Yifan Pharmaceutical (002019.SZ) has chosen to make a move in the niche market of brain metastasis in small cell lung cancer.

Today, Yifan Pharmaceutical Co., Ltd. issued an announcement stating that Yifan Pharmaceutics Co., Ltd., its wholly-owned subsidiary, has signed an agreement with Accendatech Pharmaceutical and Tianjin Accendatech. The parties plan to introduce Class 1 innovative drug ACT001 via a RMB 100 million upfront payment plus tiered sales royalties, securing exclusive rights to develop, produce and commercialize the drug for brain metastasis of small cell lung cancer in Chinese mainland and multiple other regions. Part of the cooperation payment will be specially allocated for Phase III clinical trials of the drug in China.

According to the announcement, Yifan Pharmaceutics has obtained core rights covering 13 countries and regions, including mainland China, Hong Kong, Macau, Taiwan, South Korea, and Southeast Asia. The cooperation focuses on the clinically urgent need for small cell lung cancer brain metastases. Regarding payment terms, Yifan Pharmaceutics will first pay an initial payment of RMB 100 million, followed by a choice of a RMB 100 million cornerstone investment or a RMB 50 million milestone payment depending on the progress of Tianjin Accendatech. This, combined with tiered net sales revenue sharing after product launch and overseas licensing revenue sharing (if any), constitutes the complete financial framework for this cooperation.

It is worth noting that the initial payment and milestone payments will be deposited into a jointly managed account, specifically for the Phase III clinical trials of ACT001 in mainland China. Accendatech Pharmaceutical also promises to achieve domestic approval and marketing of the drug in the cooperation field within three years. If the target is not met, the remaining funds in the jointly managed account will belong to Yifan Pharmaceutics, thus building a risk protection wall for this transaction.

Behind the market potential of ACT001 lies a huge unmet need in the treatment of brain metastases from small cell lung cancer. Data from the National Cancer Center shows that lung cancer has been the leading cause of cancer incidence and mortality in my country for many years, with 1.0606 million new cases in 2022, of which small cell lung cancer accounted for 15%. Even more serious is the extremely high tendency of small cell lung cancer cells to metastasize to the central nervous system; the incidence of brain metastases at initial diagnosis is about 15%, rising to 50% during treatment. Currently, treatment options for brain metastases from small cell lung cancer are limited, with whole-brain radiotherapy combined with chemotherapy and immunotherapy being the preferred approach, resulting in a patient survival of less than one year. ACT001, as a next-generation immunomodulator that synergizes radiotherapy, chemotherapy, and immunotherapy, aims to improve the efficacy of existing brain metastasis treatments. If successfully approved for market launch, Yifan Pharmaceutics will successfully enter this blue ocean market.

As a new generation of immunomodulators with a novel mechanism, ACT001 reduces the DNA repair capacity of tumor cells by inhibiting key signaling pathways such as NF-κB and STAT3 in the tumor microenvironment. It also exhibits synergistic effects with radiotherapy, chemotherapy, and immunotherapy, demonstrating potential advantages in local tumor control and survival prolongation. The Phase IIb/III clinical data disclosed in the announcement show that, compared with radiotherapy alone, ACT001 combined with radiotherapy can increase the intracranial response rate by approximately two times; in patients with brain metastases from small cell lung cancer, median survival is prolonged by approximately 53%, and after combination with immunotherapy, median survival is further improved to 14.7 months.

Currently, ACT001 has received 13 clinical trial approvals globally, three orphan drug designations in Europe and the US, rare disease designation in the US, fast track designation in the US, and breakthrough therapy designation in China. Its Phase III clinical trial for small cell lung cancer brain metastases has been initiated at 44 clinical centers across China, with 52 patients enrolled. Given the lack of dedicated approved drugs in this specific area, ACT001 is considered one of the fastest-progressing innovative drugs for this indication globally.