HONG KONG – Supported by the municipal government of Chongqing in China, a joint venture between South Korean drugmaker Binex Co. Ltd. and Chinese pharmaceutical company Chongqing Zein Pharmaceutical Co. Ltd. will be set up in the third quarter of this year.
Besides the investment in R&D and the marketing of biopharmaceutical products, the two firms also have secured a site for a factory in Chongqing to produce biosimilar and cell therapy, which is to be established by late 2020. Binex has also agreed to transfer its biosimilar technology to Zein.
"Our future joint venture plans to accelerate development and commercialization of biopharmaceutical products in China by investing in antibody biosimilar and innovative new drugs. Also, Binex will review license-in of domestic pipelines as well as support the Korean biopharmaceutical companies to enter the Chinese market," a spokesman at Binex told BioWorld.
"As a manufacturer of biosimilar, biobetter and new drugs developed in Korea, Binex has a good insight to figure out which biologics molecule is likely to be developed and commercialized in a smooth way," he added. "We will combine this competency with Zein's licensing and marketing capability in China."
Binex will lead the operations of the new venture, having secured the rights to both joint management and the appointment of the CEO. Also, the Korean company has a call option that guarantees up to 49% of the new venture's shares.
Binex's main products include formaldehyde and eye drops. The pipelines of the future joint venture are under discussion, the spokesman said.
The joint venture is supported by the city of Chongqing. Tang Liangzhi, the mayor of Chongqing, visited Korea with some of his government staff to join the agreement meeting between the two firms.
A traditionally industry-dominated city, Chongqing selected 10 strategic sectors to transform its economy in 2015. The sectors include biomedicine and pharmaceuticals, the internet of things, robots and smart equipment, new materials, and new energy vehicles and smart cars. The government declared a goal of creating ¥1 trillion (US$145.5 billion) in output.
In 2018, the GDP of the city exceeded ¥2 trillion and grew by 6%. The added value of strategic emerging manufacturing increased by 13.1%, and the city's bio-industry increased by 10% that year, according to the Chongqing Municipal Bureau Statistics.
The city also plans to invest ¥130 billion (US$18.89 billion) in the biomedicine industry by 2020, including biopharmaceuticals, chemical preparations, chemical raw materials and Chinese medicine, said a Chongqing municipal government spokesman.
According to global research firm Frost & Sullivan Inc., the market for biomedicine in China will grow to $39.8 billion in 2028, while keeping a compound annual growth rate of 16%.
Zein plans to use its product development, clinical studies, licensing and sales capabilities in China. The Chongqing-based company is the world's largest producer of orlistat, the main ingredient of obesity treatment Xenical, developed by Roche Holding AG. The company has licensed orlistat as an over-the-counter drug in China and has built its marketing capacity through retail websites such as Alibaba Health and JD.com in China.
The Korean company is one of the main contract development and manufacturing organization firms producing many domestic drugs for technology transfer to foreign pharmaceutical companies. Among drugs that Binex has been responsible for manufacturing include ABL-001, a bispecific antibody from Korean biotech ABL Bio Inc., and SAL-200, a phage endolysin-based candidate drug from Korean biotech Intron Biotechnology Inc. The ABL-001 transfer to U.S.-based Trigr Therapeutics Inc. in November 2018 was worth $595 million, while the SAL-200 transfer to Swiss biotech firm Roivant Sciences Ltd., also in November 2018, was worth $667.5 million. Through such arrangements, Binex has extensive manufacturing expertise to bring to the new venture.
In addition, in March 2018 the Korean company inked a mutual investment agreement with Pepromene Bio Inc., a U.S.-based drugmaker developing immunotherapies such as CAR T therapy. Binex agreed to invest $10 million in Pepromene Bio, securing 10.3% of the American counterpart's share, while Pepromene Bio agreed to place $5 million into Binex.
Clearly, Binex is knocking on the door of the Chinese market, having already tried to establish two other joint ventures. In 2017, the Korean drugmaker signed to set up joint venture companies with Dragonfarm Co. Ltd. based in Hangzhou and Tsinghua Tongfang Co. Ltd., headquartered in Beijing, to produce biopharmaceutical products. However, those plans were canceled due to the THAAD missile dispute between China and Korea.