Yongtai Bio is researching its relatively slow progress and commercialization costs, and it will continue to lose money for a long time to come.
Editor’s note: This article is from WeChat public account “Hygenogens” (ID: Qingyuanzi007), author Liang Changjun.
Three years ago, the cellular immunotherapy that was once called “cold palace” due to the “Weize Zexi incident” gradually ushered in lifting the ban, and the capital market is expected to usher in a listed company. Recently, Yongtai Bio-Pharmaceutical Co., Ltd. (hereinafter referred to as Yongtai Bio) submitted to the Hong Kong Stock Exchange, becoming another unprofitable biotechnology company to be listed in Hong Kong after the listing of the New Deal in April last year.
Wu Tai Bio was founded in 2006 and is a biopharmaceutical company specializing in the development and commercialization of T cell immunotherapy drugs. According to the prospectus, Yongtai Biotech recorded revenue of RMB 760,000 and RMB 5.22 million in 2017-2018. The income for the first half of this year was nearly RMB 700,000, mainly contributed by cell cryopreservation business and government subsidies. However, in order to focus on product development, the company has stopped new cell cryopreservation activities since November 2017, and government subsidies are also facing large fluctuations, and future income uncertainty is high.
As a research and development pharmaceutical company, Yongtai Bio has also continuously increased its R&D investment. In 2017-2018, the company’s research and development expenses were 11.93 million yuan, 31.17 million yuan, and 23.38 million yuan in the first half of this year, and 76% of the 146 employees at the end of the first half of this year were R&D personnel.
At present, Yongtai Bio is researching 10 products, among which the EAL developed from the beginning of the company’s establishment is the fastest. Its indication for liver cancer was obtained in October 2017 and is now in clinical phase II. . This is China’s first IND approval (new drug clinical), the first to be admitted to Phase II clinical trials, and the only cellular immunotherapy product approved for Phase II clinical trials of solid tumors. The company plans to launch the product in 2021, which will become the company’s first marketed product.
Yongtai Biotech also owns the CAR-T cell product chain and the TCR-T cell product chain. The IND application for CAR-T-19, the core product of the CAR-T cell product chain, was accepted by the Drug Evaluation Center in August this year. The indication is cell acute lymphoblastic leukemia. The company plans to submit the product IND application by the end of 2020. Most of the remaining 8 products are still in the preclinical research stage.
It is understood that this time, Hong Kong listed, Yongtai Biotechnology intends to use the funds raised for R&D expenses of research products EAL, CAR-T-19 and TCR-T clinical trials, new R&D and production center construction, and company Daily operations, etc.
The focus of Yongtai BiotechnologyCellular immunotherapy (also known as adoptive cell (ACT) therapy) is an immunotherapy that treats T cells to patients to treat cancer. It is a new type of therapy developed in addition to common cancer treatment methods such as radiotherapy and chemotherapy and surgery. . In 2016, due to the “Weize Xixi incident”, the cellular immunotherapy was stopped by the National Health and Health Commission for clinical application. At present, with the implementation of policy supervision, it is expected to be lifted.
In terms of future prospects, China’s cellular immunotherapy market space is expected to exceed 10 billion in four years. According to Frost & Sullivan, the market size of China’s cellular immunotherapy will rise from RMB 1.3 billion in 2021 to 10.2 billion in 2023. As more cellular immunotherapy products are approved, it is expected to reach RMB 58.4 billion in 2030. Yuan, the compound annual growth rate from 2023 to 2030 is about 28%.
However, it is still difficult for Wing Tai Bio to occupy a place in the cellular immunotherapy market. Since its establishment 13 years ago, Yongtai Bio has not yet made a profit because of the continuous increase in costs such as R&D investment and administrative expenses, and its losses have increased in recent years. In 2017 and 2018, the company lost 16.62 million yuan and 34.89 million yuan respectively. In the first half of this year, the loss increased to 50.53 million yuan, which is close to the sum of losses in the previous two years.
Considering the relatively slow progress and commercialization costs of Yongtai Biotech, it will continue to lose money for a long time to come. At the same time, as of March this year, the number of domestic cellular immunization products has exceeded 300 (from the Nature Reviews Drug Discovery report), and currently there are 10 products including Yongtai Bio in clinical stage, and concentrated in the CAR-T field. It can be seen that the market competition faced by Yongtai Bio in the future will be very fierce, which will pose challenges to its subsequent valuation.