The strained Sino-American relationship and China’s harsh drug price cuts have dampened interest in biotechs with Chinese ties. But Sanofi veteran Joanne Jiang, Ph.D., still hopes her new company, with a unique business proposition to tackle China’s metabolic disease market, will attract U.S. investors in a New York IPO planned for June 2024.
The company Jiang founded, called LeaderMed, is negotiating a $100 million private financing round on top of the $80 million it has raised so far, Jiang said in an interview. The money will help fund two Asian phase 3 trials of LeaderMed’s lead drug candidate, a GLP-1 and glucagon receptor dual agonist coded LM-008 that it in-licensed from Opko Health for obesity and weight loss.
LeaderMed is also nearing an in-licensing deal for a newly FDA-approved medical device for fat burning from a U.S. company, Jiang noted.
Many companies have adopted an in-licensing business model to bring drugs by Western biotechs into China. Some notable names include Nasdaq-listed Zai Lab, Everest Medicines and New Jersey-headquartered LianBio, among others.
But Jiang argued that LeaderMed is different in that it’s focused on metabolic diseases and China’s cash-pay market instead of the price cut prone government insurance-covered system. It also aims to leverage China’s clinical data and harmonized real-world data to help accelerate development for its partners.
A unique weight reduction market in Asia
With LM-008, LeaderMed has a compound that’s come off a positive phase 2 trial in Type 2 diabetes and obesity conducted in the U.S. But Jiang’s team figured the drug’s ability to reduce body weight, cholesterol and triglyceride has even more potential in Asia.
The obesity and overweight market in Asia has about 300 million patients, but there’s a large population that isn’t really obese but are looking for weight reduction for aesthetic purposes, Jiang noted. So for the drug’s phase 3 program, LeaderMed is running two studies: one for overweight or obese patients by Asian standards, and the other one for those with a body mass index between 18kg/m2 and 24kg/m2, who are typically considered healthy.
If everything goes to plan, LeaderMed expects to launch LM-008 in China in 2025.
LM-008’s biggest foreseeable competition would be Novo Nordisk’s Wegovy (semaglutide). The star GLP-1 med recently completed a phase 3 that could support a China application in adults who are obese or overweight, according to local pharma data service provider PharmCube. Mirroring its global trial, Wegovy’s China study enrolled patients with a BMI of at least 27kg/m2.
LeaderMed found that LM-008’s cholesterol and triglyceride reduction in its phase 2 trial was four times as much as what Wegovy reported in its phase 3, Jiang said.
There’s also Eli Lilly’s newly FDA-approved Mounjaro. But Jiang described the drug as an “overkill” for Asian population. In the phase 3 trial that got Mounjaro its FDA nod, patients had an average body weight of 104.8 kg and an average BMI of 38kg/m2. The average Asian obese or overweight population is much lighter, Jiang noted.
In Mounjaro’s Asia phase 3, Jiang noted that LeaderMed got feedback from many investigators. “It’s not unblinded, but they know that when patients are under the [Lilly] drug, they are becoming a paper person, like they lost so much weight [and] they complain that they’re not functioning well for work or for study.” LeaderMed believes its trial design and LM-008’s profile could really be the right fit in Asia for a much bigger market than just people who are obese.
And Jiang already has a few thoughts about commercialization. In China, innovative drugs are all lining up for the country’s national reimbursement drug list, offering deep discounts in exchange for wider coverage. But at least for LM-008’s weight reduction indication, LeaderMed will “definitely go with self-pay,” Jiang said.
Jiang is watching digital care very closely, citing data that online prescriptions in China have surged during COVID and now account for nearly 10% of the country’s total drug sales. “Young people, rather than going to hospital to see a doctor for their desire to look more fit, they just go online, talk to an online pharmacy to get the prescription,” Jiang said.
By targeting online promotion and China’s wealthiest population—at about 25%—who are willing to pay out of pocket for aesthetic needs, LeaderMed needs only a small sales team, and the strategy would ensure a higher profit margin, Jiang argued.
More than just in-licensing
But what does LeaderMed bring to its partnership with Opko? Data as steppingstones for faster clinical development in the U.S. and other parts of the world, Jiang said.
If Opko wanted to pursue a diabetes indication in the U.S., it’d need to conduct five different studies, each around 2,000 patients, testing LM-008 on top of other existing diabetes drugs. It would be a large, $300 million, probably six-year program, which is only possible for large pharmas like Lilly and Novo, Jiang said. The LeaderMed chief had previously held leadership roles with Sanofi and was involved in the clinical development and regulatory approvals of Lantus in different parts of the world.
Instead, diabetic kidney disease (DKD) is a more manageable indication to study LM-008 in, and, according to Jiang, the drug has a high probability of success there. But Opko can’t jump directly to DKD. That’s where LeaderMed comes in.
Following the FDA’s and EMA's guidelines, LeaderMed will collaborate with hospitals in South Korea, Singapore and China to collect large sets of real-world patient data before, during and after LM-008’s Asian trial, hoping to show an improvement in patients’ kidney function over time. Despite FDA’s guidelines on real-world data design in clinical trials, such data have been hard to come by in the U.S. and Europe mainly because of their fragmented data systems, Jiang said.
“I think it is groundbreaking that through the LeaderMed platform, we definitely can provide a lot of the real-world data from Asia sites, especially in China, [because] they have a more integrated software data collection at the hospital level,” Jiang said.
Armed with the real-world data from Asia, Opko can decide on the exact patient population it wants to pursue for LM-008 in the U.S. and ask the FDA for a DKD trial, which would be much smaller than a diabetes study, Jiang explained.
Paving the way for a potential future launch of LM-008, LeaderMed is nearing a deal to in-license an FDA-cleared class II fat burner medical device from a U.S. company, Jiang told Fierce Biotech. LeaderMed could get the machine cleared in China in three to six months, and, by the time LM-008 arrives—potentially in 2025—doctors will already be very familiar with the LeaderMed brand, she added.
While LeaderMed has an Asia focus, the company has its global headquarters in New York and is targeting a U.S. IPO in June 2024. The goal is to raise $250 million for a $1 billion valuation so that the company can expand its platform, Jiang said.
“All our senior executives are U.S. citizens, we’re all trained and educated in the U.S., so we really would like to work with U.S. investors and capital market here,” Jiang said. “This is home for us.”