Over 80 billion, a new record! China Meheco Group's largest overseas transaction in history has arrived.

812.2 billion - the amount of China's innovative drug overseas transactions has once again broken the record. The total amount of this transaction is estimated to be as high as $11.4 billion, equivalent to RMB 812.2 billion, with an initial payment of $1.2 billion, equivalent to RMB 85.5 billion, equaling the total revenue of the authorized drug company last year. Foreign media commented that this transaction is a "turning point for China's innovative pharmaceutical industry". And in this transaction, the most important thing is not just the amount. Over 80 billion, the largest single transaction in the history of China's innovative drug overseas. This astronomical transaction is a global strategic cooperation reached between INNOVENT BIO (01801) and Takeda Pharmaceutical Co. Ltd. Sponsored ADR (TAK.US), with a total transaction amount of $11.4 billion, and an initial payment of $1.2 billion (including $100 million in premium strategic equity investment). What kind of drug is so valuable? According to the details currently disclosed, the transaction includes three main contents: (1) INNOVENT BIO and Takeda Pharmaceutical Co. Ltd. Sponsored ADR will jointly develop a new generation of IO cornerstone therapy IBI363 (PD-1/IL-2-bias) globally, and commercialize it in the United States. Takeda Pharmaceutical Co. Ltd. Sponsored ADR will lead the related work under the joint governance and coordinated development plan; at the same time, INNOVENT BIO grants Takeda Pharmaceutical Co. Ltd. Sponsored ADR the commercialization rights of IBI363 in regions outside Greater China and the United States. (2) INNOVENT BIO grants Takeda Pharmaceutical Co. Ltd. Sponsored ADR exclusive rights to IBI343 (CLDN18.2 ADC) in regions outside Greater China. (3) INNOVENT BIO grants Takeda Pharmaceutical Co. Ltd. Sponsored ADR exclusive option rights to IBI3001 (EGFR/B7H3 ADC) in regions outside Greater China. What are these three therapies? Let's go through them one by one: IBI363 The global first-in-class (FIC) PD-1/IL-2-bias bispecific antibody fusion protein. This drug uses a unique PD1 monoclonal antibody and IL-2 fusion design to activate effector T cells. Potential therapeutic advantages: Phase I/II clinical trial data shows excellent tumor responses and preliminary survival benefits for immune-refractory lung cancer, cutaneous/mucosal melanoma, and microsatellite stable (MSS) colorectal cancer. Latest progress: It has entered multiple registration clinical developments, and a global Phase III registration clinical trial for IO-resistant squamous non-small cell lung cancer (sqNSCLC) is about to start. It has obtained the breakthrough therapy designation from China's NMPA and the fast track qualification from the U.S. FDA. IBI343 An ADC targeting CLDN18.2 and topoisomerase 1 (TOPO1) inhibitor, with high stability and strong cytotoxicity. Potential therapeutic advantages: In terms of safety, it has significantly improved compared to other ClDN18.2 similar products and can be explored in combination with chemotherapy. It has demonstrated unique differentiated advantages in frontline treatment. Latest progress: A Phase III clinical trial for gastric/esophagogastric junction cancer (G-HOPE-001) has been launched, obtaining the breakthrough therapy designation from China's NMPA. A global Phase I/II clinical trial for previously treated pancreatic ductal adenocarcinoma (PDAC) has been completed, obtaining the breakthrough therapy designation from China's NMPA and the fast track qualification from the U.S. FDA. IBI3001 The world's first dual-target ADC targeting B7-H3 and EGFR. Potential therapeutic advantages: Multiple anti-tumor mechanisms, including enhanced EGFR blockade, receptor-mediated internalization, and potent ADC-mediated cytotoxicity, demonstrating a high safety and therapeutic window in preclinical models. Latest progress: In Phase I clinical stage, the world's first EGFR/B7 H3 ADC to enter clinical trials. With $11.4 billion, it is truly a sky-high price in China's innovative drug overseas market. From a macro perspective of China's innovative drug overseas, this transaction has broken the confirmed record of total transaction amount; for INNOVENT, the immediate initial payment that can be received is close to the total income for the entire year last year - it is worth noting that INNOVENT BIO's 2024 financial report was very impressive, achieving Non-IFRS net profit and EBITDA positive, with total revenue reaching RMB 9.42 billion. If Chinese innovative drugs want to make money, "going overseas" is still an important issue. Following Takeda across the river: money is needed, but also learning to "build ships". Today, Chinese pharmaceutical companies are exploring more and more new models. The more common ones are two: First, "building ships to go overseas": self-developed and self-sold. This model requires local pharmaceutical companies to independently conduct clinical trials overseas, apply for market approval, and after approval, their own teams can sell the products. Although it is autonomous and the revenue is their own, it requires a large amount of capital investment and directly faces the "encirclement" of European and American local pharmaceutical companies - it is obvious that going to someone else's territory with bare hands is extremely difficult and risky. Second, "borrowing ships to go overseas": pharmaceutical companies directly sell the pipeline, leaving everything to partners, using their mature international development and commercialization channels, and waiting for money to be received (milestone payments). This is currently the preferred "going overseas" method for the vast majority of Chinese pharmaceutical companies, specifically License-out. However, this time, in addition to breaking the amount record, INNOVENT BIO and Takeda chose a third path. On the day this transaction was announced, INNOVENT BIO held a conference call for interpretation. The most mentioned keyword at the meeting was not record-breaking or astronomical, but "Co-Co" mode. The Co-Co mode is the "Joint Development and Commercialization Mode", with the core feature being that Takeda and INNOVENT will jointly bear development costs and share commercialization profits. For example, in this transaction, IBI363 is not the common "authorization outside Greater China" but a complete cooperation: After authorization, Takeda will lead the joint development and commercialization work under a "joint governance and coordination development plan", with Takeda and INNOVENT sharing the development costs in a 40/60 ratio (INNOVENT/Takeda). At the same time, profits or losses in the U.S. market will also be shared in a 40/60 ratio. Even in the follow-up clinical development plan, although led by Takeda, it also needs to be "agreed upon" by both Takeda and INNOVENT and "jointly promoted". Why choose the Co-Co mode? INNOVENT BIO stated in the conference call interpretation: "Takeda needs more than just cooperation on the commercial level, but hopes to build Takeda's globalization capabilities through commercial cooperation." In 2021, Takeda announced the company's second decade development goal, hoping to become a company with global development, industrialization, and commercialization capabilities by 2030. By 2027, product revenue will reach RMB 20 billion; by 2030, at least 5 pipeline products will enter global multicenter Phase III clinical trials, and overseas sales will account for 40%. To achieve these aspirations, only money is far from enough for Takeda. In this Co-Co cooperation with Takeda, how to leverage the existing resources and experience of a well-established global pharmaceutical company and build their own global development and commercialization capabilities is the key focus for Takeda. Of course, making iron requires one's own strength. Takeda's choice of the Co-Co mode and its successful realization are partly due to the high value of the pipeline itself, and also a manifestation of Takeda's global development potential. Whether this potential can be realized as strength, let's set a five-year alarm clock, and let's see then whether China's pharmaceutical MNC has been created. This article is reproduced from "DXY", author: Yuyi; GMTEight editor: Xu Wenqiang.