According to the Star Daily on November 14 (Reporter Zheng Bingxun), one month after reaching a cooperation agreement with Gedeon Richter Plc. (hereinafter referred to as "ji Rui pharmaceuticals") on BAT2206 (ustekinumab) injection, the innovative drug company bio-thera solutions (688177.SH) announced that it has received a total of 10 million USD in upfront and milestone payments paid by ji Rui pharmaceuticals, amounting to 71.991 million yuan according to the exchange rates on the 13th.

BAT2206 is an ustekinumab injection developed by bio-thera solutions according to the relevant guidelines for biosimilars from China's NMPA, the USA's FDA, and Europe's EMA. It is a fully human monoclonal antibody targeting the shared p40 subunit of interleukins IL-12 and IL-23, which can specifically be applied to psoriasis, psoriatic arthritis, Crohn's disease, and ulcerative colitis.

According to the authorization agreement signed last month, ji Rui pharmaceuticals will obtain exclusive commercialization rights for BAT2206 in the EU, United Kingdom, swiss franc, Australia, and some other European countries. Correspondingly, bio-thera solutions is expected to receive a total amount of up to 0.11 billion USD in upfront and milestone payments, as well as a two-digit percentage of net sales as revenue sharing.

After receiving the aforementioned 10 million USD, bio-thera solutions stated that the arrival of this payment has further enriched the company's cash reserves and also provided assistance for the subsequent pipeline R&D and global strategy advancement.

In practical terms, bio-thera solutions does indeed need more cash flow to support its daily operation.

Currently, bio-thera solutions has 4 approved products on the market, including: adalimumab (Geleria), bevacizumab (Pulbixi), tocilizumab (Shirili), and citric acid and betamipzole (Beta Ning), but at the same time, nearly 20 pipeline products are being advanced simultaneously in research, covering treatment fields such as autoimmunity, oncology, and ophthalmology, among which 6 products are in clinical phase III or key registration studies.

This results in bio-thera solutions' R&D expenses remaining at a high level, which were 0.616 billion yuan and 0.769 billion yuan in 2022 and 2023 respectively, and has reached 0.599 billion yuan in the first three quarters of 2024. Coupled with other expense expenditures, bio-thera solutions has been in a state of "expenditure exceeding income" for a long time.

In the first three quarters of 2024, bio-thera solutions achieved revenue of 0.581 billion yuan, a year-on-year increase of 26.11%, with a net loss attributable to shareholders of 0.365 billion yuan, compared to a net loss of 0.382 billion yuan in the same period last year.

As of the end of September this year, bio-thera solutions had a balance of cash and cash equivalents of 0.26 billion yuan, a decrease of 19.94% compared to 0.325 billion yuan in the same period last year. At the end of 2021, the balance was 0.833 billion yuan.

However, reporters from the Star Daily found that since entering 2024, bio-thera solutions has significantly accelerated its product overseas authorization and has successively received payments.

In addition to the cooperation with Jiangsu Hengrui Pharmaceuticals, bio-thera solutions has reached at least three external authorizations just in 2024. This includes granting BAT1706 (bevacizumab) to Macter International Limited exclusive distribution and sales rights in the markets of Pakistan and Afghanistan, granting BAT2506 (golimumab) and BAT2606 (mepolizumab) to SteinCares exclusive distribution and sales rights in Brazil and other Latin American markets, and granting BAT2506 (golimumab) to STADA Arzneimittel AG exclusive commercialization rights in the European Union, the United Kingdom, Swiss franc, and some other European countries.

Among them, STADA has already paid an initial payment of 10 million USD to bio-thera solutions at the end of June this year, equivalent to about 71.268 million yuan. Additionally, in July this year, bio-thera solutions also received a milestone payment of 10 million USD from Hikma, approximately 71.358 million yuan, based on a cooperation reached by both parties in 2021 regarding BAT2206.

It is worth mentioning that since the second half of this year, several pharmaceutical companies besides bio-thera solutions have also taken actions to go overseas.

For example, in October, cspc pharma authorized the small molecule drug YS2302018 to astrazeneca, with a potential total transaction amount of up to 2 billion USD. In the same month, Jiangsu Hengrui Pharmaceuticals' PD-1 monoclonal antibody carrelizumab resubmitted its BLA to the FDA in the USA, in combination with apatinib for first-line treatment of hepatocellular carcinoma. In November, DiZhe Pharma’s shuwotini also submitted an NDA to the FDA for EGFR exon20ins non-small cell lung cancer (NSCLC).

Huayuan Securities pointed out that in recent years, the issue of homogenization in domestic pharmaceutical R&D has gradually emerged, competition has become increasingly fierce, coupled with survival pressures under medical insurance negotiations, more and more pharmaceutical companies are beginning to layout overseas markets. Due to high overseas pricing and broad space, domestically produced innovative drugs with true innovation value are expected to gain broad development space and substantial returns overseas.