Member Info for Alquemie

Never say never, but I can't think of an industry buyer that might view the locations and modest capacity of their sites as collectively attractive. The JTrain concept is untested and makes for a difficult valuation. However, I can imagine interest in acquiring individual sites, from either industry or as additions to private equity portfolios.

As an aside, Lonza just announced a multi-billion CHF two product deal (with an option on two more) for an undisclosed US pharma, with manufacturing at one of their US sites. CDMO selection comes down to history, capacity and confidence in security of supply, cash flow impact of secondary importance.

You're welcome (and apologies to the board for the off-topic posts).

I'm still struggling with the meaningful benefit of licensing over a traditional service model. Biosimilar interchangeability issues are set to disappear so no advantage in an ex-US manufacturer setting up a dedicated facility in the US. Inflation Reduction Act is reducing originator product prices, further impacting biosimilar margins. CDMO competition increasing from Korea and India (Samsung Biologics moving towards 1.32m litre capacity).Sandoz has ploughed cash into a state of the art Slovenian facility which will support opportunities arising from future patent expiries, with two further developments planned.

Licensing may benefit cash flow and enhance investment prospects for mid-caps looking to launch novel high margin products, but it does not reduce inherent risk to timeline (deployment complexity, integration work, and execution) or vulnerability to logistics issues (consumables, single use reactor supply, for example). Given the reduction in headcount, just how many contracts might Evotec realistically support? As for D&PD, can't see this recovering in the face of competition from myriad AI-focused companies and Chinese R&D productivity.

Bothwell, in all seriousness- get help.

@kendall. ONly general remarks, and with the caveat that it's been a while since I've looked at turn-key biologics in any detail, and that being confined to Mab and mRNA production.

Immediate question is- who are the target clients? First thought is that, given setup timeline and costs. not much use to the majors other than perhaps supporting launch into second tier markets, or as a safety shot where there is uncertainty around demand. That said, could be a solution to bottlenecks arising from opportunistic in-licensing or late-stage clinical asset acquisition. The Biosecure Act could take ex-US CDMO capacity off the board (Wuxi for example).

Likely too spendy and lacking flexibility for most mid-caps compared with a well-negotiated CDMO contract. Demonstrated utility is narrow (Mabs, biosimilars) while industry requirements are increasingly specialised (ADC, cell therapies, mRNA and peptides).

And still only a single demo site. No licensing or retrofit announcements, so jury out until that first signature is dry.

A Chinese colleague was kind enough to point me to an analysis of the NMPA's "Annual Report on the Progress of New Drug Registration Clinical Trials in China (2025)".

It confirms the somewhat surprising clinical development activity around potentially competing lidocaine-prilocaine sprays, with 20 studies registered in 2025, comprising 17% of the top ten small molecule studies. From the English translation:

"The top 10 chemical drugs have a total of 117 registered trials, accounting for 7.0% of new chemical drug clinical trials. Lidocaine and prilocaine aerosol have the most trials, with 20".

Being a next to invisible treatment modality, I can only see the attraction as being the low technical requirement and high probability of approval on demonstration of non-inferiority to Fortacin as reference product. Interesting challenge for Fosun- aggressive launch and hope for first-mover advantage, or accept that inevitable domestic competition will constrain pricing and let it drift as just another low-margin branded generic?

Chinese pharma companies are quick to pounce on patent-expired products. A quick search returns 27 registered clinical studies involving lidocaine-prilocaine aerosols sponsored by ten companies. Four are potentially within 18 months of approval. None are reliant on data contained in the Fosun submission (all use Fortacin as the active comparator).

Breaking down disclosed licensing arrangements, there are are at least five different products in development (Anhui Jiexi Pharmaceutical Co., Ltd;Beijing Zhongtaibang Pharmaceutical Technology Co., Ltd; Shanghai Shangyao Zhongxi Pharmaceutical Co., Ltd, and Jiangsu Kefeiping Pharmaceutical Co., Ltd, Zezheng Biotechnology Co., Ltd).

Of course, not all will progress in development or reach approval, but there is a high probability of at least one generic hitting the market within two years, exerting pricing pressure and reducing the RPG royalty. I would not interpret the level of competitor activity as indicative of expectation of a significant market- domestic companies will chase any opportunity.

Sales are indeed going to be...interesting...

Fosun has made no reference to market potential, only citing a realistic 2.4% PE prevalence in China in the Phase I press release (in contrast to RPG's risible 25% prevalence). Fosun itself has moved away from its focus on maimising the number of domestic approvals to being a major biopharm player. I can't see any incentive to rush out a low tech, low return, heavily promotion-dependent, easily copied product. But perhaps they can beat the 52 months it took from EMA approval to first Recordati sale...

High-res studies have established that topical first-line therapy is rarely prescribed, dapoxetine (often in combination with TCM and psychotherapy) being dominant. Sexual dysfunction drugs are excluded from both the NRDL and state health insurance: parity pricing with generic dapoxetine would place this at sub $30.

I previously offered a back of a Kit-Kat wrapper, bottom-up estimate based on Menarini China study data as applied to the 18-60 year urban population (455m), which returned a topical treatment population of c. 23,000. I've not revisited Tx-seeking but not seeing anything to radically revise this estimate.

Probably only the second time I've seen "rodomontading" appear outside of the OED- have a "recommend" on breadth of vocabulary alone.

You are being somewhat generous in giving RPG any credit for approval- even they couldn't eff up supplying a few supporting documents.

Dougie, this changes nothing with respect to the US. The FDA does not consider Chinese or other single country data in an NDA unless applicble to a US population and to US prescribing practices (there are other barriers with respect to study design, and on-site data validation).

The FDA rejected the data included in the EMA submission some 16 years ago, on the basis of not including a recognised, validated co-primary endpoint. The FDA stance has never changed.

Consider this from a partner perspective: a failed Phase II study and negative FDA opinion; a large and diverse Phase III study required to enough to both validate a novel co-primary endpoint and to establish objective and subjective efficacy; the fixed-dose combination rule; the absence of intellectual property; manufacturing know-how residing with a third party; sales history; preponderance of monograph products; no reimbursement and possibly MFM pricing.There's not a company (nor fund) in the world that will touch this.

No...I am...;)

Ah..more popular misconceptions...

Dapoxetine (as Priligy) was approved in China in 2013, generic approval since 2020, with several domestic producers. It's the most commonly prescribed first-line PE treatment (70% of patients) as monotherapy or in combination with TCM (close to 40%) and/or psychotherapy (90%. Topical therapy is almost never used.

While there is a developed PE treatment market, any topical market will need to be developed de novo (and not as though there is any brand recognition to leverage). Will be interesting to see if the NMPA approval encourages progression of the domestic topicals in development (Zezheng Biotechnology and others).

I did wonder if anyone would risk a punt based on my heads-up, and was surprised that no one could verify the notification. Public announcement, no AI assistance necessary, although I'm familiar with the source through pipeline analyses and competitive intelligence briefs.

That should have read " {NB Primacaine IS NOT prilocaine, but I'm assuming that this is a translation error]

As per the NMPA website, drug approval notifications posted June 15th:

Serial no. 192

Request no. JXHS2500041

Drug Name Lidocaine and Primacaine Aerosol {NB Primacaine IS NOT lidocaine, but I'm assuming that this is a translation error]

Applicant: Shanghai Fosun Pharmaceutical Industry Development Co., Ltd.

Approval No. National Drug Approval Number HJ20260058

Approval Date: June 10, 2026

Again, a general comment, there is certainly PE interest in CDMOs, although largely confined to those with specialist skills- ADC, radiopharma, peptides. Probability of a trade sale dictated by both skill set and locale (and shareholder base, if PE heavy and approaching end of investment cycle).

I can't comment on Evotec as we work with one of their investors. I will make two obvious points relevant to similar CDMOs: Established D&PD units will continue to come under pressure in part due to still fragile early biopharma funding, but also through the switch in big pharma D&PD strategy (look at licensing and acquisition activity for the past year), and the here to stay importance of Chinese innovation to future pipelines.

With respect to biosimilars, ignore the stated originator product market sizes and look hard at the timeline(s) to market entry and active competition. "Expiry" in no way translates into launch year and originator pushback (multi-layered IP, defensive pricing) and PBM shenanigans have profoundly constrained biosimilar penetration in the US, making the time to accrue future revenue, and its quantum, very hard to predict. Operating margins are generally in low double figures.

I had missed that the Phase III bioequivalence study (CTR20242364: Zezheng Biotechnology), where home-grown product was compared directly with Recordati-supplied Fortacin, was completed last summer. Same PI as the Plethora-sponsored study- Dr Hui has been a busy boy. NDA status unknown.

If approved, it would be a Class 3 product (domestic copy of a foreign drug) rather than a true generic, although I'm sure that Fosun would consider it competing in order to reduce the royalty on Senstend, if ever approved. Zezheng is a subsidiary of the CSPC Group, not the minnow I once took it to be.

Can two branded products make money in what is a very modest market? And (in contrast to Recordati), are Fosun and CSPC willing to put up the heavy promo essential to build a market de novo? Domestic product should offer significant cost advantages over an imported version.

@Kendall12 : My amusement arose largely from Bignose's innumeracy and spurious royalty calculation (bizarrely, since repeated) not his understandable ignorance of regulatory process or licensing agreement structure. That said, it's generally wise not to waffle on when understanding is absent, n'est-ce pas?

To repeat, there is little more futile than expecting rational explanation or contrition from the clown alley "managing" RPG, regardless of how barbed or expert that criticism might be, or in believing that "a turnaround" is possible.

I had a good chuckle at the notion that a more nuanced and informed missive than Bignose's Trumpian ramble might effect the raising of an RPG eyebrow.

The reality is that RPG, through a history of backing near worthless assets, amateur deal-making, and total absence of understanding of regulatory and market strategies has no meaningful control over its trajectory.

Forget the whining emails- get the pitchforks and flaming torches out...

Wooo...that should have them spluttering over their foie gras and Château d'Yquem (the 1811, of course).

But, by breadth of rant and degree of miscomprehension alone, up there with the best Truth Social postings.