The "Secondary" Impact Of The Epidemic: Clinical Trials And Cdmo Industries With The Pause Button Pressed

With the arrival of the new epidemic situation of secondary pneumonia (vid-2020), most of the hospitals in China have been suspended.

On March 24, China's largest cdmo enterprise, yaomingkant, released its performance in 2019. Li Ge, chairman and chief executive officer of the company, talked about the impact of the epidemic on its business in 2020. "The covid-19 epidemic missed about one month's operation time in China, and the company's clinical trial service business was also affected to a certain extent."

On the one hand, because patients are not recommended to go to hospital during the epidemic, previous clinical trials may be suspended; on the other hand, new clinical trials can only be delayed.

On March 23, Lilly became the first multinational pharmaceutical company to announce the suspension and postponement of most clinical studies. "The company will delay the start of most new studies and suspend most ongoing studies. However, clinical trials will continue to be conducted for patients already enrolled. "

"The epidemic situation will have varying degrees of impact on CrO (contract research organization) and cdmo (contract development and manufacturing organization) enterprises. First, there are no patients in the hospital who can join the group; second, the business pays according to the stages. The profits of enterprises will certainly be delayed due to clinical suspension." "Now, because of the epidemic, the whole process has to be delayed for at least one quarter," an industry source told the 21st century economic report

It is estimated that the total amount of these trials will reach US $21.54 billion by the end of this year, due to the large number of trials due this year, it is estimated that there will be 21.54 billion new studies due to the global epidemic.

Cdmo before the outbreak

In recent years, a series of policies, such as the reform of the domestic drug examination system, the listing license system (MAH), generic drug consistency evaluation and bulk purchase, medical insurance negotiation and so on, have promoted the continuous growth of domestic innovative drug R & D and production market demand.

According to Frost & Sullivan's prediction, the global scale of cro, chemical drug cdmo / CMO, cell and gene therapy cdmo / CMO industry will be about 127.7 billion US dollars in 2019, and it is estimated that the industry scale will reach 193.7 billion US dollars in 2023, with an average annual compound growth rate of about 11.0% from 2019 to 2023.

Judging from the performance of Wuxi apptec in 2019, its growth momentum will not decrease. In 2019, the business income of Wuxi apptec increased by 33.9% to RMB 12.872 billion, with more than 1200 new customers and more than 3900 active customers. 60% of its revenue comes from us customers, 23% from Chinese customers and 12% from European customers. The top 20 pharmaceutical companies in the world account for about 32.5% of the total revenue.

Chongqing boten pharmaceutical, another domestic cdmo enterprise, also said in its financial report in 2018 that it continued to strengthen its cooperation with the world's top 50 pharmaceutical companies in terms of marketing transformation. In 2018, the total revenue of potential major customers including Pfizer, Roche, Novartis, Roche, bringer Ingelheim and aierjian exceeded 100 million yuan, with a year-on-year growth of about 140%.

In addition, small and medium-sized pharmaceutical companies, including small and medium-sized pharmaceutical companies, have become important drivers of innovation. According to Frost & Sullivan report, by 2023, the number of small pharmaceutical companies is expected to reach 13892, accounting for 79.1% of the total number of pharmaceutical companies.

Due to the relatively low growth rate of CMO patent system from 2015 to 2020, the average growth rate of CMO is 7% higher than that of the global pharmaceutical industry. According to business insight data, it is estimated that the size of China's CMO market will reach 8.5 billion US dollars in 2020, accounting for about 9% of the global market. In addition, China's pharmaceutical R & D, production and service industry is expected to maintain rapid growth.

In 2019, the revenue from the laboratory services of Wuxi apptec in China was 6.473 billion yuan, with a year-on-year increase of 26.59%; the revenue of cdmo / CMO services was 3752.0545 million yuan, with a year-on-year increase of 39.02%. In 2018, the revenue of boten pharmaceutical to Chinese pharmaceutical companies and new drug R & D institutions was about 50 million yuan, which doubled year-on-year.

The delay is a fact

Cdmo is undoubtedly one of the industries most affected by the new coronal pneumonia.

Li Ge said the company has launched a business continuity program to mitigate the impact of the epidemic on the delivery time of customers' projects. "Transfer some urgent projects of Wuhan R & D center to the R & D centers of the company in Shanghai, Tianjin and Nantong with the consent of customers, and try our best to ensure that the projects are carried out on time. R & D and production bases in the United States have also been affected by the epidemic. Through the global layout and the application of new technologies, its plan will enable customers to promote the progress of new drug R & D projects "at home" during the period of covid-19. "

On the other hand, the impact on cdmo companies also comes from small and medium-sized innovative enterprises. An investor told the 21st century economic report that "financing of innovative drugs is becoming more and more difficult, and many projects affected by the epidemic situation have been postponed and delayed. Venture companies can't get enough money. What money can they do with cdmo business?"

Big companies are also inevitably affected. In the announcement, Lilly said the covid-19 pandemic has seriously affected the global healthcare delivery system, including ongoing clinical trials.

"We have changed the use of the laboratory for diagnostic testing of patients and are looking at potential treatments." Tim Garnett, Lilly's chief medical officer, said he would reduce the burden on medical institutions by delaying most new studies and suspending the inclusion of new patients or volunteers in most ongoing studies, "allowing doctors to focus more on fighting covid-19."

In the face of the epidemic situation, clinical trials can also have some coping styles, but the biggest risk may be that patients cannot be followed up, and a large number of clinical trials are threatened by the epidemic situation, and the delay has become a fact. According to the analysis of evaluate vantage, there are still 168 trials in the U.S. that are in progress and mainly completed in 2020. There are still 147 active but fully enrolled patients, including 64856 and 107248 subjects, respectively. At least five of these blockbusters were affected, including Lilly's tirzepate, Bristol Myers Squibb's bms-986165 (Tyk2), and Galapagos's filgtinib. OnNo Van de stolpe, founder and CEO of galapago, said on March 23 that it would "suspend filgo's clinical trials to protect patients.".

However, due to the global epidemic, more clinical work is delayed, resulting in higher trial costs. If Lilly is listed as a major sponsor of 188 clinical studies, these trials will cost about $13 billion. Similarly, there are 307 clinical trials involving more than 22 billion US dollars in BMS, 276 trials in Roche, 21.1 billion US dollars in Roche, 319 trials in Novartis, and 16.9 billion US dollars in Novartis.

However, some clinical trials have benefited from the epidemic and accelerated the start-up and completion. The market value of Gilead has also risen along with the rapid approval of its clinical trials in China and the United States. The domestic Haizheng pharmaceutical company's fabiravir got the clinical approval for the indication of new crown pneumonia while getting the flu indication, and quickly started the clinical experiment.

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