Novartis Bets on Beijing Approving Cutting-Edge Cancer Treatment

Swiss pharmaceutical behemoth Novartis International AG has partnered with a Chinese biotech firm as it races global rivals to launch a cutting-edge cancer treatment in the world’s most populous country.

Novartis has licensed Shanghai-based Cellular Biomedicine Group Inc. (CBMG) to manufacture and supply its cell-based CAR-T therapy Kymriah in China. The Swiss firm will lead the distribution, regulatory and commercialization efforts, CBMG said in a statement Thursday.

The deal will also result in Novartis obtaining for $40 million a stake of around 9% in the Chinese partner, plus some royalty-free CBMG worldwide intellectual property. CBMG will enjoy a share of returns based on product sales.

Despite the collaboration, shares of Nasdaq-listed CBMG fell 6.58% Thursday to $22, with daily trading volume quadrupling from the average level. New York-listed Novartis edged down 0.35% as well.

The CAR-T treatment that the partnership covers is a type of immunotherapy that collects and uses patients’ own immune cells to treat their cancer. It is considered the “fifth pillar” of cancer treatment, along with drugs, surgery, chemotherapy and radiation therapy.

The technology is still, however, in the early stages of development. Only two CAR-T treatments have been approved so far by drug regulators anywhere in the world.

In August, 2017, the U.S. Food and Drug Administration (FDA) approved Novartis’s Kymriah for use in treatment of children with acute lymphoblastic leukemia. Two months later, the U.S. regulator approved Yescarta, developed by Gilead Sciences Inc.’s subsidiary Kite Pharma Inc., for treatment of advanced lymphoma in adults.

Earlier this month, the European Union opened its gates to CAR-T, greenlighting Kymriah and Yescarta.

However, the therapy is still not available in China, except for a pilot health care zone in Hainan province that has tentatively launched some drugs and medical products approved by the FDA.

“Together with Novartis, we hope to bring the first CAR-T cell therapy to patients in China,” said Tony Liu, CEO of CBMG.

Several pharmaceutical industry professionals told Caixin that securing a local manufacturing partner won’t necessarily help speed up the regulatory approval process, but might help cut costs and provide access to more local patients’ data.

Novartis’ major CAR-T rival Kite Pharma has also secured a partnership with a Chinese drugmaker, Shanghai Fosun Pharmaceutical Group Co. Ltd., to localize the technology and eventually introduce the treatment to the China market.

Other clinical-stage CAR-T developers have also expanded into China through collaborations. U.S. biopharma firm Juno Therapeutics paired with Chinese peer WuXi AppTech, while Johnson & Johnson subsidiary Janssen Biotech Inc. has formed a tie-up with China’s Genscript Biotech Corp.

On Thursday, shares in Hong Kong-listed Genscript fell 26.79% before trading was halted after the company was attacked in a short selling report questioning its CAR-T research data credibility. The stock rebounded Friday with a gain of 11.47% after the company’s denial of all accusations.

Despite the development of these strategic market alliances, the nascent CAR-T technology, now mainly used to treat blood cancers, remains far from a breakthrough. The U.S. National Cancer Institute said that “in many respects, it’s still early days for CAR-T cells … including questions about whether they will ever be effective against solid tumors like breast and colorectal cancer.”

Contact reporter Coco Feng (renkefeng@caixin.com)