<div id="readability-page-1">When the shares of Revolution Medicines surged after the US biotech firm unveiled a landmark result – its drug nearly doubled the overall survival for late-stage pancreatic cancer patients to 13.2 months – investment banks and scientists flagged that the company’s Chinese rivals racing to target the same cancer mutation are significantly undervalued by the market. Chinese biotech firms were closing the gap with the United States as the country “has developed a highly competitive and rapidly advancing ecosystem in RAS-targeted drug development,” said world-renowned oncology leader Antoine Yver in a written reply to the South China Morning Post. “The large patient population, significant unmet medical need, and multibillion-dollar market potential have made RAS one of the most active and highly contested areas in oncology drug development,” Yver said. RAS – from rat sarcoma virus, first discovered in retroviruses isolated from rats – was named after the proteins that regulate how cells grow, multiply and survive. Cancer can begin when the genes encoding these proteins are damaged or mutated, according to scientists. The fast pace of China’s challenge to the US biotech and innovative drugs sector is due to massive input and policy support from Beijing – and it is also set to rewrite the valuation of companies listed in mainland China and Hong Kong. Recent clinical successes in RAS-targeted therapies have unlocked “tens of billions of dollars” in global market opportunities, with the second half of this year set to be “a catalyst-rich period” for the space, according to a recent Morgan Stanley report. RAS mutations occur in at least 20 per cent of all human cancers, making them one of the most common causes of death globally. They are highly prevalent in non-small-cell lung, pancreatic, and colorectal cancers. Jiangsu Hengrui Pharmaceuticals, the largest pharmaceutical company in China by market capitalisation, had one of “the broadest and most innovative RAS portfolios” in the Chinese biopharma sector, Morgan Stanley’s report said. The investment bank estimated peak sales of about US$3.8 billion in the United States and China across Hengrui’s major RAS drug candidates. “This could translate into 7 to 22 per cent upside to the stock price from this franchise alone, which we think is barely priced in,” it said. Hengrui’s lead RAS asset, a KRAS G12D inhibitor injection, has advanced to phase three in China. Its phase two data showed about 90 per cent of pancreatic cancer patients had not seen their cancer grow or spread at six months, according to the company.  Herbert Loong Ho-fung, an associate professor in the department of clinical oncology at the Chinese University of Hong Kong, said that privately held D3 Bio, headquartered in Wuxi, in eastern China’s Jiangsu province, was among the most promising players in the field. Its lead drug, a next-generation KRAS G12C inhibitor in whose development Loong was personally involved, received US FDA fast track designations. It is currently in phase two global clinical trials. “In early testing, it shrank tumours in close to 60 per cent of previously treated lung-cancer patients and controlled the disease for about a year,” said Loong. China’s drive into this field has also extended to other companies, some of which have already developed approved drugs. “Within about 18 months, China went from having no approved RAS drug to having three of its own: fulzerasib, garsorasib and glecirasib,” said Loong. Fulzerasib and garsorasib were initially developed by Shanghai-based GenFleet Therapeutics and InventisBio, respectively, while glecirasib was developed by Beijing-based Jacobio Pharma. GenFleet and Jacobio are listed in Hong Kong, while InventisBio trades in Shanghai. All three have since been included in China’s National Reimbursement Drug List, after government price negotiations reduced their costs for insured patients. “For about 40 years, RAS could not be treated as the protein’s surface is so smooth that no drug could attach to it, and medical textbooks described it as undruggable,” Loong said. That changed in 2021, when researchers identified a small pocket on one specific mutated form of the protein where a drug could finally bind. In just five years, and with the largest pharmaceutical companies having entered the field, more than 80 RAS drugs had been in clinical testing, Loong added. Nasdaq-listed shares of Revolution Medicines have soared about 141 per cent year to date, helped by the phase three clinical data for its drug daraxonrasib, released in April.</div>

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<p>China's biotech sector is rapidly challenging US dominance in RAS-targeted drug development, driven by massive policy support and a large patient population. Recent clinical successes, such as Revolution Medicines' results, have highlighted undervalued Chinese rivals like Jiangsu Hengrui and D3 Bio. With over 80 drugs in testing and three already approved in China, the market potential is estimated at tens of billions, potentially rewriting valuations for mainland and Hong Kong-listed companies.</p>

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China’s biotech boom: RAS-targeted drugs challenge US dominance