A Vision of Affordability

John Oyler

Thirteen years ago, John Oyler co-founded and started BeiGene in Philadelphia and Beijing with his colleague and friend Xiaodong Wang, PhD. Oyler, CEO, and Wang, Chairman of the Scientific Advisory Board, started with a vision for oncology treatments that would be innovative and more affordable for patients worldwide. And that vision required a fast and hard look at where BeiGene could make decisions that both Oyler and Wang felt were achievable and sustainable to establish and grow their business.

Oyler and Wang’s shared vision and experience were compelling enough to bring in some heavy hitting early investors and partners in multinational biopharmas Merck and Johnson & Johnson, respectively, but also required Oyler to put his entire savings at the time on the line, just weeks before his daughter was due to be born.

“We saw the opportunity to truly think globally and build a business based on great science and affordability to reach far more patients than what the industry was doing. We believed in it, we believed it was doable, and both Xiaodong and I were just all in on it,” he said.

Thirteen years later, BeiGene has three approved products on the market— BRUKINSA® (zanubrutinib) in the United States; tislelizumab, which is licensed with Novartis and filed in the US and Europe as well as marketed in China; and pamiparib in China. Meanwhile, the company currently lists 144 studies on ClinicalTrials.gov; has commercial and collaborative licenses with a host of pharma including Amgen, BMS, Merck, Mirati, Novartis, and Seagen, and is building its first U.S.-based manufacturing and clinical R&D site outside of Princeton, NJ.

In BeiGene’s fourth quarter and full year 2022 financial results announced late February 2023, BRUKINSA product revenue totaled $176.1 million and $564.7 million for the quarter and full year, respectively, increasing 101% and 159% from the prior-year periods. BRUKINSA was first approved in the United States in 2019 for mantle cell lymphoma (MCL), in 2021 for Waldenstrom’s macroglobulinemia and in January 19 of this year for chronic lymphocytic leukemia (CLL), one of the most common forms of leukemia and the largest market opportunity yet for the company.

BRUKINSA is now the third oral Bruton’s tyrosine kinase (BTK) inhibitor FDA-approved for the treatment of CLL. Imbruvica (ibrutinib) and Calquence (acalabrutinib) are also approved BTK inhibitors for the treatment of CLL. The BTK inhibitors have been proven effective for hematological cancers. Oyler explains that years ago, BeiGene scientists created a hypothesis to develop medicine that could sustainably inhibit BTK, not only in blood, but in all the disease compartments—the lymph nodes, spleen, bone marrow—and with better tolerability.

“Our belief was if you’re fighting a disease, you want to fight it all the time, everywhere. You never want to give it even a second to rebound or a foothold from which to rebound. The whole premise was combining that sustained inhibition with a more potent and selective molecule that would limit adverse events that are a heavy burden on patients, including cardiac toxicities and even life threatening events.”

Meanwhile, first to market Imbruvica, while a game changer for cancer, also showed concerning patterns of atrial fibrillation (afib), which could require patients to stop taking the medication, as well as ventricular tachycardias, which cause sudden death.

Because of its belief in the efficacy and specificity of zanubrutinib, BeiGene decided to conduct head-to-head trials against ibrutinib in CLL, the primary indication for patients taking BTK inhibitors. The results of the Phase III study, called ALPINE, were presented as a late-breaker at ASH in December, and published simultaneously in the New England Journal of Medicine. The study showed that BRUKINSA had superior progression free survival, significantly lower rates of afib, and no cardiac sudden death in the BRUKINSA arm, where there were six in the ibrutinib arm, around 1.9% of patients in that portion of the study.

“Most people were doubtful that we could make a version better than Imbruvica. But we followed the science, we saw the data, we believed we were better. And we were willing to stand up for what we believed, although a lot of companies wouldn't have taken that risk. We really followed the science,” says Oyler.

In ALPINE, BRUKINSA also outperformed Imbruvica on progression-free survival in the hard-to-treat 17(p)del mutation patient subpopulation with a hazard ratio of 0.52, which translates to a 48% reduction in risk. Oyler noted that competitor Calquence failed to differentiate itself vs. Imbruvica in that same subpopulation – posting a hazard ratio of 1.0 in its own head-to-trial – while acknowledging that BeiGene can’t make cross-trial comparisons.

BRUKINSA is now approved in more than 65 markets and is priced thousands of dollars less per month than Imbruvica, following its availability and affordability mission. But what’s next for BRUKINSA? BeiGene is currently in talks with regulators around its data for follicular lymphoma. It is combining BRUKINSA with a next generation BCL-2 inhibitor, which is another pathway that works for hard-to-treat CLL patients, which Oyler says has promise of creating a fixed-duration treatment. The company is also pursuing its BTK protein degrader, BGB-16673, a molecule that attaches to and destroys the protein, which can overcome patient issues with resistance to BTK inhibitors.

The science of affordability

BeiGene’s 2022 financial results also showed an increase in R&D expenses, which were attributed to increases in headcount and costs related to discovery and development investment activities. This includes its “continued efforts to internalize research and clinical development activities” which partially offset lower fees paid to clinical research organizations (CROs) for clinical trials. This choice to internalize clinical development was, basically a math problem looking for a solution.

As Oyler explains, for most oncology medicines, 75% to 90% of the cost is wrapped up in clinical trials. Many large oncology trials take two to three years to enroll the number of patients needed. In the United States and Europe, Oyler notes, the number of oncology patients that enroll has stayed 5% for some years, despite innovations and breakthroughs. Oyler bases this on CROs who go back to the same centers, countries and, therefore, patients over and again.

“We wanted to work directly with new centers and countries, including those in underutilized countries and regions, so we could enroll more quickly.”

This theory of broadening around] physician investigators and their patients in areas underserved by the industry has been put forth more recently by industry to address the issues around diversity of trials, as well as enrollment improvement times. But Oyler tried this early in BeiGene’s first clinical work in Australia, running a Phase I trial for $3 million with a CRO. Oyler asked the CRO if they could open a site in Thailand to enroll more quickly near a recognized breast cancer doctor. “Can we just add that one site since the protocol is written? And they came back with a $2 million price tag,” explained Oyler. “It didn’t make sense. The CRO could have built a relationship with us, and a business in Thailand for future trials.”

Quick to pivot, Oyler and Wang realized that to pursue their vision of affordability, they had to build an internal team of people who had a core competency in clinical operations—technology, working with new sites, quality and GCP. “We wanted to bring centers into the clinical development system long-term. We can build deep relationships and help us accelerate what we're doing and, therefore, lower the costs of these trials,” said Oyler. And BeiGene did. It has become the largest oncology trial sponsor in Australia; became large sponsors in Italy, Spain, and Poland; turned into a major sponsor in China when its regulatory system became more favorable, and in the US, it has taken longer because of the saturation, but getting top KOLs involved with their cutting-edge medicines has changed that.

BeiGene is continuing to build this model and is making investments in Brazil and South Africa. “In general,” says Oyler, “the starting mission of the company was do great science, but now in every aspect of the business, we're going to try to transform the way things are done to translate into affordable medicines. Yes, the single biggest piece of that was entirely rethinking clinical trials and we did and used our own clinical trial technology to prevent errors and reduce costs and create a higher quality data set. We are now doing challenging the status quo in every stage--research, manufacturing for example--to do things differently and faster with higher quality.”

Tackling the affordability problem is also a math problem, which is based on the traditional pricing system that is US centric and the US pays the vast majority of innovation. And that has sustained the industry. But back to the mathematical drawing board, Oyler said there could be a different price point that works where you can get more medicine to more of the world, at a lower price point. And that would be based on volume. The larger volume would then create gross margin that contributes back to pay for the clinical trial cost. A circle of innovation, access and affordability, so to speak.

“We are just saying, maybe there's a different model where you can do clinical development at half the cost, and where most of that cost is up front. And then revenue from the rest of the world on gross margin can come back to pay for that 50% to 60% of the cost, that could lead to lower pricing in the US and just as much profitability,” says Oyler. “And not just a better way to do trials, but also a better way to commercialize around different price points and different pricing that can just be better for everybody,” concludes Oyler.

Admittedly, Oyler acknowledges other systemic issues exist that confound the pricing paradigm, and one can be found in the US regulatory system for the accelerated approval programs usually in smaller indications, less expensive and more exclusivity. And the second is the unintended consequences of the IRA. Oyler admits that manufacturers need to work more closely with the regulators, with the policy centers across the world to truly address the affordable, innovative medicine paradigm. [FLAG]

Behind the business

Oyler is a serial entrepreneur. He started his first business while at MIT, which sold and rented all types of items students would need in that larger Boston area. Oyler and his roommate did very well, and Oyler loved the challenges involved. He went to McKinsey, and onto his MBA at Stanford. He started companies in mobile, wireless, he turned around an oncology company, healthcare data, a CRO and back into oncology. At the core of his entrepreneurialism, besides solving for problems and challenges, is the fundamental belief that you can have a company that does good for people and good for its people.

When Oyler was growing up in Pittsburgh, many families were moving because of the loss of jobs in the area and he lost quite a few friends in the exodus. And then he lost some key friends after college from diseases, some rare, leaving children and families behind. What speaks to Oyler is that well-run companies can provide a solid foundation for a community, a person, a family for stability, and a well-run company can provide a solid foundation for people of all incomes and countries to improve their quality of life in health. And for those reasons, Oyler continues to take on the challenges that exist to what makes a successful biotech in the biopharma space.