BEIJING – Biotech companies in China were among the first to experience disruptions in their operations and development plans from the COVID-19 outbreak, with employees unable to report to work and difficulties continuing trials.

All have had to adjust and improvise to one extent or another to resume daily operations. But, for an industry that’s no stranger to navigating complexity, the solutions have often been as unprecedented as the challenges.

“The first two weeks in February is what I would classify as uncertainty and disruption,” Hutchison China Meditech Ltd. (Chi-Med) CEO Christian Hogg told BioWorld. A nationwide lockdown in China resulted in disruptions in manufacturing, logistics and transport. Distributors of Chi-Med’s drugs were running low on inventory after the Chinese New Year, which fell in the last week of January this year.

“We had to find ways to get our products to those distributors,” Hogg said. Furthermore, to resume operations, China has required employers provide protective gear for their staff, meaning that Chi-Med’s team had to make sure all the staff in its factory had a regular supply of face masks to ensure their safety, he added.

As for resuming manufacturing, Hogg said management worked closely with local authorities to get their support to reopen factories. Considered an essential activity, drug manufacturing was one of the first things to resume in China.

For employees to return to work as soon as possible, drug developer Beigene Ltd. assigned alternate working shifts and prepared protective equipment for staff, Xiaobin Wu, general manager of China and president of the company, told BioWorld.

“Our office staff have been working from home since February 3 via teleconference and been doing so for three weeks. In early March, we began to assign alternative working shifts. We want to make sure that we will not need to evacuate everyone if something happens. We practice social distancing in the office, require everyone to wear a mask and get body temperature tests and sterilize elevators,” Wu explained.

Harbour Biomed Therapeutics Ltd. CEO Jingsong Wang told BioWorld that his company had set up an emergency management group. He led the group to coordinate all activities related to COVID-19 to ensure the highest priority of focus and the resources needed are allocated to address the rapidly evolving situation. Similarly, he instructed work be done remotely whenever possible.

“When the situation became stabilized and facilities ready to accept on-site workers, qualified employees were pre-screened based on their qualification and the level of necessity for returning to work on site,” Wang said.

Clinical challenges

The bigger issues have been on the clinical front, which could be crucial for innovation-driven biotech companies. Developers of cancer drugs in particular have faced specific challenges such as clinicians being unable to return to work, patients unable to visit hospitals regularly or get hold of the drug and enrollments being disrupted.

On March 3, Beigene said in a statement to shareholders that it may experience difficulties in patient enrollment due to the coronavirus impacting China and elsewhere. Its clinical trials for PD-1 antibody tislelizumab were reportedly disrupted.

The company expects the outbreak “will have a negative impact on our operations in China, including clinical trial recruitment and participation, regulatory interactions and inspections, and commercial revenue, particularly in the first quarter of 2020 and possibly longer depending on the scope and duration of the disruption.”

Wu said that as an R&D-focused company, Beigene’s priority was to resume work in the laboratory.

“One-third of our R&D staff returned to their duties following the Chinese New Year. It is important to carry on our clinical trials. We have also prepared sufficient protective equipment for the team,” he said.

To minimize impacts, Beigene made plans with the principal investigators in advance, such as arranging online communications between physicians and patients.

Chi-Med has adopted similar measures to maintain interactions with patients. In an ongoing study of fruquintinib in patients with gastric cancer in China, Hogg said the company has arranged for clinical interactions to be done via phone or video.

“It's better if the patient is in the clinic, but from a safety standpoint, if you get on the phone with the physician, you can still get an assessment on safety,” he explained.

Besides virtual or audio consultations, Chi-Med has also made efforts to deliver the drug to patients’ homes to prevent a halt in medication.

“We've had to improvise for hundreds of people on our clinical studies to make sure that there are no protocol violations because patients are not seeing their physician,” he said.

With the situation slowly improving in China, Hogg said Chi-Med has not seen huge issues with existing patients in its clinical trials, but warned of further issues if things get worse in the future. One particular challenge may be enrollment.

For its gastric cancer study, Chi-Med would normally enroll 30 or 40 patients in a month, but now the company has seen fewer being enrolled, partly because patients have to go through pre-screening at the hospital, which they now avoid visiting.

To address challenges on the clinical front, biotech executives have called for action from the authorities.

“The biggest impact we’ve seen is how to keep hospital operations orderly,” Beigene’s Wu said. “Although most of the oncologists have not been sent to Wuhan by the government to provide medical assistance, in order to avoid cross infection, a lot of hospitals have limited the number of visits to their oncology department. Patients aren’t willing to visit hospitals for treatment either.

“We hope that our health authorities could roll out specific guidelines on how to restore order at the hospitals, as this is crucial to clinical trials,” he added.

On the regulatory front, there are also concerns that drug approvals could be delayed. Chi-Med’s Hogg said drug regulators have been working hard to keep regulatory processes moving normally, even though “they would all be very busy with all the antiviral clinical trials that are kicking off in China.”

Hogg: Balance risks and stay disciplined

Despite challenges at home, Chi-Med’s hopeful CEO stressed that nearly half of the clinical trials the company is conducting are outside of China and they have remained unaffected.

“We have eight small-molecule cancer therapies in over 30 clinical studies around the world,” Hogg said. “There aren’t too many biotech companies in China that have such a high level of ex-China clinical activity underway. So, from a risk standpoint, it's kind of more balanced.”

Multinational pharma companies have also had to re-evaluate their operational strategy. Sanofi SA has announced plans to launch a new European active pharmaceutical ingredients (APIs) venture, citing the industry’s heavy reliance on APIs sourced from Asia.

“It makes sense that if you're a global multinational company, you’d want to balance risk. I think this coronavirus has made people realize that ‘Oh, actually we need to spread our risk a little bit more,’” Hogg said.

He stressed that other factors such as political instability or natural disasters can also cause disruptions. Senior management needs to plan ahead to decentralize risk.

There are also concerns about whether cash-strapped biotech startups can survive through the current disruptions, especially when clinical trials cannot go ahead as planned. The gloomy economic outlook may also affect the financing plans for these young companies.

“A lot of younger companies will be suffering at the moment. Those that have good financial discipline will survive,” Hogg said.

He said he expects the survivors will be much stronger when the next positive cycle comes back, while companies that are poorly managed will have disappeared already. A takeaway for investors from this COVID-19 outbreak is the importance of investing in companies that have long track records of financial competence and sensible behavior, said Hogg.

“We navigated the 2008 global financial crisis and we suffered through the massive equity capital markets downturn between 2009 and 2011,” Hogg said. “It's discipline that we learned during those times that puts us into a good position today to manage the challenges.”

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