And, since it crosses wires with the BeiGene story we've followed here for going on three years, I'll offer this, tonight:
This is a bit of a detour, but yesterday (or the day before), Marty wrote again about BeiGene, the China based I/O darling of late. But Marty thinks it is going to crater.
I think he's mistaken -- or if it does, it won't be for the reason Marty posits. That is, it won't be because Merck crushes it with the rival I/O behemoth Keytruda, inside China.
Since Marty's experience (meager as it is) has been exclusively inside the warped US markets -- he frankly doesn't understand that, in large portions of the rest of the globe (as to life sciences, in particular) -- and especially as to revolutionary new, cutting edge treatments, the art of business is not conducted as... a zero sum game.
Let's hear Marty out; then I'll explain, and clear it up:
. . . .Opdivo and Keytruda are approved in China. CStone and countless others are in pivotal trials. AstraZeneca has a long history in China and you can bet will register Imfinzi there. I’m not sure what Roche’s or Pfizer’s ambitions are, but they also do strong business in China and have globally registered PD-1s. So there are at least 6 PD-1 mabs I can name off the top of my head that are China-approved or likely to be that do not come from Beigene [sic]. But Beigene [sic] has a very large market capitalization. This will not persist. I have not seen something like this in a long time. . . .
Or... ever. Because Marty has no. frame. of. reference.
He's a child in this arena, applying his "lessons learned" from one country only, with no reason to do so. Okay -- let's get the basics out of the way (though these are clearly unknown, to Marty):
Given that a course of treatment with immuno-oncology biologics costs nearly $100,000 inside China, it is available only for the Party elites, and their relatives, and the billionaires. It is not for the 1.4 billion or so other, ordinary, folk. And it likely will never be.
In China, then, two things are going to happen: (1) there is going to be an effort made, to make sure most market participants get some of the pie, on a new treatment (given the vast amounts of China's Party Elite money already at risk); and (2) there is going to be a strong regulatory preference (easily seen by the discerning eye) for... local businesses (i.e., inside China).
Merck itself smartly partnered with BeiGene four years ago, in founding it -- having seen decades of this effect. Merck is no longer a huge shareholder of BeiGene (after several selling shareholder rounds), but its DNA is all over the company, in its executive ranks, and processes, in country.
So -- you should think of what Marty sees as cut throat competition... more as... "co-op-tetion". Not really "competition", in the Darwinian sense of a US market.
Why? because, by regulatory fiat, China's FDA will be sure that BeiGene does just fine. And Merck will help it -- as that is smart in-country business.
Most of these cancer treatments will occur on a lushly tropical and opulently developed resort island for elites, in the South China Sea. There will be lots of money for all the companies.
Marty cannot see that the whole world doesn't work in quite (or remotely) the same ways the US and parts of EU do.
So don't trust him -- about BeiGene. He. Is. Clueless.
Onward.
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