With the official approval of Keji Pharmaceutical-B (02171)'s CAR-T therapy Zewokie Orense Injection (Sekaize) on March 1 of this year, the number of CAR-T treatments marketed worldwide has also reached 11. Although some of these products compete with each other in terms of treatment of indications, the rapid growth in sales of leading products is still driving the rapid expansion of the global market.
The Zhitong Finance App learned that the global CAR-T cell therapy market is expected to reach US$88.52 billion in 2032. The 100 billion dollar market is in sight, and it continues to boost the market's investment confidence. However, not every product can reap the dividends of overall market expansion.
At the same time as the global market space is growing, market competition for each product is also intensifying. With the release of the 2023 financial reports of major pharmaceutical companies, the market discovered that the global CAR-T market sales are diverging. In overseas markets, Carvykti, the legendary creature (LEGN.US) currently popular in the market, reached 500 million US dollars in sales last year, a sharp increase of 273% over the previous year; however, Novartis (NVS.US) Kymriah became the only Car-T product with declining revenue in overseas markets in 2023.
At home, there are currently 5 CAR-T products competing on the same platform. In November of last year, Heyuan Biotech's Naciorense was approved for listing. Its price of 999,000 yuan broke the previous price threshold of more than one million for CAR-T therapy. This triggered discussions in the market about the price reduction of CAR-T therapy, and also invisibly reduced the market space for latecomers.
For example, Keji Pharmaceuticals' Saikaiser was priced at 1.15 million yuan after launch. Although it was Keji Pharmaceuticals' first commercial product, the response from the secondary market was mediocre. The Zhitong Finance App observed that on March 1, Keji Pharmaceutical's stock price soared and then quickly fell, and finally closed down slightly by 0.6%. Since then, it remained in a sideways state until April 15, when the company's stock price fell sharply by 16.78%. In other words, in a month and a half after the product was approved for sale, the cumulative decline in Keji Pharmaceutical's stock price reached 28.53%.
Looking at global CAR-T market differentiation from financial reports
According to statistics from the Zhitong Finance App, 7 of the 11 currently marketed CAR-T therapies have disclosed sales results for 2023. In overseas markets, all 6 products have disclosed their performance, with cumulative sales reaching US$3.714 billion, an increase of 37.61% over the previous year. In the domestic market, Pharmaceutical Junuo's Yikaida performed as well as most CAR-Ts in the global market, and achieved double-digit growth. The last three products are all newly launched in 2023/2024. They have not yet completed the full sales year, but they also showed the vitality of the domestic CAR-T market from the side.
From the growth rate performance of mature overseas commercial market products, it is easy to see that the global CAR-T market is diverging.
Among them, the legendary Biology/Johnson & Johnson Carvykti has undoubtedly become the biggest dark horse in the global CAR-T market with a year-on-year growth rate of 273%. In terms of performance, in the fourth quarter of 2023, Carvykti's sales were about US$159 million, a significant increase of 194% over the previous year. Total sales for the year reached 500 million US dollars, an increase of 276% over the previous year. The market expects Carvykti's sales to exceed $1 billion next year.
Compared to Legendary Creature's dark horse performance, although the two companies' products, BMS (BMY.YS) and Gilead (GILD.US), are not growing as fast as their performance, their main focus is winning by quantity. Among them, BMS's two Car-T treatments, Abecma and Breyanzi, had total sales of US$836 million last year. Among them, Abecma was US$472 million, up 22% year on year; Breyanzi's sales reached 364 million US dollars, up 100% year on year. This sales growth rate was second only to Carvykti among all Car-T products. On the Gilead side, the two products brought total sales of US$1,869 million, of which YesCarta became the world's leading car-t sales with sales of US$1,498 billion.
With the above 5 products, Novartis's Kymriah can be described as “waking up early in the morning and catching up for the evening.” As the world's first approved CAR-T therapy, Kymriah's lack of competition in terms of expansion of indications and preparation processes is one reason why its market is shrinking. The Zhitong Finance App learned that compared to the success of Gilead and BMS competitors in second-line treatment of aggressive B-cell non-Hodgkin lymphoma, Novartis announced Kymriah's failure in related clinical trials in 2021, which directly led to the continued decline in Kymriah's performance after 2022. On the other hand, in terms of preparation cycles, Kymriah takes 3-4 weeks, while Gilead's Yescarta only takes 2-3 weeks. This is also one reason why Kymriah's market expansion is limited.
It is easy to see that as competition among major products becomes more intense, the global CAR-T market is gradually becoming more divided, and the subsequent trend of each product may be related to the speed of expansion of its indications and the speed at which it is registered and marketed overseas.
Take Carvykti as an example. Currently, Carvykti is submitting a domestic listing application and has been included in priority review; in addition, Carvykti's application for indication expansion in Europe has received positive opinions from the regulatory authorities. At the R&D level, Carvykti currently has 6 phase 2/3 clinical studies in progress for different patient groups and frontline treatments. In contrast, in December of last year, BMS's application for marketing of Abecma's new indications was suspended by the FDA; Novartis received a letter from the FDA indicating that there was a major gap between the production process of Kymriah, the CAR-T product at its factory and cGMP requirements.
From this perspective, as the current hit in the CAR-T market, Carvykti's potential is probably due to its rapid expansion of indications and the speed of global implementation.
Domestic companies' internal affairs before they “go global”
Compared to competition among the world's largest single products through the expansion of indications and the speed of global implementation, competition for domestic CAR-T products is more biased towards “grounded” competition for efficacy and pricing. Although only 5 domestic products are currently on the market, internal trends seem to have emerged.
Compared to overseas markets, the domestic CAR-T market clearly requires continuous market education. With the end of the earnings season, the market found that the sales growth rate of domestic CAR-T products was still below the international quality average. Take Benoda as an example. The 2023 performance growth rate was less than 20%. The number of prescriptions for the whole year was 184, and 168 cases were returned. There is a big gap between this performance and the global brands mentioned above.
The main problem behind this is that, unlike other innovative drugs, traditional autologous CAR-T products are expensive, mainly due to the fact that they require personalized preparation, expensive materials such as imported carriers, and the preparation amount of products is too small to form a scale effect.
According to an article by Tao Ran in the International Journal of Cancer, the production material cost for each dose of CAR-T is about 43,000 US dollars. Of these, lentiviral vectors used for CAR-T transduction and magnetic beads used in the cell sorting process account for the majority of production.
The reason why domestic CAR-T costs are higher is, on the one hand, that high-value consumables such as lentivirus and magnetic beads used in the production process can only be imported in the early stages; on the other hand, because the domestic market still needs market education and market development, manufacturers have to separately bear higher depreciation and amortization costs (which can be reduced by treating more patients in the later stages), and traditional self-produced CAR-T products themselves cannot be diluted by treating more patients, so the cost remains high.
High prices and high costs are clearly the main factors inhibiting the expansion of the domestic CAR-T market. In order to solve this problem, different pharmaceutical companies are choosing different paths. Among them, Heyuan Biotech chose to lower the price and reduce the product to less than one million yuan, but the price of 999,000 yuan is still far higher than the medical insurance boundary of 200,000 to 300,000 yuan; while Fosun Kate is exploring the “pay-per-efficacy” method: after treatment with achiluncaine, eligible patients will receive a refund of up to 600,000 yuan if they fail to achieve complete remission (CR) after being treated with achiluncaine. In addition to this, commercial medical insurance is also an important direction for domestic companies to broaden commercialization paths.
In fact, if you explore commercial medical insurance options, overseas markets may be a good development direction for domestic companies. According to Johnson & Johnson, most commercial health insurance companies are fully involved in the payment of Carvykti treatments.
In other words, in overseas markets with better payment environments, domestic companies can expect to gain more market share with the excellent efficacy and safety of their products. Take Keji Pharmaceutical's recently approved Zewokie Orense as an example. The approval was based on an open-label, single-arm, multi-center phase I/II clinical trial (LUMMICAR STUDY 1, NCT03975907) conducted in China. Clinical results showed that 102 patients had a median follow-up time of 9 months, an ORR of 92.2%, a very good partial remission (VGPR) and above remission ratio of 85.3%, and a complete remission rate (Cr/SCR) ratio of 45.1%.
Furthermore, the drug has received the title of advanced regenerative medicine therapy and orphan drug from the US FDA, as well as the European Medicines Agency's priority drug and orphan drug product title, and has capital based in overseas markets.
Referring to the PD-1 market, in the future, as more new products enter the clinical trial stage and gradually go on the market, as well as the opening up of various payment access methods such as medical insurance, commercial insurance, and welfare insurance, domestic CAR-T product prices are expected to gradually decline, and accessibility will also increase. However, market competition will also become increasingly heated. At that time, it may be a good choice for domestic companies to continuously increase their penetration rate in the domestic market while actively going overseas.