Founded in 2020 by U.S. investment firm Perceptive Advisors, LianBio (LianBio) is developing and commercializing investigational drugs in the U.S. or Europe by introducing and licensing drugs in the United States or Europe. “Our vision is to be the gateway for Western biopharmaceutical companies to China,” the company wrote in its IPO filing.
IPO: Initial Public Offering
What is In-licensing?
Licensing is the purchase of R&D, commercialization, or marketing rights to a drug or product from another company. The Company pays an upfront payment to the licensor, along with milestone fees and future sales royalties to obtain the benefits of the product’s subsequent development, clinical trials and commercialization in a given country or region.
Money goes into China
From 2019 to 2021, a number of companies were attracted by the huge market and were eager for the market for innovative drugs, investing hundreds of millions of dollars in licensing deals in China. But the market quickly collapsed, experts say this is due to price pressures, fierce competition and a global shortage of funds.
The new star is gone
LianBio has raised more than $700 million from RA Capital, Venrock and others. As of 2023, LianBio has undergone a strategic review of the company, sold back the rights to two drug candidates, rejected a takeover request, and seen management leave. Within a few months, it said it would close operations and return the funds to investors.
China is still the world’s second largest pharmaceutical market, and the demand for innovative drugs is still high, but companies do need to think about how to enter the market and succeed.
The idea of leveraging overseas resources and Chinese R&D expertise to accelerate the launch of advanced drugs in China is not new. Beginning in 2018, these licensing deals began to climb, peaking in 2019 and appearing to pick up after the lowest point of the pandemic. NRDL: National Reimbursement Drug List
What’s next?
Analysts believe that this business model can still work by carefully selecting those drugs that have a large market or few competitors. The price of NRDL is also showing early signs of improvement. “The problem is not the basic business model, but the raising of capital” because their main task is to develop and commercialize at a later stage, which requires a lot of capital.
More caution is needed in the evaluation of benefits
In addition, the current introducer will pay more attention to the patented quality of the product. Companies often look for products with longer patent protection periods, in order to avoid being squeezed into generics under China’s volume-based procurement system.
Reference data: https://endpts.com/startups-raised-millions-to-in……/
