HONG KONG – China's Luye Pharma Group Ltd. has emerged as a global biotech player by leveraging partnerships around the world, and its 24-year journey is a case study of how a Chinese company can expand, both acquire and protect intellectual property (IP) and deal with cultural challenges that come with global operations.

"We seek to maximize the resource advantage of every party in the entire industry value chain," said Sammy Jiang, Luye's vice president of strategy and business development. "Pharmaceutical development involves knowledge in medicine, chemistry, bioengineering, artificial intelligence and so forth. There is no way a company can be everything. The point now is to integrate your knowledge to make everyone a winner."

In an in-depth interview with BioWorld, Jiang outlined the company's global partnering strategy and its goals for growth.

Focused on the central nervous system, oncology, cardiovascular and metabolic conditions, Luye has partnered with companies from China, the U.S. and Europe in recent years, leveraging their technologies, platforms and networks to advance in those areas.

Jiang said the company looks for global partners in all areas of the business, ranging from innovation, R&D and manufacturing to marketing and distribution.

"The China National Drug Administration now accepts overseas clinical data to grant marketing approval to imported drugs, which can put Chinese companies under pressure. The days of protectionism are gone," Luye CEO Liu Dianbo said at a press conference last Friday announcing the company's most recent partnership.

"We reach out to multinational companies for partnerships in developed markets, and local business partners in emerging markets," said Liu.

"Innovation, cross-border integration and globalization are the inevitable trends that drugmakers must embrace in order to stand out in a competitive environment," he added.

Going global through partnerships

The Chinese firm founded in 1994 is relying on merger and acquisition deals to expand its footprint in more markets.

Last month, it inked its biggest deal ever with Anglo-Swedish pharma giant Astrazeneca plc to buy the rights of antipsychotics Seroquel (quetiapine fumarate) and Seroquel XR for $546 million. The deal comes with technologies and established sales networks in 51 countries and regions.

"This partnership with Astrazeneca laid a foundation for us to enter the emerging markets," said Liu, adding that it was the patents and technology platforms that Luye was chasing.

The strategy has helped Luye gain access to the developed markets.

In 2016, Luye gained an established platform in Europe by acquiring Swiss-based Acino Holdings AG's transdermal drug delivery systems (TDS) and implant business. Acino possessed know-how in difficult-to-make formulations and a proven R&D and product launch track record.

"We must draw experience from foreign companies on quality control, innovation, marketing and business development, in order to get our products out in the Chinese market as well as other global markets," said Liu. "We need to learn from their experience in compliance and promotion in particular."

Setting up R&D centers in China, the U.S. and Europe, Luye has been focusing on TDS with eight products under development; biological antibody technology and new compounds that could lead to more than 10 drug candidates in the early stage; long-acting and extended-release technology with 11 products in development; and liposome and targeted drug delivery with more than five products in development.

Luye targets partnerships to help it enhance its antibody development, nucleic acid therapeutics and next-generation chimeric antigen receptor T-cell (CAR T) therapy on top of those five areas.

In August 2017, Luye acquired from Shandong Bo'an Biotechnology Co. Ltd. two monoclonal antibody drugs, LY-01008 and LY-06006, and obtained a "biological antibody technology" R&D platform. LY-01008 is a biosimilar of Avastin (bevacizumab, Roche Holding AG) indicated for colorectal cancer or non-small-cell lung cancer, and LY-06006 is a biosimilar of Prolia (Denosumab, Amgen Inc.) indicated for osteoporosis among postmenopausal women. They are currently in phase III and phase I studies, respectively.

Also last year, Luye invested in U.S.-based Exicure Inc. to leverage its spherical nucleic acid technology to discover drugs for use in oncology and other areas of unmet needs.

And in the areas of novel bispecific antibodies, therapeutic antibodies for the next generation of immuno-oncology and CAR T therapy, Luye is working with three U.S.-based biotech firms, Abpro Therapeutics Corp., Excel Biopharm LLC and Elpis Biopharmaceuticals Corp.

Global vision is another key

Despite Luye's recent efforts to build global partnerships, its vision to go global started two decades ago.

Knowing innovation is the key to success, in 1998, the firm became the first in China to set up a department for protecting IP rights, a year after Liu visited the U.S. to learn how pharma giants such as Merck & Co. Inc. and Pfizer Inc. protected their patents, among other things.

Liu also said Luye has always regarded China as an international market, and given it is even the biggest now, drugmakers should not see it merely as a domestic market against the backdrop of globalization.

"We need to adopt international standards for R&D, manufacturing and quality control to compete at home and abroad," said Liu. "We need to get approvals from regulators in the U.S., Europe, Japan and China."

In charge of international business development, Jiang told BioWorld how challenging it could be for Chinese drugmakers to enter certain markets.

"There are language barriers and cultural differences in some emerging markets, such as Africa and Latin America. In particular, Brazil is the most difficult given other factors namely currency devaluation," said Jiang.

"Polices also vary in different regions and countries. For example, the EU places much emphasis on the antitrust law," she added. "We need an international team of people from a wide range of backgrounds – legal, clinical, sales, financing and so forth – for our business development."

Currently, Luye has production facilities in seven global sites and branch offices in Hong Kong, Singapore and Malaysia, in addition to its R&D centers in China, the U.S. and Europe.

Starting next year, Luye will see its drug candidates launched in different markets. Those include risperidone extended-release microspheres, LY-03004, for the treatment of schizophrenia and bipolar disorder, and rotigotine extended-release microspheres, LY-03003, indicated for Parkinson's disease. LY-03004 has reached the new drug application stage in the U.S., while LY-03003 is in phase III trials.