Within two days, the CEO and CFO of Lian Biotech (LIAN. US) left one after another.
On December 19th local time in the United States, Liantuo Biotechnology announced on its official website that its CEO, Wang Yizhe, has resigned from the company in search of other opportunities. Adam Stone, Chief Investment Officer of Perceive Advisors, a US biopharmaceutical investment fund, and a member of the Board of Directors of Liantuo Biotechnology, will serve as interim CEO.
Just one day later, Liantuo Biotech announced the resignation of its Chief Financial Officer (CFO) Yi Larson. At present, the company has appointed Ehong (Maggie) Gu, the current Vice President and Global Finance Director, as the interim Chief Financial Officer.
The senior personnel changes have raised doubts about the stability of the Liantuo Biological team from the outside world. Regarding the personnel changes and company management arrangements related to this incident, Time Finance contacted Liantuo Biotechnology, and the relevant personnel stated that they have not responded at the moment.
In the secondary market, on December 20th local time in the United States, Liantuo Biotechnology closed at $4.36 per share, with a total market value of $471 million.
Key License in Mode
Liantuo Biotechnology was established in August 2020 in Zhangjiang, Shanghai. It is an innovative pharmaceutical company specifically established and incubated by Perception Advisors, a US biopharmaceutical investment fund, to enter the Chinese market. Its aim is to promote drug research and development and accelerate the listing and circulation of disruptive drugs in major markets in China and Asia. In November 2021, Liantuo Biotechnology was listed on NASDAQ in the United States.
Wang Yizhe has been serving as the CEO of Liantuo Biotechnology since May 2021, becoming the second head of the company. Before joining Liantuo Biotechnology, Wang Yizhe had served as a senior executive at multinational pharmaceutical companies such as Bristol Myers Squibb, GlaxoSmithKline, and Eli Lilly. During the epidemic period in 2020, he served as the head of the global platform of the anti COVID-19 treatment project in Lilly Research Laboratory, helping Lilly's COVID-19 antibody drug Bamlanivimab obtain the emergency use authorization (EUA) from the US Food and Drug Administration (FDA).
License in is the most prominent label on Liantuo Biotechnology. Since its establishment, Liantuo Biotechnology has been relying on the License in model to expand its research and development pipeline. As of now, all seven of its existing research pipelines have been imported.
The License in model is a transaction model centered around drug intellectual property licensing. According to a research report by CITIC Securities, a License in is a commercial right to develop, produce, and sell products in certain countries and regions by paying a certain down payment to the product licensor, and agreeing on a certain amount of milestone payment and future sales commission. Its essence is division of labor and cooperation, that is, different enterprises layout different research and development stages, work together in funding, technology, and other aspects to achieve risk sharing and profit sharing.
However, a senior figure in the pharmaceutical industry told Time Finance, "For new drug development enterprises, the clinical development and management capabilities after the license in are very important. If the progress speed after the license in is not as fast as others or the clinical design scheme is unreasonable, leading to drug research and development failure, it is also not possible. In addition, as an innovative drug enterprise, if all pipelines are license in, its own independent research and development ability cannot be reflected."
Diversification is also one of the characteristics of Liantuo Biological's product pipeline layout, covering fields such as cardiovascular, ophthalmology, and oncology.
Wang Yizhe said in a media interview last year, "In the 14 months since taking office, it feels like I have already entered several different companies."
Prior to this personnel change, on December 1st, Liantuo Biotechnology received an acquisition proposal. Concentra Biosciences, LLC, controlled by Tang Capital Partners, LP, has proposed a non binding acquisition of 100% equity in Liantuo Biotechnology without invitation.
However, Liantuo Biotechnology rejected the acquisition offer five days later, citing that the board unanimously believed that the proposal undervalued the company's value and did not align with the best interests of Liantuo Biotechnology and its shareholders.
The business of buying low and selling high
Wang Yizhe once stated in a media interview that "Liantuo Biotech's License in is not just about buying products and developing them, but about integrating commercialization concepts throughout the entire pharmaceutical lifecycle. Only by ultimately pushing innovative drugs to the market can patients truly benefit.".
At present, there is no product launched by Liantuo Biotechnology. The drug Mavacamten, used to treat symptomatic obstructive hypertrophic cardiomyopathy (oHCM), was originally one of its closest products to commercialization.
Mavacamten was initially developed by MyoKardia, a wholly-owned subsidiary of Bristol Myers Squibb, and is the world's first cardiac specific myosin allosteric inhibitor. In August 2020, Liantuo Biotechnology secured exclusive rights to develop and commercialize this drug in Greater China, Thailand, and Singapore with a down payment of $40 million and a milestone payment of nearly $150 million.
In April 2022, Mavacamten was approved by the US FDA for marketing as a treatment for adult patients with symptomatic New York Heart Association (NYHA) grade II-III obstructive hypertrophic cardiomyopathy to improve functional ability and symptoms.
In May and June 2023, Mavacamten was approved in Macau, China and Singapore, respectively, for the treatment of symptomatic adult patients with oHCM.
On the domestic side, in April 2023, Mavacamten's new drug application (NDA) for the treatment of symptomatic adult patients with oHCM was accepted by the National Medical Products Administration (NMPA) and included in the priority review; In late that month, Liantuo Biotechnology announced that the Phase III EXPLOR-CN study using Mavacamten for the treatment of symptomatic oHCM patients in China reached its primary endpoint.
However, before Mavacamten was officially approved in China, Liantuo Biotechnology switched hands on it. In October this year, Liantuo Biology signed an agreement with Bristol Myers Squibb, granting Bristol Myers Squibb Mavacamten the exclusive right to develop and commercialize in Chinese Mainland and other markets, and at the same time, terminating the exclusive license agreement signed by Liantuo Biology with MyoKardia before.
This transaction involves a one-time payment of $350 million and a remaining milestone payment of up to $127.5 million. In addition, Bristol Myers Squibb is expected to provide employment opportunities for certain Liantuo Biotech personnel engaged in the development and commercialization of Mavacamten.
The practice of buying low and selling high to earn the price difference is also happening in the cooperation between Liantuo Biotechnology and Pfizer.
In December 2022, Pfizer obtained the right to develop and commercialize Sisunatovir, a candidate drug for the treatment of respiratory syncytial virus (RSV), in Chinese Mainland, Hong Kong, Macao and Singapore from Liantuo Biology.
Sisunatovir was originally a product of ReViral company. In June 2022, Pfizer completed the acquisition of ReViral and the company's RSV treatment candidate product portfolio, but this acquisition does not include Sisunatovir's development and commercialization rights in Chinese Mainland, Hong Kong, Macao and Singapore. This license was previously granted by ReViral to Liantuo Biology in March 2021.
In this transaction, Pfizer will refund the $20 million down payment previously made by Liantuo Biotech. At the same time, Liantuo Biotechnology is also eligible to receive potential development and commercial milestone payments of up to $135 million, as well as a tiered sales share that accounts for a low single digit proportion of the drug's net sales in the licensed region.
In the existing pipeline, the drug TP-03 (0.25% Lotilana Eye Drops) used for the treatment of demodex blepharitis is progressing rapidly. Its original research manufacturer is Tarsus. In March 2021, Liantuo Biology cooperated with Tarsus and obtained the development and commercialization authorization of TP-03 in Greater China. In October this year, Liantuo Biotechnology released the top line data of the LIBRA3 phase study on TP-03 treatment of Chinese patients with demodex blepharitis.
In addition, the targeted drug Infigratinib (BGJ398) for cholangiocarcinoma has entered clinical phase 3 in terms of indications for first-line and second-line cholangiocarcinoma.
According to financial report data, as of the end of the third quarter of this year, Liantuo Biotechnology had a net loss of $69.7 million for the year, compared to a net loss of $92 million for the same period last year. In terms of cash flow, as of the end of the third quarter of this year, its total cash, cash equivalents, securities, and restricted cash amounted to 252.2 million US dollars.