Merck, GSK take a big gamble, Hengrui joins the table, AZ and Roche in a fierce battle, the trillion-dollar track opens!

On July 28, Hengrui and GSK reached a significant cooperation agreement to jointly develop up to 12 innovative drugs. Notably, the agreement includes a licensing deal for a potential best-in-class PDE3/4 inhibitor (HRS-9821), which is currently in clinical development for the treatment of chronic obstructive pulmonary disease (COPD).

In just 20 days, the COPD field suddenly became a battleground.

First, Merck made a massive acquisition worth billions, followed by GSK's bold move, with mergers and business development transactions directly targeting the same goal—COPD. This area, once regarded as a "valley of death" for research and development, has overnight become the focus of global capital and innovation.

COPD is the third leading cause of death globally, following cardiovascular diseases and tumors, yet it has long lacked breakthroughs due to the complexity of the disease and limited drug options. Over the decades, pharmaceutical giants have faced numerous failures here, with promising targets like TNF-α, CXCR2, and PI3K failing one after another. Recently, as Merck and GSK were "buying, buying, buying," Roche faced setbacks in a COPD pipeline.

But "the bigger the storm, the more valuable the fish," and pharmaceutical companies continue to flock here, especially since a series of events in 2024 have changed the silence surrounding COPD.

First, Verona Pharma launched the world's first PDE 3/4 inhibitor ensifentrine; soon after, the success of Sanofi/Regenron's dupilumab in the COPD indication brought new hope to this long-quiet field.

Capital has taken notice, transforming COPD from a niche area into a competitive arena for multinational corporations (MNCs): as multinational giants wield their financial swords, Chinese companies are also rising, beginning to compete alongside MNCs, especially after GSK "set its sights" on Hengrui. Will the next major business development occur with a Chinese company?

The Blade of MNCs Has Arrived

COPD, the "silent killer," is not a name without merit. Research published in The Lancet Respiratory Medicine shows that COPD is the third leading cause of death globally, following cardiovascular diseases and cancer.

Traditional treatments rely on inhaled bronchodilators (LABA, LAMA) and corticosteroid (ICS) triple therapy. They can alleviate symptoms and slow disease progression but cannot reverse the decline in lung function. Patient compliance is low, side effects are significant, and resistance issues are prominent, making it difficult to cover all phenotypic patients. Especially during acute exacerbations, existing drugs have limited preventive power, and each acute exacerbation can cause a "cliff drop" in lung function, accelerating the disease towards irreversibility.

This "high incidence, high mortality, high unmet need" characteristic makes COPD one of the largest yet most underestimated chronic disease markets globally. Because of this, every new drug breakthrough brings significant tremors to capital and industry.

The 2024 GOLD guidelines for the first time recognize the value of precision-targeted drugs, incorporating Verona Pharma's PDE 3/4 inhibitor ensifentrine and Regenron/Sanofi's IL4Rα monoclonal antibody dupilumab into recommendations, indicating that the treatment strategy for COPD is shifting from "symptom control" to "disease intervention," from "broad" to "precise." This may also be an important turning point for multinational pharmaceutical companies to re-examine the COPD track.

The real change in the COPD landscape began with two significant transactions in just the past twenty days.

On July 9, Merck & Co. spent $10 billion to acquire Verona Pharma. Verona's core product is ensifentrine, which can be seen as a powerful counterattack from Merck & Co.

Merck & Co. is not a major player in the respiratory field, but after acquiring ensifentrine, the situation changed. As the world's first PDE3/4 inhibitor, ensifentrine has both bronchodilator and anti-inflammatory effects, successfully breaking through the past limitations of high side effects and limited efficacy of PDE4 inhibitors. Since its launch, ensifentrine's sales have exceeded $100 million in just 8 months, with peak sales expected to approach $4 billion. Some analysts have compared the significance of this product to that of IL-17 inhibitors for psoriasis in the past.

GSK's move towards Hengrui can be seen as a strategic comeback for the "old hands" in the respiratory field.

Just 20 days after Merck & Co. announced its acquisition, GSK reached a collaboration agreement with Hengrui Pharma to co-develop up to 12 innovative drugs for $12.5 billion, with the most notable being the licensing of the best-in-class PDE3/4 inhibitor HRS-9821.

GSK is a traditional leader in the respiratory field, but in recent years, its Trelegy for COPD treatment has faced a patent cliff, increasing market pressure. Since 2025, GSK has begun to re-strategize and intensify its efforts. The first step was the approval of mepolizumab (Nucala) as an adjunctive maintenance treatment for adults with eosinophilic phenotype and poorly controlled COPD patients in the MATINEE trial. The second step is to secure HRS-9821 from Hengrui, locking in the next potential drug king among PDE3/4 inhibitors.

Meanwhile, Sanofi, AstraZeneca, and Roche are also not to be outdone. Sanofi has taken the lead in the COPD biologics market with dupilumab, while AstraZeneca and Roche are focusing on targets such as IL-33, TSLP, and ST2.

As the winds rise and undercurrents surge, every move could change the future landscape. Merck & Co. and GSK have already made their moves; who will be the next project to attract capital investment?

After Hengrui, who can break through the "Valley of Death"?

The high risk of COPD research and development has almost become an industry consensus. Over the past twenty years, new drug development has repeatedly failed, with the PDE4 inhibitor roflumilast limited in use due to side effects, and TNF-α inhibitors failing in late-stage clinical trials. Overall, while most targets have theoretical foundations, they have all failed to meet preset endpoints in Phase II/III trials. Even the successful ones have almost always had to adjust their strategies after failures to regain new life.

Sanofi/Regenron's dupilumab is the first biologically targeted drug for COPD, which will be the first to be approved in the EU in July 2024, achieving precise treatment for eosinophilic COPD by targeting the IL4/IL13 pathway By September 2024, this indication is expected to receive NMPA approval. However, Sanofi's research and development in this field has not been smooth sailing, as another heavyweight IL-33 monoclonal antibody Itepekimab failed in a key trial.

GSK developed an innovative COPD project 256066 over a decade ago, which showed high in vitro efficacy in clinical trials, but failed to detect statistically significant changes in inflammatory markers among mild COPD patients, ultimately disappearing from GSK's R&D pipeline. In May of this year, GSK's other new drug—IL-5 antibody Nucala, which was approved by the FDA—also faced setbacks in the COPD field, with two Phase III studies failing due to an inability to distinguish the eosinophil subgroup. Subsequently, GSK adjusted its clinical trial strategy, with a trial named MATINEE precisely targeting patients with high eosinophil counts (≥300 cells/μL) and excluding asthma patients, allowing it to escape this "valley of death."

AstraZeneca has also made extensive arrangements around COPD, advancing multiple new drugs such as IL-5 antibodies, IL-33 antibodies, and TSLP antibodies in COPD clinical trials. Among them, Tezspire (TSLP monoclonal antibody) achieved excellent efficacy in Phase IIa clinical trials for COPD and received FDA breakthrough therapy designation in August 2024. However, another IL-33 monoclonal antibody tozorakimab failed to meet its primary endpoint in a COPD Phase II study in September 2024.

Roche's results have been mixed. The IgG2 monoclonal antibody astegolimab achieved its primary endpoint in the Phase IIb ALIENTO study (NCT05037929), significantly reducing the annualized acute exacerbation rate (AER) at 52 weeks. However, it failed to achieve the same primary endpoint in the Phase III ARNASA trial (NCT05595642). Looking further, Roche's oral PDE4 inhibitor, roflumilast, although approved for some severe COPD patients, has been severely limited in clinical application due to systemic side effects.

While multinational corporations (MNCs) are making strides, local Chinese pharmaceutical companies are also catching up.

Undoubtedly, Hengrui has become the focus of the current COPD field with its latest transaction. Its HRS9821 has validated its tolerability, safety, and pharmacokinetic characteristics in Phase I studies. Additionally, GSK's collaboration includes another 11 early-stage projects, which is seen as a deep binding between Hengrui and top global MNCs. As a result, Hengrui's stock surged 24.54% in Hong Kong, while its A-shares hit the daily limit.

Not just Hengrui, Chinese companies are evolving from a marginal role in COPD to a leading one. This deal also brought about a trading halt for Haikang and a 7.09% surge for China National Pharmaceutical Group's Hong Kong stocks The progress of Zhengda Tianqing's research pipeline TQC3721 is second only to ensifentrine, with the inhalation suspension having completed Phase II clinical trials and receiving approval for Phase III clinical trials on June 10, 2025, while the inhalation powder is in Phase I research stage. Haisco's HSK39004 inhalation suspension and inhalation powder are both in Phase II clinical stages, progressing slightly slower than Zhengda Tianqing.

The reason for accelerating R&D among Chinese pharmaceutical companies is naturally the enormous market potential. Specifically, in China, the number of COPD patients reaches 100 million, and statistics have shown that over 70% of COPD patients have not yet been diagnosed. Even among those diagnosed, the standardized treatment rate is less than 30%. This indicates that there are significant gaps and unmet needs in diagnosis, treatment, management, and other aspects.

For Chinese companies, the blade for COPD has already been drawn. Whether it is Merck's 10 billion or GSK's 12.5 billion, these are just the prologue. As more pipelines enter the later stages of development, there will be more competition: after PDE3/4, who will be the next game-changing therapy? Will MNCs continue to make high-priced acquisitions? Can Chinese innovation continue to excel? The story of the COPD landscape has just begun.

This article is sourced from: E Pharmaceutical Manager, original title: "Merck, GSK gamble big, Hengrui joins the table, AZ and Roche in fierce battle, the trillion-dollar track opens!"

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