China’s pharmaceutical industry bets big on small nucleic acid drugs in 2024

 

Nucleic acid drugs have emerged as a rapidly growing sector in recent years. However, following the Covid-19 pandemic, the messenger ribonucleic acid (mRNA) drug market, initially buoyed by mRNA vaccines, has quickly shrunk. Companies like Stemirna Therapeutics have faced lawsuits or layoffs, leading to a shift in investment focus toward small nucleic acid therapies.

According to data from NewCore, in 2023, there were 20 funding events for small nucleic acid drugs, including small interfering RNA (siRNA) and antisense oligonucleotides (ASO), which have proven to be effective.

Notably, Novartis introduced its inclisiran sodium injection to the Chinese market following approval from the National Medical Products Administration (NMPA) in August 2023. Inclisiran sodium is a siRNA lipid-lowering drug, which the company reports administering to over 200 new patients daily.

Toward the end of 2023, leading companies like Sanegene Bio, Ribo Life Science, and Argo Biopharma completed significant business transactions, with the highest potential deal exceeding USD 4 billion. This has heightened expectations within China’s pharmaceutical industry for small nucleic acid drugs to become the next major breakthrough in 2024.

Who will seize the opportunity?

The year-end of 2023 saw a surge in attention toward small nucleic acid drugs in China. This was mainly due to large-scale collaborations between companies like Ribo Life Science, Argo Biopharma, and multinational corporations, highlighting opportunities for Chinese pharmaceutical companies.

Historically, the development trajectory of small nucleic acid drugs globally mirrors that of antibody-drug-conjugates (ADCs), which Chinese companies unexpectedly capitalized on. Initially backed heavily by MNCs, these drugs faced setbacks due to technical barriers and trial failures. However, the emergence of groundbreaking products reignited industry interest, positioning Chinese companies as strong contenders.

Small nucleic acid drugs, typically composed of single- or double-stranded DNA or RNA with a few dozen base pairs, act on mRNA within cells to regulate protein expression for therapeutic purposes. Initially, overseas companies targeted tumors, but due to immature delivery and chemical modification techniques, these drugs struggled to reach disease sites effectively, resulting in poor clinical outcomes. Subsequently, research shifted toward treating rare diseases with clear genetic causes, allowing for low-risk clinical advancement and rapid target validation.

This shift explains why the 12 currently marketed small nucleic acid drugs (excluding discontinued products, including seven ASO drugs and five siRNA drugs) mainly target rare diseases.

In China, the most well-known example is nusinersen sodium, a treatment for spinal muscular atrophy (SMA). Its price was reduced from RMB 700,000 (USD 96,285) to RMB 30,000 (USD 4,125) per injection and was included in the national insurance list. In 2023, its global sales reached USD 1.7 billion, making it the best-selling small nucleic acid drug to date.

With the advent and maturation of chemical modification and hepatic n-acetylgalactosamine (GalNAc) delivery systems, research gradually expanded to chronic diseases related to cardiovascular and metabolic disorders, the central nervous system (CNS), and ophthalmology. A prime example is inclisiran sodium, which was first approved in 2020 and saw a 217% increase in global sales to USD 355 million in 2023. After being approved in China last August, its sales in the self-pay market have already met Novartis’ expectations for its inclusion in the national insurance list.

Global MNCs are accelerating their efforts accordingly. For instance, GlaxoSmithKline (GSK) recently announced the acquisition of US-based biotech company Elsie Biotechnologies to advance small nucleic acid drug development. Additionally, according to 36Kr’s sources, before partnering with Argo Biopharma, Novartis was involved in significant business negotiations with an overseas biotechnology company specializing in small nucleic acids, but lost out to another MNC. This prompted Novartis to accelerate its search for other partners, identifying Argo Biopharma as a relatively advanced company with existing data.

Despite renewed interest from MNCs, the survival prospects for small nucleic acid drug companies in the current market are less optimistic than anticipated. Xu Yao, a pharmaceutical-focused financial advisor involved in a recent transaction concerning a small nucleic acid project, noted that the uncertainty surrounding innovative drugs is impacting investment in the small nucleic acid sector, with fewer investors showing interest in biotech. Under such uncertainty, companies that have already secured financing or conducted large-scale business transactions, maintain a stable cash flow, or advanced their products to clinical stages, have a better chance of surviving.

In terms of development, over 40 traditional pharmaceutical companies and biotech firms in China are advancing R&D in small nucleic acid drugs. Established companies like Hengrui Pharmaceuticals and CSPC Pharmaceutical Group aim to leverage the trend for transformation, while firms such as BrightGene Bio-Medical Technology and Sano Pharmaceuticals focus on further development of nucleic acid drugs. Additionally, emerging companies such as ExoRNA Bio and Rona Therapeutics, founded around 2021, represent new forces in the field.

Standing out amid fierce competition

The renewed interest from MNCs has sparked enthusiasm for small nucleic acid drug development. However, this revival is primarily driven by breakthroughs in delivery technology.

Delivering small nucleic acids in the human body involves several steps: circulating within the body, targeting specific organs, cell uptake, endosomal escape, and binding to target mRNAs. Small nucleic acids are inherently unstable and need to act within the cytoplasm or nucleus, posing challenges in delivery efficiency. Chemical modifications can enhance stability, while biological conjugation, delivery systems, or localized injections can address the latter issue, making delivery technology critical for the success of small nucleic acids.

GalNAc conjugation technology marked a significant milestone in solving the main problem with delivery. Currently, all five marketed siRNA drugs worldwide, except for the early approved Onpattro for TTR using lipid nanoparticle (LNP) delivery, use GalNAc. This is because GalNAc, when administered subcutaneously, achieves better drug distribution and extended circulation times. For example, inclisiran sodium’s primary selling point over monoclonal antibodies is its biannual injection schedule, making it highly attractive for chronic disease management. Additionally, the high targeting efficiency reduces drug doses and side effects, enhancing safety and tolerance.

In this context, establishing GalNAc-based technology platforms has become crucial for pharmaceutical companies to overcome small nucleic acid drug challenges. Alnylam Pharmaceuticals has laid out a scope for GalNAc delivery technology that covers various aspects but lacks a fundamental patent that could block others, preventing a monopoly situation. In China, companies like Sano Pharmaceuticals, Ribo Life Science, and Argo Biopharma have announced innovations in GalNAc delivery technology, possessing independent IP rights for their platforms.

However, the GalNAc-modified small nucleic acids can only function within liver cells, limiting their application and market potential. Economically, the cost of synthesizing these molecules, though cheaper than before, remains high. Therefore, developing delivery systems targeting extrahepatic organs has become a consensus among global small nucleic acid players.

The core issue is finding GalNAc-like or new ligands for conjugation modifications, such as o-hexadecyl (C16) modified siRNA for CNS, eye, or lung delivery. Alnylam has already established a discovery platform for extrahepatic ligands, exploring C16 for CNS delivery.

Shi Ming, a founder of a startup developing small nucleic acid drugs, said that global companies are essentially on the same starting line in this aspect, with even the leading overseas firms still in the early stages of research, uncertain about validation. He added that, from a mechanistic perspective, finding a system as specific and efficient as GalNAc in other fields is challenging, and this is a biological issue. Therefore, designing delivery systems and solving problems at different stages of extrahepatic delivery, such as endocytosis, cell entry, and protein binding, becomes crucial.

Moreover, considering that delivery is a major challenge, several other issues need focus: future delivery might not just target the liver, kidneys, or CNS but also sub-organ and more precise cells. For instance, besides liver parenchymal cells (GalNAc’s main application), there are no effective solutions for other cells, such as liver tumor cells. Questions remain about the universality of delivery technologies other than the versatile GalNAc, as different delivery methods might be required depending on the target or indication.

Additionally, translating new targets into final drugs inevitably involves conversion issues. Small nucleic acid molecules’ conversion and process development lack the extensive experience found in small molecules or antibodies within both academia and industry.

Xu Yao emphasized the importance of finding the right people for the job, highlighting that Alnylam had several hundred people in its chemistry, manufacturing, and controls (CMC) team and still used external contract development and manufacturing organizations (CDMOs) for TTR indications, which took a long time. Early clinical trials might be more common, but later-stage experience, like product control, ensuring synthesis stability, and quality control, are critical, with no academic papers to reference. Hiring experienced personnel, especially from overseas, is essential, but there are few experts overall.

However, some industry insiders believe that the focus on achieving GalNAc-like efficiency might be overemphasized. From a market perspective, breakthroughs in small nucleic acid drugs may not solely rely on novel advancements in scientific logic. Localized delivery methods, such as intrathecal administration for the nervous system, can also yield effective treatments.

Speed, stability, and execution are key factors

Suppose every company globally were starting from the same point, how should China’s pharmaceutical players assess their competitiveness?

Speed, stability, and execution are crucial factors, according to Shi Ming. According to him, Chinese companies may claim unique delivery systems like polymer nanoparticles (PNP) or nervous system delivery, most still use GalNAc. With clear drug targets and delivery systems, doing things faster might be more key to capturing the market than seeking differentiation solely for the sake of it.

Another important aspect is choosing the right indications. According to Shi Ming, prioritizing drug development for rare diseases isn’t well-suited to domestic conditions—his company attempted to innovate in this area, but couldn’t secure enough interest in collaborations or funding from traditional pharmaceutical companies.

Shi Ming added that these major players are more likely to pursue projects with potential for significant transactions or larger market shares in cardiovascular, metabolic, or chronic inflammatory diseases in China. Once validated, domestic companies quickly follow suit. Small nucleic acid drugs’ relatively strong drug-forming characteristics mean they could find a market domestically even without selling overseas.

Xu Yao shares a similar view. Different regulatory bodies have varied experience and special review requirements for newer drug forms like small nucleic acids. For instance, in China, even for highly fatal conditions like amyotrophic lateral sclerosis (ALS), it’s challenging to relax safety standards. The US Food and Drug Administration (FDA) might be more open, but crafting clinical strategies to smoothly advance product development still requires careful consideration.

Insisting on original innovation is also a firm choice for some small nucleic acid companies. This includes technological platform and mechanism innovations and long-term perspectives on indications: the “In China for Global” logic still holds. For instance, Ractigen Therapeutics’ pipeline covers single-gene genetic diseases, tumors, and ophthalmology. Technologically, the company has established the “Smart-TTC” small nucleic acid drug discovery and development platform and “Smart Chemistry-Aided Delivery” (SCAD), an intelligent chemical delivery system, both with independent IP rights, targeting extrahepatic tissue delivery.

Meanwhile, external collaborations are becoming a key focus for startups. “As long as there is cash flow and future clinical resources, we’re willing to cooperate,” Shi Ming said.

In this process, MNCs are not the only targets—large pharmaceutical companies in China are also key, though challenging. Shi Ming and others noted that once a direction is determined, established companies tend to believe they can handle it themselves. Additionally, large companies prefer focusing on the Chinese market, meaning they are reluctant to take on the development risks for small indications like rare diseases.

“They tend to be conservative and concerned about the toxicity and side effects of entirely new delivery systems. Therefore, they prefer products with complete trials and immediate Center for Drug Evaluation (CDE) approval data. Collaborating with domestic pharmaceutical companies remains challenging.”

Mapping the pharmaceutical industry in China:

• Ribo Life Science: Founded in 2007, focusing on RNA interference (RNAi) drugs, Ribo is a major pioneer in China’s pharmaceutical industry. The company has established an independent, fully integrated R&D platform for small nucleic acid drugs, supporting the entire lifecycle from early research to commercialization. It currently has eight clinical products targeting cardiovascular and metabolic diseases, liver diseases, and ophthalmic diseases. In May 2024, Ribo’s siRNA drug targeting FXI (RBD4059), received European Medicines Agency (EMA) approval for phase 2 clinical trials. In April, its siRNA drug for hepatitis D virus (RBD1016) received the same approval.
• Visirna Therapeutics: Established in 2022, Visirna has formed a strategic partnership with Nasdaq-listed small nucleic acid drug company Arrowhead Pharmaceuticals. Its product pipeline includes three siRNA drugs in clinical development for cardiovascular and metabolic diseases. In April 2024, Visirna completed the first patient dosing in a phase 2 clinical trial for VSA006, its siRNA drug for non-alcoholic steatohepatitis (NASH) in China.
• Argo Biopharma: Founded in 2021, Argo focuses on developing next-generation siRNA drugs. Since its inception, it has raised over RMB 700 million (USD 96.2 million) in financing and established a pipeline of multiple siRNA candidates targeting cardiovascular diseases, rare diseases, hepatitis B, autoimmune, and neurological diseases. In January 2024, Argo Biopharma signed a USD 4.165 billion collaboration agreement with Novartis to develop multiple cardiovascular siRNA drugs. Argo Biopharma currently has five siRNA drugs in clinical trials, covering cardiovascular diseases, rare diseases, and viral infections.
• Hengrui Pharmaceuticals: The company started phase 1 clinical trials for its small nucleic acid drug HRS-5635 targeting chronic hepatitis B in 2023. In May 2024, Hengrui announced plans to initiate phase 2 clinical trials to evaluate the efficacy and safety of HRS-5635 injection alone or in combination with other drugs for treating chronic hepatitis B.
• Synerk: Founded in 2018, Synerk specializes in RNA-targeted therapies. Its founding team has extensive experience in successful siRNA drug development and has established proprietary hepatic and extrahepatic delivery platforms and chemical modification technology platforms. Synerk’s most advanced pipeline has entered phase 1 clinical trials, with dozens of participants enrolled and dosed. The company expects to have multiple pipelines, including CNS indications, in clinical trials by the end of 2025.
• CSPC Pharmaceutical Group: The group’s mRNA Covid-19 vaccine was the first independently developed and authorized for emergency use in China. In June 2024, CSPC’s mRNA-LNP-based CAR-T cell injection (SYS6020) was approved for clinical trials for multiple myeloma.
• Chia Tai Tianqing Pharmaceutical Group: In April 2024, Chia Tai Tianqing’s siRNA drug TQA3038 for chronic hepatitis B completed phase 1 clinical trials.
• Junshi Biosciences: In April 2023, Junshi’s siRNA drug ANGPTL3 for hyperlipidemia entered phase 1 clinical trials. In April 2024, the company’s self-developed PCSK9 monoclonal antibody was accepted by China’s NMPA for treating primary hypercholesterolemia and mixed dyslipidemia.
• Sano Pharmaceuticals: Founded in 2007 and focused on RNA therapy development, Sano’s pipeline targets tumors, fibrotic diseases, viral diseases, and cardiovascular metabolic diseases. The company has four drugs in clinical stages, with STP705 for squamous cell carcinoma and basal cell carcinoma set to enter phase 3 clinical trials and STP707 for multiple solid tumors in phase 1 clinical trials.
• Sanegene Bio: Founded in 2021, Sanegene specializes in developing small nucleic acid drugs based on RNAi technology. It has established proprietary tech platforms for chemical modification and liver and extrahepatic delivery. Its pipeline covers cardiovascular and metabolic diseases, immune-mediated diseases, and neurological diseases. In December 2023, Sanegene announced it raised over USD 80 million in Series A+ funding. In June 2024, its RNAi drug SGB-9768, which targets the complement component 3 (C3) protein, received clinical trial approval. Another siRNA hypertension treatment drug, SGB-3908, developed in collaboration with Innovent Biologics, received clinical trial approval in May.
• Rona Therapeutics: Established in 2021, Rona aims to develop innovative nucleic acid drugs with its proprietary “Razor” platform. Using its unique delivery platform, the company’s nucleic acid drugs are developed in a modular and programmable manner, primarily targeting metabolic, CNS, ophthalmic, and oncology diseases. In December 2023, Rona’s first self-developed PCSK9 siRNA drug RN0191 was approved for clinical trials to treat hypercholesterolemia, mixed hyperlipidemia, and atherosclerotic cardiovascular diseases.