layout of 14 innovative product pipelines, 4 of which have entered the clinical stage
Heyu Biology is a R&D-driven, clinical-stage biomedical company, focusing on the two core areas of today's cancer treatment-small molecule tumor targeting and tumor immune drug research and development. It was co-founded by Dr. Xu Yaochang, Dr. Yu Hongping and Dr. Chen Zhui in 2016. According to Frost & Sullivan analysis, the global oncology drug market has an annual growth rate of 10.5%. It is estimated that the scale will increase from 150.3 billion yuan in 2020 to 670.4 billion yuan in 2035; China’s oncology drug market is expected to grow from 28.6 billion yuan in 2020 The U.S. dollar will grow to 145.5 billion U.S. dollars in 2035, with a compound annual growth rate of 11.5%. Among them, small molecule therapy occupies most of the market share. The prospectus shows that, as of now, Harmonicare has established 14 research and development pipelines focusing on the comprehensive composition of precision oncology and tumor immunotherapy, including 9 small-molecule tumor precision treatments, including FGFR, EGFR, and FGFR with new and differentiated potential. KRAS inhibitors, etc., 5 comprehensive small molecule immuno-oncology treatments; and 7 IND approvals have been obtained in three countries and regions around the world. In addition, 10 of them are in pre-clinical research, and 4 of them have entered the clinical research stage. They are CXCR4 antagonists, FGFR1/2/3 inhibitors, FGFR4 inhibitors, and CSF-1R inhibitors.
List of Heyu Biological R&D pipelines
Abbreviations: HCC = hepatocellular carcinoma; RMS = rhabdomyosarcoma; FGFRalt = FGFR mutation; UC = urothelial carcinoma; GC = gastric cancer; NSCLC = non-small cell lung cancer; TGCT = tendon sheath giant cell tumor; cGvHD = chronic graft versus host Disease; ALS = amyotrophic lateral sclerosis; TNBC = triple negative breast cancer; WHIM = warts, hypogammaglobulinemia, infection and bone marrow agranulocytosis.(Note: i. refers to phase Ib/phase II clinical trials; ii. combined with Roche's anti-PD-L1 antibody atezolizumab; iii. combined with Junshi's anti-PD-1 antibody, teriprizumab)
Image source: Heyu Biological Prospectus
It is worth mentioning that ABSK021 is an innovative CSF-1R small molecule inhibitor independently developed by Heyu Biotech and has global intellectual property rights; ABSK081 is the only oral bioavailable CXCR4 antagonist in global clinical development; ABSK-011 It is the first product that Heyu Biotech has obtained clinical approval in mainland China, and it is also a product independently developed by Yiyu Biotech. The project has been clinically approved in Taiwan, China in December last year, and corresponding clinical research is currently being carried out locally. In addition, Heyu Biology plans to submit IND applications for new drugs focusing on new targets or methods of action that were in preclinical research ten projects in the next 12 to 24 months, which has the potential to become a new type of solution to major unmet medical needs.
Annual loss of 700 million yuan, but R&D investment reached 130 million yuan
However, at present, Heyu Biological does not have commercial products, and does not get any income from product sales. According to the prospectus, in 2020, Heyu Bio will lose 706 million yuan during the reporting period, and the net loss in the first quarter of 2021 will be 123 million yuan. Compared with the net loss of 56.49 million yuan in the same period last year, the loss growth rate is 117.74%. The main reason for the increase in losses was that 571 million yuan was included in other expenses. In addition, in 2020, more drug candidates from Heyu Bio will enter preclinical and clinical research, which will increase R&D investment; according to the prospectus, R&D expenditure will increase by 62.8% from RMB 81.5 million in 2019 to RMB 132.7 in 2020 million dollar. In the first quarter of 2021, R&D expenditure has reached 38.109 million yuan, a year-on-year increase of 139.72%.
Image source: Heyu Biological Prospectus
Strong R&D strength, attracting capital's favor
According to the prospectus, Dr. Xu Yaochang, Dr. Yu Hongping, and Dr. Chen Zhui, the co-founders of Heyu Biotech, are in Ameile (Ametinib), Cymbalta (Duloxetine), Balversa (Erdatinib), and Reyvow (Lamitriptan). ), FuLaimei (Polyethylene Glycol Loxenatide), Kisqali (Rebecini), Xinfu (Fumatinib) and Venclexta (Venetog) have made great contributions to the research findings and made them Successfully achieved commercialization. Heyu Biology R&D team currently has about 90 members, more than 80% of the members have graduated degrees, and more than 30% of the members have doctoral degrees. Has 65 patents in 16 countries and regions (including Mainland China, Taiwan, Hong Kong, the United States, Japan, Canada, South Korea, the European Union, Australia, Russia, Brazil, Mexico, India, the Philippines, Israel and Singapore) (including those with global Rights licensing patents) and 108 patent applications. At the same time, a multi-dimensional discovery platform has been established, which can comprehensively conduct cancer genomics and screening, computational medicinal chemistry, transformation and biomarker science. The first-class R&D strength has attracted the favor of major capitals. It is reported that since its establishment, Heyu Bio has completed 5 rounds of financing, with a total financing amount of US$263 million; including the D-round financing of US$123 million in January this year. At present, Heyu Bio-Investors include Eli Lilly Asia Fund, Sinopharm Capital, CCB Capital, Taifu Capital, Qiming Venture Capital, Zhengxingu Capital, CICC Capital, Temasek, GIC, Warburg Pincus, Carlyle, Aobo Capital, Qingchi Capital and other well-known domestic and foreign institutions. In addition, Yu Biological has reached cooperation and licensing agreements with well-known biomedical and biological companies such as AstraZeneca and X4 Pharmaceuticals; it has reached a joint treatment development agreement with Junshi; it has reached a clinical supply agreement with Roche. Heyu Biology has the prospect of developing new and differentiated therapies for the treatment of cancer and other diseases to meet the urgent unmet needs of patients in China and around the world. It is optimistic by all capitals, has broad development prospects, and has full R&D competitiveness. As its drug candidates enter the final stages of development, it is expected that one or more drug candidates will be commercialized in the next few years. This time, if the Hong Kong Stock Exchange is successfully listed, the establishment of a leading biopharmaceutical company will be further accelerated, and the development of the company will also take a step forward.
