BEIJING – Luye Pharma Group Ltd., of Yantai, Shandong Province of China, has proposed to acquire Shandong Boan Biological Technology Co. Ltd. for up to $205.8 million to expand and diversify its pipeline portfolio into biologics. The payment is to be in three parts: an initial amount of $102.9 million, followed by payments linked to China marketing approval for two of Boan’s candidates of $51.45 million each.
Previously, Luye in-licensed four biosimilar candidates from Boan to build up its pipeline of antibodies. This time, Luye will acquire a 98% stake in Boan for access to its product pipeline, R&D and manufacturing platform as well as intellectual property. Boan has eight biosimilar candidates and more than 10 innovative antibody candidates, as well as intellectual property patents covering human antibody transgenic mouse technology, phage display technology and nanobody platforms.
“We see biologics as a key opportunity for further growth in the coming years,” Sammy Jiang, Luye's vice president of strategy and business development, told BioWorld Asia. “Boan’s biosimilar and innovative antibody pipelines, global clinical work and commercialization efforts are significant to our strategic planning in this space.”
Luye said Boan’s platform technology and portfolio are “highly complementary” to its existing core strengths in the therapeutic areas it focuses on and to its technological capabilities. It also believes both can work together in many areas to create more synergies, such as sales and marketing of drugs with similar or common indications.
“Apart from the portfolio and R&D resources, Boan’s manufacturing facilities can be integrated into our global supply chain system,” Jiang explained. “Once its biological candidates get approved, we can leverage our existing global sales network to bring these products to China and more markets faster.”
Boan has candidates targeting disease in oncology and the central nervous system (CNS), as does Luye, as well as programs in diabetes and immune diseases. Five out of its eight biosimilar candidates are in the clinical stage: LY-01008 and LY-06006 are in phase III trials, and LY-01011, LY-09004 and LY-01012 in phase I/II trials.
LY-01008 and LY-06006 are expected to be used for treating colorectal cancer/non-small-cell lung cancer and osteoporosis, respectively, while LY-01011 is targeting bone metastasis from solid tumors, LY-09004 is directed toward neovascular (wet) age-related macular degeneration and other indications, and LY-01012 is for metastatic colorectal cancer.
Boan also has more than 10 innovative antibody candidates for cancer, hyperlipidemia, allergic diseases and chronic pain. Luye said those programs have the potential to be first-in-class or best-in-class in their categories and have the potential to provide the company with numerous growth opportunities in the longer term.
Time for biologics
Luye has been focusing on CNS as well as oncology, cardiovascular system and metabolism. Its LY-03004, an extended-release microspheres for injection candidate to treat schizophrenia and bipolar I disorder, is currently under NDA review by the FDA.
Last month, it said its manufacturing facility in Yantai of LY-03004 has successfully passed FDA pre-approval inspection.
Expecting its first FDA approval and its other pipelines to bear fruit soon, Jiang said it’s time to move to the next strategic goal. “In addition to developing our novel drug delivery technology platform, we are transforming and upgrading our R&D capabilities to focus on novel biological antibodies, cell and gene therapies, among others,” Jiang explained.
“Biologics will be one of our core areas,” she emphasized.
Over the last two years, Luye obtained from Boan its LY-01008, LY-06006, LY-01011 and LY-09004, which reference Avastin (bevacizumab, Roche Holding AG), Prolia (denosumab, Amgen Inc.), Xgeva (denosumab, Amgen Inc.) and Eylea (aflibercept, Regeneron Pharmaceuticals Inc.), respectively.
The firm has long adopted a strategy of driving business and portfolio growth through acquisitions. The company gained industry attention when it announced a mega deal with Astrazeneca plc to buy the rights to antipsychotics Seroquel (quetiapine fumarate) and Seroquel XR for $546 million.
Last year, it also partnered with U.S. biotech firm Elpis Biopharmaceuticals Corp. to develop CAR T therapies.
The size of the global biopharmaceutical market is estimated to be at $228 billion in 2019 and is expected to further increase to $323 billion by 2023, representing a CAGR of 7% during this period, according to Luye.