when china speed meets the quality headwind (part II)

In my previous article, I discussed how the conflict between rapid development ("China Speed") and inconsistent quality standards throughout the product lifecycle has significantly impacted the success rate of biologics in China. This conflict has hindered the country's ability to produce high-quality modern medicines, despite substantial government and private investment over the past decade, as well as national aspirations in this field.This follow-up piece will explore potential solutions to these challenges, acknowledging that some issues may not have readily available remedies. Additionally, I'll offer guidance for Western companies on evaluating Chinese biotech products and programs. This advice aims to help identify common quality-related weaknesses, which can then be factored into deal negotiations.Given China's evolving regulatory landscape and maturing innovation ecosystem, it's crucial for multinational pharmaceutical companies to develop strategies that capitalize on the country's emerging biopharma sector. As China continues to reform its drug review and approval system, understanding these dynamics becomes increasingly important for global industry players seeking to engage with the world's second-largest healthcare market.

Are There Effective Solutions to Quality-Adverse Factors for Chinese Biotech?

Quality Impact of Investigator-Initiated Trial (IIT) as First-in-man for Innovative Therapies

China has implemented a dual approach for testing innovative therapies, particularly cell and gene therapies, in humans. The traditional pathway involves filing an Investigational New Drug (IND) application with the regulatory agency, requiring rigorous evaluation of scientific rationale, ethics, and Chemistry, Manufacturing, and Controls (CMC) aspects. Alternatively, the Investigator-Initiated Trial (IIT) pathway allows for human testing without the IND process, focusing primarily on scientific and ethical evaluations at approved hospitals.

The IIT mechanism has provided Chinese biotech companies with a significant advantage, enabling faster human testing of novel therapeutics compared to the US and EU, where all "First-In-Human" studies require regulatory approval. This approach has led to notable successes, such as Nanjing Legend's therapy, which caught J&J's attention and resulted in the development of CARVYKTI®.

However, the quality of IIT studies varies considerably, depending on the rigor and integrity of both the drug inventors and clinicians involved. The lack of centralized standards and procedures, combined with the diversity of biologic therapies being tested, makes it challenging for hospitals to maintain consistent compliance with pre-approved protocols and statistical rigor across all IIT study applications. Moreover, the evaluation of drug manufacturing and quality is highly inadequate.

Another significant drawback of the IIT pathway is the inconsistent reporting of safety events, which hinders the accumulation of valuable clinical experience data for new therapies. This lack of standardized reporting makes it difficult to generate industry-wide insights on emerging therapeutics.

Quality Impact of Leadership and Talent Shortages

When biotech companies in China started moving into clinical development stages in tidal waves, the demand for quality professionals become vast and urgent. With the scale of the industry and the need for bilingual talents with prior relevant experiences, companies had to fill their quality positions with under-qualified and over-paid people. Some companies including my company, and a few others with proven track record of global quality teams, became hottest targets for pilfering quality talents; almost everyone who worked in my company for over 6months were heavily head-hunted with the promise of instant promotions and significant salary increases. This type of talent market is unhealthy as it's impossible for anyone to have learned enough, let alone contributed enough to any one company with such short tenures. Yet, this was widely accepted in Chinese biotech industry from 2015-2023. Such frequent job changes over time diluted the capability and knowledge depths the industry desperately needs to build in order to provide guardianship of quality to innovative bio-therapeutics from China.

Quality Impact of Lack of Intellectual Property Protection

With the high frequency of job changes, and also the overall lack of basic concept and practical solutions in intellectual property protection in China, quality systems and operating procedures are widely "copied" from one leading company to others, and then to others. With each rendition, the resulting system invariably loses cohesion leading to compliance gaps, and difficulty to customize to each therapeutic platform appropriately.

For instance, contract development and manufacturing organizations (CDMOs) may adopt quality systems from biotech/biopharma companies, while cell therapy companies might implement systems designed for small molecule or monoclonal antibody drugs. The results are compliance gaps, as well as risks in late stage product development due to early stage gaps including, but not limited to cell bank problems, or the use of non-controlled raw material in the production (more on both below).

Quality Impact of Chinese CDMO and CROs/CTOs

The lack of mature quality management expertise/system in small biotech is not a China-specific challenge. All small biotechs in the world encounter the same problem. The difference however, is that in the West, there is a mature ecosystem that has defined certain division of expertise and labor that small companies can take advantage of, in order to ensure quality of their early stage assets while learning about product development. CDMO and CROs for biologics have seen a tremendous development both in terms of numbers and also quality of the services provided. The credible service providers take at least 15 years to establish, as evidenced by the now recognized biologics CDMO giants Lonza, BI, Samsung Biologics, and more recently WuxiBiologics due to their successful track records in supporting biologics drug companies with global markets as their ambition. The CRO players are more diverse as many different type of CRO services have their own specialties and regulatory requirements. for each type is also niches. One leading service worth noting i is Charles River Laboratories (CRL), who my company in China had the honor to have collaborated on for biologics testing solutions. CRL has successfully completed the evolution from an animal testing CRO leader to Pan-Biologics Safety Testing leader and now a Cell and Gene Therapy CDMO leader.

The Chinese CRO/CTO and CDMOs specialized in biologics are largely established after WuxiBiologics started to show incredible commercial success in 2020, with both its stock price and revenue growth. As such, the overall level of experience of most of these CDMOs are limited, especially in supporting development programs that have the potential to succeed in the long term, especially in the western markets. The lack of Quality professional affect these service companies even more due to the scale and variety of products coming through. While many CDMOs did experience a short term boom in business around 2020-2022, when the investment in China was still abundant, and large number of redundant pipelines were competing for speed to IND into clinical stages, where the next rounds of funding are dependent upon, vast majority of those programs did not carry forward to product launches, and even less of them were fit for the western markets as I described in my previous blogs. Therefore, the Chinese CDMOs in particular, only exacerbated the poor quality problem in China biotech industry.

The challenge of establishing mature quality management systems in small biotech companies is not unique to China. However, the way this challenge manifests and is addressed differs significantly between China and Western countries.

In Western countries, a well-developed ecosystem exists that allows small biotech companies to leverage external expertise and resources to ensure quality in their early-stage assets while simultaneously learning about product development. This ecosystem includes:

1. Contract Development and Manufacturing Organizations (CDMOs)

2. Contract Research Organizations (CROs)

3. Contract Testing Organization (CTOs)

These service providers have evolved over at least 15 years, establishing credibility and expertise. Notable examples include:

• Biologics CDMO giants: Lonza, Boehringer Ingelheim, Samsung Biologics, and more recently, WuXi Biologics

• CRO/CTO leaders: Charles River Laboratories (CRL), which has successfully transitioned from animal testing to becoming a leader in biologics safety testing and now also a cell and gene therapy CDMO services

In contrast, China's specialized biologics CRO/CTO and CDMO landscape are relatively new, and CTO and CDMOs are largely emerging in droves after WuXi Biologics demonstrated significant commercial success around 2020. This recent development presents several challenges:

1. Limited overall experience, especially in supporting long-term successful development programs for Western markets

2. Shortage of quality professionals, affecting service companies even more due to the scale and variety of products they handle

3. Short-term business boom (2020-2022) driven by abundant investment and competition for speed to IND, rather than long-term product success.

   
   

The rapid growth and relative inexperience of China's biologics service sector have inadvertently contributed to quality issues in the country's biotech industry: Many programs supported by these CDMOs did not progress to product launches; few products were proven suitable for Western markets; the focus on speed over quality has exacerbated existing quality problems.

What "Quality Traps" to Look out for When Evaluating Chinese Biotech?

Over the past two decades, multinational pharmaceutical companies (MNCs) have continually evolved their "China Strategy" in response to the rapid growth of the Chinese biotech industry. This evolution has seen shifts from establishing local R&D hubs to actively seeking early-stage drug candidates from emerging Chinese startups and attempting co-marketing ventures for China-originated products.However, recent disappointments, particularly in the launch of Chinese biologics in the US market, have necessitated a strategic reassessment. In 2023, post-pandemic, MNCs are implementing new approaches to engage with the Chinese biotech sector.

It appears that the trend of the new strategy involves continuation to identify innovative R&D programs by Chinese start-ups, both for FIM and Fast-follow-ons, and aggressively seeking licensing opportunities to fill the R&D pipelines of the MNCs. However, during assessment and due diligence, an increasing emphasis should be given to, among others, intellectual property positions, as well as CMC. Amongst CMC, the "C", i.e. Quality of the program is often inadequately assessed in my experience working with both US and Chinese firms.

Below, I will outline some of the common Quality"pitfalls" in a program developed by a Chinese biotech which could carry detrimental consequences to the outcome of the collaborations between Western biopharma and Chinese biotech.

Cell Bank Testing

In the mature biologics markets in the West, cell bank testing are almost always sub-contracted to a few of the CROs/CDMOs with proven track records of performing these important safety and assays, under strictly controlled environment and quality systems. These service companies have established a solid trust from the US and EU regulatory agencies, and other global regulatory agencies over the years through inspections, and proven consistently reliable test results validated by performance of the products in the clinic. For example, the two CRO/CDMO giants that perform >90% of the cell bank testings for all biologics in the world, Charles River Laboratories and BioReliance, now a Merck company, have been in the business for over 20 years and they have also become the industry leaders who the US and EU drug regulatory authorities rely on to champion new innovative test methods for new types of biologics as the industry has been rapidly evolving.

Cell banks serve as the foundation for most biologics in development, playing a crucial role as the primary source material. The establishment of Master Cell Banks (MCBs) is a pivotal step in the drug development process, with far-reaching implications:

1. Cornerstone of Production: MCBs provide the initial cells from which all subsequent batches of the biologic drug are derived.

2. Consistency: They ensure uniformity in the genetic makeup of the cells used throughout the drug's lifecycle.

3. Long-term Stability: Once established, MCBs are designed to remain unchanged throughout clinical development and commercial production phases.

   
   

Altering an established MCB is generally avoided due to several factors:

1. Stochastic Changes: Any modification to the cell bank could introduce unpredictable genetic or phenotypic variations.

2. Characterization Difficulties: These changes may be subtle and challenging to fully characterize without extensive analysis.

3. Regulatory Implications: Significant changes to the MCB could necessitate repeating portions of clinical studies to demonstrate equivalence.

4. Time and Cost: The process of re-establishing and re-characterizing a cell bank is time-consuming and expensive.

   
   

Given these considerations, the initial establishment of a high-quality, well-characterized MCB is critical for the long-term success and consistency of biologics production. Any changes to the cell bank must be carefully weighed against the potential risks and regulatory hurdles they may introduce.

The requirements for cell bank testing are described in ICH, 21CFR, Eudralex and Chinese GMP and Pharmacopeia from different regions, The details, however, between the Chinese requirements vs. US and EU, however are very different. One most pronounced example lies in the required adventitious virus testing for viruses of porcine origin; both the required virus types, and corresponding indicator cells to demonstrate safety from these viruses in Chinese regulations are significantly lower than that from the FDA and EMA. As the CGT products use very similar manufacturing processes including for cell bank generation, such differences in adventitious virus testing could lead to serious safety risks from programs coming out of China.

An even more fundamental yet widely spread issue is that testing service laboratories in China that provides these cell bank testing all jumped into the sub-sector in the past 3 years, without having had previous experience in biologics product development and Quality Control. As most of the Chinese companies, they were founded to compete against global service providers by SPEED and PRICE, using what could be quickly "copied and pasted", without understanding the foundations for these control systems and standards. There was a misunderstanding that GLP or ISO systems could be sufficient for biologics product safety testing. Even where the bold claim of "meeting global GMP" is made, they are unverified, as so far, none of them, besides WuxiBiologics, have been inspected by any regulatory authorities including FDA or EMA. As most of these CTOs have only supported products entering early stage clinical trials, the safety consequences from unreliable testing results are neither inspected, nor easily distinguishable from the innate safety related characters of the innovative new biologics product. Unfortunately, huge number of products with safety testing from these Chinese CTOs are being used in human trials world-wide, and the risks from the sub-standard testing services in China will likely surface in the years to come.

Replication Competent Virus Testing

Other safety testings important and unique for cell and gene therapies include replication competent virus testing. There is a general lack of understanding of the appropriate assays and controls for these safety testing for CGT products in China.

Take replication competent lenti-virus testing (RCL) as a most common example: the FDA Guideline (2020 Ref 1) provided a framework for how such assays should be designed, without giving out step-by-step instructions on the details. In the past 3 years, with the exception of my company, JADE Biomedical, most all other local Chinese CTOs have established their RCL assays by copying the method described in a publication by Cornetta et al. (2011, Ref 2), even though understanding of the lenti-virus delivery technology and analytical tools have evolved tremendously over the past decade. Since it is a complex assay with multiple cell culture and detection steps involved, each of the steps requires its own controls, and the totality of controls from all steps should ensure that the test results at the end are reliable in demonstrating safety from RCL. In addition, since the type of CGT products using lenti-virus as delivery vehicle vary significantly, so the appropriate sample suitability studies should also be individually designed. For example, a virus production system using attached cells vs. suspension cells would have to go through different sample suitability study designs. A test sample that comes from end of production-virus harvest and purified virus also should also be considered differently. Different detection methods at the end of the cell culture requires different validations and controls. All these require in-depth understanding of the process and product quality control strategies, as well as analytical tools employed. The average Chinese CTOs offering these tests do not yet have this level of expertise and experiences.

Another serious risk from the RCL test used in China is the utilization of a weak HIV virus as the positive control where many P3 labs in China have been growing. Given the high mutation rate of HIV viruses, frequent and often uncontrolled culturing of an HIV virus could lead to significant consequences in creating new HIV virus strains, and therefore creating a serious public health risk.

Use of Raw Materials that Are not Suitable for GMP

Given how many Chinese companies are trying to reduce cost of their R&D and win by SPEED and low cost, many early stage companies have developed their prototype products using locally sourced materials, equipment and consumables. Therefore, there is a large possibility that sub-standard raw materials have been used, and if critical for the product quality, the poor control of these materials may surface during the tech transfer stages between a Western company and a Chinese company. If the program being considered was already in clinical stage, especially if they have a Break-through/Fast-track designation, the time it takes for a change control for these critical materials can be long and expensive and therefore directly affect the development and product launch timelines.

In Summary

In this final installment of my five-part series on China's biotech industry, I've shared my observations and opinions regarding the current challenges in Chemistry, Manufacturing, and Controls (CMC), with a particular emphasis on quality risks in biologics programs originating from China. Despite significant progress over the past decade, substantial hurdles remain in improving overall quality standards.

Key Points:

1. Due Diligence Importance: The necessity for thorough CMC due diligence, with a strong focus on quality, cannot be overstated.

2. Common Quality Gaps: I've highlighted several examples illustrating widespread quality issues in China-born biologics programs. These are not meant to be comprehensive.

3. Evolving Therapeutic Landscape: With China remaining a hotbed for innovative R&D in new biologics therapeutics (e.g., ADCs, cell and gene therapies, mRNA), quality challenges extend beyond basic GMP compliance.

4. In-Depth Review Needed: A more comprehensive evaluation of overall control strategies for manufacturing and product quality is crucial.

5. Potential Risks: Failure to address these issues could lead to catastrophic outcomes, including safety events in clinical trials or delays in product launches in Western markets.

Looking Forward

This series aims to spark further discussions on these critical topics. I welcome feedback from colleagues and industry experts alike. As we strive for a more robust global supply chain and invest in modern therapeutics to address unmet medical needs, our common goals include:

1. Achieving higher success rates for product realization

2. Improving return on investment (ROI)

To realize these objectives, it's imperative that we address or sufficiently mitigate gaps in CMC, particularly in quality. These issues pose potential threats to the clinical and commercial success of biologics programs. By fostering open dialogue and collaboration, we can work towards enhancing the overall quality and success of biologics development, not just in China, but on a global scale.

References

1. Testing of Retroviral Vector-Based Human Gene Therapy Products for Replication Competent Retrovirus During Product Manufacture and Patient Follow-up; Guidance for Industry Jan/2020

2. Replication-competent Lentivirus Analysis of Clinical Grade Vector Products

   Kenneth Cornetta et al., 2011