Financial Associated Press, October 23 (Reporter he Fan)Today, Coren Pharmaceutical (002422.SZ) announced that its subsidiary was terminated by Merck & Co Inc to cooperate in two preclinical ADC products, causing an uproar in the industry. Including the termination of the two ADC, the two sides previously concluded a total of 9 ADC project transactions were ranked first in the global pharmaceutical industry licensing transactions in 2022. Coren Pharmaceutical told the Financial Associated Press that the termination of the cooperation between the two projects had no impact on the rest of the cooperation between the company and Merck & Co Inc. Industry insiders said that domestic drug companies and overseas cooperation were terminated for a variety of reasons, and Coren is expected to push forward the follow-up development of the two terminated projects on his own.

According to today's announcement, Sichuan Kroenbotai Biopharmaceutical Co., Ltd. (hereinafter referred to as "Karen Botai"), a subsidiary of the company, received a formal written notice from MERCK SHARP & DOHME LLC (together with its affiliates, hereinafter referred to as "Merck & Co Inc") on October 21, 2023, and its decision: (1) to terminate the exclusive license granted to it by Karen Botai to develop, manufacture and commercialize a preclinical ADC asset. (2) not to exercise the exclusive option granted to it by Columbine to obtain an exclusive license for another preclinical ADC asset.

According to the agreement signed by the parties, Colombo is under no obligation to return any money received or pay to Merck & Co Inc in respect of the above termination excluding preclinical ADC assets, and Merck & Co Inc is under no obligation to pay any termination fees or any future milestones or royalties in respect of excluding preclinical ADC assets.

In 2022, Colombo authorized Merck & Co Inc nine ADC products for three times, with a total value of US $11.821 billion, making it the domestic pharmaceutical company with the largest number of ADC drug transactions last year. In July this year, Columbine B (06990.HK), known as the "ADC leader", was officially listed on the main board of the Hong Kong Stock Exchange.

From the perspective of the secondary market, by the end of the day, Colin Pharmaceutical was down 6.92%, and Colombo Biological-B was down 7.23%.

Coren Pharmaceutical told the Financial Associated Press that the termination of two of the seven preclinical projects the company has worked with Merck & Co Inc has no impact on the cooperation of key projects such as SKB264 and SKB315 as well as four other preclinical projects. In addition, Merck & Co Inc also expressed confidence in SKB264/MK-2870 and will quickly push forward the three-phase plan for related indications.

Li Changcheng, an industry veteran, told the Financial Associated Press that the termination of authorized cooperation between domestic and foreign enterprises is relatively common in recent years, mainly due to the increased risk of differences in international regulation of the pharmaceutical industry. The improvement of the level of Chinese pharmaceutical enterprises no longer requires foreign companies to do marketing and academic guidance, as well as the mismatch between drug development risks and their own strategies, and many other factors.

For projects that have been terminated, "it is expected that Colin may continue to promote development on his own. After all, when cooperating with others, leading and developing technology is actually being done by his own company. Many domestic enterprises draw on the technical reference of foreign enterprises or take advantage of the endorsement of well-known foreign enterprises." Li Changcheng told the Financial Associated Press that the termination of this cooperation will have little impact on Colin's business level, and if Collen continues the development of the two projects, it may have an impact on the future promotion of the terminated project abroad, but not on domestic promotion.

It is worth noting that there are rumors in the market that Colin Botai's cooperation between the two ADC projects has been terminated, which is related to the ADC cooperation reached between Merck & Co Inc and the first three.

Merck & Co Inc agreed to buy the right to sell three experimental anti-cancer drugs from Japanese drugmaker first Sankong in order to further expand its product portfolio with an advance payment of US $4 billion, according to the official website of the first third Communist Party of Japan. up to $22 billion will be paid when the drug reaches a milestone in future development. The two companies have reached global development and commercialization agreements for three DXd ADC models (HER3-DXd, I-DXd, R-DXd). The two sides will cooperate to develop these drugs and commercialize them globally (the first three Communists will maintain exclusive rights in Japan), and the first three Communists will be fully responsible for the manufacture and supply.

Trading in Colombo was temporarily suspended at noon on the 20th. According to media reports at that time, relevant sources in the Columbine pharmaceutical industry said that they had learned from Colombo that because of Merck & Co Inc's cooperation with the first third Communist Party in the morning, there were false rumors about Colombo in the Hong Kong market, which had a relatively negative impact on the stock price, so Colombo applied to the stock exchange for a short suspension and would make a clarification announcement.

As for the connection between the termination and the first third Communist Party ADC transaction, the Financial Associated Press reporter has not yet received a response from Merck & Co Inc and Colin Pharmaceutical.