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Zai Lab CEO discusses drug development, cancer drug Zejula's prospects

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Zai Lab CEO discusses drug development, cancer drug Zejula's prospects

➤ After launching ovarian cancer drug Zejula and brain cancer therapy device Optune in Hong Kong in 2018, Zai Lab Ltd. aims to introduce the two treatments in China by the end of 2019.

➤ The Shanghai-based company also has five in-house drug discovery programs, focusing on oncology and autoimmune diseases.

➤ China's biotech industry is still catching up with that of the U.S. but it has the potential to become the second-largest country for drug innovation.

Zai Lab Chairman and CEO Samantha Du co-founded the company in 2014. A veteran of the pharmaceutical industry, Du started her career more than 20 years ago with Pfizer Inc. in the U.S., where she led the development and launch of two global drugs.

Between 2001 and 2011, she launched Hutchison MediPharma Ltd. and founded and served as chief scientific officer at Hutchison China MediTech Ltd., a Nasdaq-listed biopharmaceutical company, where she was responsible for China-based biopharmaceutical innovation. Prior to founding Zai Lab, Du worked with Sequoia Capital China, where she was managing director of health investments.

Du spoke to S&P Global Market Intelligence recently about Zai Lab's research and development plans, as well as the market outlook for Zejula in China. The company bought the rights to develop and commercialize Zejula in Greater China from Tesaro Inc. in 2016. The drug could compete against AstraZeneca PLC's PARP inhibitor Lynparza, or olaparib. China had about 51,000 newly diagnosed ovarian cancer cases and 23,000 deaths in 2014.

The Shanghai based-company has more than 15 therapies in the pipeline, which are being tested in more than 20 clinical trials.

Below is an edited and translated transcript of the interview.

S&P Global Market Intelligence: What drugs does Zai Lab expect to release in the next two years?

SNL Image

Zai Lab CEO and Chairman Samantha Du
Source: Zai Lab

Chairman and CEO Samantha Du: We should be able to release [antibiotic] Omadacycline in 2020, and plan to release one to two treatments in 2021. We aim to file at least one to two new drug applications, and one to two clinical trial applications every year starting next year.

What does the competition landscape for PARP inhibitors look like? What is Zejula's advantage in the game?

This is actually a large cake [to share]. China has about 52,000 to 53,000 ovarian cancer cases every year, including new and relapsed patients. This figure, however, mainly covers cases documented by hospitals in China and has not yet included pharmacies. These patients also need to be on treatment for a long period of time. So I think it's a big enough [market] for the two of us [Zai Lab and AstraZeneca] to share.

Our drug also has some unique advantages. It works for patients whose cancer has spread to the brain, and the special enzyme we use also reduces interactions with other drugs, which lowers the risk of adverse effects. Patients also only need to take Zejula once per day, instead of twice.

Zai Lab expects its partners to release phase 3 data for Zejula as a first-line treatment [for ovarian cancer] in the second half.

What are Zai Lab's ongoing in-house R&D initiatives? Will you be looking at more funding?

We have five ongoing in-house drug discovery programs, and have more than 200 employees in the in-house R&D [division]. We plan to add over 100 [R&D employees] by the end of this year. Our in-house drugs focus on oncology and autoimmune diseases.

We do not have any new fund raising plans for now. We have $430 million of cash and cash equivalent on our books after the most recent round of financing. We spent less than $250 million in the five years since the company was established.

China has released several new healthcare policies in recent years; what else needs to be done?

The acceleration of drug approval, acceptance of global trial data and [changes to the] national drug reimbursement system [are very helpful]. In the future, however, I hope China can relax regulations on commercial insurance. Also, the drug approval process is still lengthy, which does not give drugmakers much time with patent protection after a drug is approved. So I hope regulators can consider extending the patent protection period - by at least half the time spent on gaining regulatory approval.

What is the outlook for China's biotech industry?

I think this is a promising industry over the next 10 years, though there will be some bumps. China is about 30 to 40 years at least behind the U.S. in this industry, but has huge unmet medical needs given the huge population and aging of the population. With capital investment, more talent moving to China and supportive polices, I think it is possible that China could become the second-largest country for drug innovation in about 15 years.