With First Chinese Small-molecule Oral Drug for COVID-19 Coming, What New Opportunities are Ushered in by the Relevant Industry Chain？

News about the progress of Chinese small-molecule oral antiviral drug for COVID-19 has been disclosed in recent days and the related R&D ushers in a critical point.

On the evening of April 17, Junshi Biosciences released the latest research results of VV116, an oral antiviral drug for COVID-19. The antiviral effect of VV116 is a lot better than that of ribavirin in a mouse model, and it could alleviate the pathological damage to lung tissues.

On April 6, Kintor Pharmaceuticals announced key data results from Phase III global multicenter clinical trials of proxalutamide for the treatment of outpatients infected with mild and moderate COVID-19. The research showed that proxalutamide was effective in reducing hospitalization/mortality rates in patients infected with mild and moderate COVID-19. Especially, it has a protection rate of 100% for all patients taking the drugs for more than 7 days.

On April 2, the official website of the Center for Drug Evaluation revealed that the status of the application for a Class III exchanging meeting submitted by Genuine Biotech had been changed from "in process" to "feedback received". In the market, it was interpreted as the indication of the clinical unblinding of Azvudine Phase III and the imminent declaration of marketing.

The first Chinese small-molecule oral antiviral drug for COVID-19 will be launched soon, and it will probably come from the above three drugs. What are the stories of these three drugs? What new opportunities will the development of oral antiviral drugs for COVID-19 bring to the companies in the related industry chain in China?

Junshi Biosciences: VV116

VV116 is a new nucleoside oral antiviral drug against SARS-CoV-2, which can inhibit the self-replication of viruses. In September last year, DreamTop Biotech, a holding subsidiary of Junshi Biosciences, entered into a co-development contract with Vigonvita to jointly undertake the clinical development and industrialization of VV116 in the cooperation zone.

The preclinical research has shown that VV116 has significant effects against SARS-CoV-2 both in vitro and in vivo, exhibiting antiviral activity against both the original and known significant variants (Alpha, Beta, Delta, and Omicron) of SARS-CoV-2. There are also high oral bioavailability and good chemical stability. VV116 is now approved in Uzbekistan for the treatment of patients infected with mild and moderate COVID-19. Results of the clinical research conducted in Uzbekistan in 2021 revealed that: in the VV116 group, compared with the control group, the patients' clinical symptoms can be improved, shortening the time to change from positive to negative results of nucleic acid tests for COVID-19, and significantly reducing the risk of developing into severe ones and even death.

Kintor Pharmaceuticals: Proxalutamide

Kintor Pharmaceuticals' proxalutamide is an ACE2 and TMPRSS2 degradation agent that has shown promising efficacy throughout the period (including early and mid-late stage) of infection with COVID-19.

On April 6, Kintor Pharmaceuticals announced the final analysis results of a global multicenter Phase III clinical trial (NCT04870606) of its self-developed oral antiviral drug for COVID-19, proxalutamide, for the treatment of patients infected with mild and moderate COVID-19.

According to data, proxalutamide is effective in reducing hospitalization/mortality rate in patients infected with COVID-19 (mainly infected by Delta and Omicron mutant strains). Especially, for all patients taking drugs for more than 7 days, and middle and high age patients suffering from COVID-19 with high-risk factors, there is a protection rate of 100%, which is statistically significant. Moreover, proxalutamide can significantly reduce the viral load of SARS-CoV-2 and improve the symptoms. The safety of proxalutamide administration was further validated (for adult men and women aged over 18).

When the data were released, the share price of Kintor Pharmaceuticals jumped nearly 2 times in one day.

Genuine Biotech: Azvudine

Azvudine is one of the new oral antiviral drugs for COVID-19 that has received the most public attention recently. It was initially an anti-HIV drug. In February 2020, Azvudine was found to be effective in SARS-CoV-2. In April of the same year, it was approved by the National Medical Products Administration for Phase III clinical trials against COVID-19. Phase III clinical trials in China, Brazil, and Russia have been completed.

On April 2, Genuine Biotech applied for Class III exchanging meeting, which was regarded by insiders as a sign that "the first Chinese antiviral drug for COVID-19 is about to hit the market".

On April 16, at the Chinese Development Conference on Medicine, Jiang Jiandong, Member of the Chinese Academy of Medical Sciences and Academician of the Chinese Academy of Engineering, reporting on the R&D and progress of Azvudine in the treatment of COVID-19 indications, said that as a new nucleoside antiviral drug for COVID-19, oral Azivudine 5mg is more effective than intravenous 100mg Remdesivir because Azivudine is only phosphorylated in the thymus, thus protecting the immune system and enabling chemotherapy to be converted into immunotherapy.

Small-molecule oral antiviral drugs for COVID-19 support the development of Chinese related industry chain.

There are two oral antiviral drugs for COVID-19 that have been approved for marketing worldwide, namely MSD's Molnupiravir and Pfizer's Paxlovid.

In November 2021, the UK Medicines and Healthcare Products Regulatory Agency (MHRA) approved Molnupiravir for the treatment of adult patients infected with mild and moderate COVID-19 at US$ 709 per course of treatment.

Molnupiravir was developed by MSD in collaboration with Ridgeback Biotherapeutics and is an oral polymerase (RdRp) inhibitor. Molnupiravir binds to the RNA polymerase of SARS-CoV-2 and by introducing the wrong nucleotide into the newly synthesized RNA molecule, the viruses can be killed because of the error in RNA.

On December 22, 2021, FDA approved an Emergency Use Authorization (EUA) for Pfizer's Paxlovid for the treatment of ambulatory adult outpatients infected with COVID-19 who are at high risk of developing severe symptoms. Paxlovid is priced at US$ 530 per course of treatment.

Paxlovid is a compound formulation of the 3CL protease inhibitor, nirmatrelvir, (PF-07321332) and ritonavir. Nirmatrelvir inhibits the replication of SARS-CoV-2 protein, while ritonavir slows the breakdown of nirmatrelvir, allowing its effective concentration in the body to maintain for a longer period.

Paxlovid has now been fully introduced into China as a first-line drug for the treatment of patients infected with COVID-19. As oral antiviral drugs for COVID-19 are being put into use, attention is paid to related industry chain companies, mainly including CDMO enterprises, APIs, and intermediates.

Benefitting from CDMO companies

The first category of benefiting companies is CDMO companies that directly provide contract customized R&D and manufacturing services for oral antiviral drugs for COVID-19. Some Chinese leading CDMO companies producing the small molecule drugs have already occupied an important position in the industry chain by their strong capacity supply, cost advantages, and delivery capabilities.

On February 20, 2022, Asymchem announced that it has been providing services of contract development and manufacturing organization (CDMO) for a small molecule chemical innovative drug of a pharmaceutical company. Meanwhile, it has recently entered into a new Supply Contract with the client for the relevant products, with the contract amount equivalent to approximately RMB 3.542 billion this time, and the delivery time of the year 2022.

On November 17, 2021, Asymchem signed a small molecule drug supply contract with an equivalent amount of approximately RMB 3.1 billion and the delivery time from 2021 to 2022.

On November 28, 2021, Asymchem signed a new supply contract for approximately RMB 2.720 billion, with a delivery time of the year 2022.

In the same month, Proton also announced a "mysterious order", stating that it had received an order from a large US pharmaceutical company for services for a small molecule drug. Proton will provide CDMO services for the company, with a total order amount of US$ 681 million. The announcement said that the relevant purchase order had come into force and the delivery time is the year 2022.

On November 30, 2021, Proton also made a major order announcement. According to the announcement information, the cumulative order amount for the drug has reached US$ 217 million in the past 12 consecutive months. The delivery time is from 2021 to 2022.

Although Proton and Asymchem said that it is inconvenient to disclose the client and product-related information due to the commercial secrets, in combination with the layout and time nodes of small molecule drugs by various industry players, it is believed in the market that these orders are related to Pfizer's Paxlovid. Moreover, Asymchem and Proton have previously had long-term cooperation with Pfizer. However, these two companies did not respond in depth.

In addition to CDMO companies, the second category of companies benefiting from the oral antiviral drugs for COVID-19 is API industry chain companies. What about the API companies?

The API industry chain of Molnupiravir

Molnupiravir (nucleoside inhibitor EIDD-2801/MK-4482) is an oral ribonucleoside drug jointly developed by MSD and Ridgeback. On January 20, 2022, Medicines Patent Pool (MPP) announced an agreement with 27 generic drug manufacturers to license the production of low-cost, oral antiviral drugs for COVID-19, Molnupiravir, for supply to 105 low- and middle-income countries.

MPP (known as the MedicinesPatent Pool), based in Geneva, was established with the support of the United Nations, UNITAID (international drug procurement agency), and the Swiss Agency for Development and Cooperation (SDC). MPP was initially established to promote and facilitate access to new, high-cost anti-AIDS drugs in developing countries.

MPP itself does not produce and sell generic drugs. It negotiates voluntary licenses for drug patents with original R&D drug companies, which place their drug patents in a patent pool, and generic drug companies apply to MPP for licenses to implement the patents in the pool and produce and supply generic drugs to low- and middle-income countries.)

5 of the 27 companies are from China, including Fosun Pharma, Lonzeal (a shareholder of Aidea), Langhua Pharmaceutical (a holding subsidiary of Viva Biotech), Brightgene, and Shanghai DESANO. Among them, Langhua Pharmaceutical is only authorized to produce APIs, while the other four can produce both APIs and finished products.

Uridine is the raw material for the production of EIDD-2801, which is the raw material for the production of Molnupiravir. Molnupiravir is a nucleoside analog, and its suppliers involved in the upstream API intermediates are Tuoxin Pharmaceutical and Tianyu Pharmaceutical.

The API industry chain of Paxlovid

Paxlovid is a combination of two main drugs: one is nirmatrelvir, a tablet designed to inhibit the 3CL protease, thereby preventing viral replication, and the other is ritonavir, a tablet that slows the breakdown of Paxlovid to help it to remain a longer active time in the body at higher concentrations.

On March 17, MPP announced that it had signed agreements with 35 pharmaceutical companies to allow them to manufacture APIs and preparation of one of Paxlovid's components, nemativir tablets. Five Chinese companies were authorized, namely Shanghai DESANO, Huahai Pharmaceutical, Apeloa Pharmaceutical, Fosun Pharmaceutical, and Jiuzhou Pharmaceutical.

The combination of 300mg (150mg/tablet) of nirmatrelvir and one tablet of ritonavir (100mg) is administered twice a day for 5 days, according to 100PEI. Considering Pfizer's forecast of 120 million Paxlovid treatments in 2022, 360 tons of nirmatrelvir APIs would be required.

The upstream drug suppliers of Paxlovid mainly involve intermediates and APIs such as caronic anhydride, azabicyclic, SM1, SM2, and ritonavir. Major manufacturers of caronic anhydride are Aba Chemicals and Jianfeng Group.

For SM1 and SM2, suppliers with supply capacity and sufficient production capacity in China are Menovo, Tianyu Pharmaceutical, Hicin Pharmaceutical, and Aurisco.

For ritonavir, the subsidiary of Jinghua Pharmaceutical, Senxuan Pharmaceuticals, accounts for 70% of the market share of ritonavir intermediates, ranking first in the industry.

At this point in the development of the pandemic, vaccines alone will not completely stop the spread of SARS-CoV-2. The oral specific drug is the key to finally saving people from the fear of the virus and is the last step to end the impact of the pandemic. With oral antiviral drugs for COVID-19 successively developing from the R&D into the commercialization, the production will rapidly increase under the catalyst of the pandemic, and the demand for upstream intermediates and APIs also shows explosive growth. This industry chain is popular as ever before. At the same time, several Chinese companies in oral antiviral drugs for COVID-19 led the way. It is expected that the pharmaceutical companies in the forefront can withstand the heavy test before the marketing and usher in the first Chinese antiviral drug to market as soon as possible.

References:

1. Zhang, R., Zhang, Y., Zheng, W. et al. Oral remdesivir derivative VV116 is a potent inhibitor of respiratory syncytial virus with efficacy in mouse model. Sig Transduct Target Ther 7, 123 (2022). https://doi.org/10.1038/s41392-022-00963-7；

2. Nearly RMB 9.4 billion! Numerous Orders of Specific Drugs for COVID-19 Make Asymchem a Single Adversary Ouryao;

3. Zhang, R., Zhang, Y., Zheng, W. et al. Oral remdesivir derivative VV116 is a potent inhibitor of respiratory syncytial virus with efficacy in mouse model. Sig Transduct Target Ther 7,123 (2022). https://doi.org/10.1038/s41392-022-00963-7.