Keymed Biosciences is a prime example of a young Chinese biotech churning out pipeline candidates ripe for out-licensing to Western drugmakers.
The Chengdu-based company, which already markets its own drug in China, has forged four NewCo deals since July. In the NewCo model, a biotech in China out-licenses a drug candidate to a startup formed by Western investors for clinical development in the US and/or Europe.
Keymed is now one of the most active deal-slinging Chinese biotechs at a time when drug development in China has stepped into the global spotlight. For drugmakers looking to build up their pipelines, the country’s molecules are of interest, given that they can be cheaper to license than programs developed by US biotechs and are more quickly produced in China, with its high-grade chemistry oversight, than the rest of the world.
Keymed made three deals in January (
Ouro
,
Prolium
and
Timberlyne
) and one in July (
Belenos Biosciences
). It also announced a
licensing deal for antibody-drug conjugates with AstraZeneca
in early 2023.
“From our perspective, we do like more China assets to be seen and to be developed out of China,” Keymed’s head of business development Ivy Geng said in an interview.
She hopes experimental drugs from Chinese biotechs will remain in the spotlight, and she wants assets from the country’s rapidly expanding biotech industry to be developed in other countries for patients around the globe.
Keymed may only be a nine-year-old biotech, but it’s quickly made a name for itself among US biotech investors.
The drug developer was founded by PD-1 antibody leaders. CEO Bo Chen helped invent and develop toripalimab, the first PD-1 antibody developed and approved in China. And Changyu Wang, Keymed’s SVP for drug discovery and development, helped lead development of Bristol Myers Squibb’s PD-1 Opdivo, which opened up the immunotherapy field a decade ago.
With these experts at the helm, Keymed drummed up investor support and went public on the Hong Kong Stock Exchange in 2021, in an approximately $400 million IPO. Two years later, it forged the licensing deal with AstraZeneca for a Claudin 18.2 ADC for $63 million upfront and up to $1.1 billion in milestones. Keymed is
sharing those payments
with its partner Lepu Biopharma.
In early 2022, Geng joined Keymed to kick-start its business development beyond China.
The company had a bustling pipeline of investigational treatments, but little clinical expertise based in the US or the resources to pursue development outside of China. It then turned to Western investors like OrbiMed and Bain Capital, which have both built up their China networks over the years and have done multiple deals bringing Chinese assets to the US.
Keymed is active in its NewCo partnerships, holding board seats and snagging decision and information rights so it remains in tune with the future development of its drugs.
And rather than focusing on the size of the upfront payments, Keymed prefers to play the long game and get between a 20% and 30% equity stake in each new company, finance chief Ryan Zhang said. Keymed also believes the talent at the NewCo is of utmost importance, Geng said. It now has about 1,300 employees.
Having direct access to its partners will also allow Keymed to learn the nuances of the US clinical trial landscape, though Zhang noted that the company has no immediate plans to build a physical footprint in the US.
Geng declined to disclose Keymed’s business development plans. But it’s clear that the NewCo model is flourishing. Other China-based drug developers have done similar deals, including Hengrui with Aiolos and Kailera, DualityBio with Avenzo Therapeutics, and WuXi Biologics with Candid Therapeutics. In addition, BioNTech, Merck, GSK, AstraZeneca and others have acquired assets or companies in China in recent years.
The rush to secure China-developed drugs can be summed up by the scene at the Shanghai airport, according to one biotech executive, who noted how common it is now to see pharma-branded backpacks there.
