Hansoh Pharma's Exclusive Product Added to National Reimbursement Drug List and Secures RMB 200 Million in Expanded Volume-Based Procurement; New Injectable Launches Soon

Hansoh Pharma (operating entity: Hansoh Pharmaceutical) successfully listed on the Hong Kong Stock Exchange on June 14, with its market capitalization surpassing the HK$100 billion mark on the first day. As of June 30, 2019, the company reported revenue of approximately RMB 4.599 billion, a year-on-year increase of 21.9%; R&D expenses amounted to RMB 558 million, up 53.8% year on year, accounting for 12.1% of total revenue; profit reached approximately RMB 1.296 billion, representing a year-on-year increase of about 24.3%. As of 12:00 noon on the day of publication, Hansoh Pharma’s market capitalization stood at HK$147.6 billion. In the first half of 2019, Hansoh Pharmaceutical successfully capitalized on the policy benefits arising from the updated National Reimbursement Drug List and the expansion of centralized volume-based procurement. What new growth drivers will emerge in the second half of the year?

Figure 1: Revenue of Hansoh Pharma by Business Segment in H1 2019 (Unit: RMB 100 million)

(Source: Semi-annual Report of Listed Companies)

Exclusive New Diabetes Drug Added to National Reimbursement List, Poised for Explosive Growth

Hansoh Pharma’s semi-annual report mentioned that in the 2019 updated National Reimbursement Drug List, none of the company's products were removed, and one product was added, which is Repaglinide Metformin.

Figure 2: Detailed Information on Repaglinide and Metformin in the 2019 National Reimbursement Drug List

(Source: Menet China National Reimbursement Drug List Database)

Table 1: Approval Status of Hansoh Pharma’s Exclusive Product, Repaglinide and Metformin

(Source: Menet MED China Drug Evaluation Database 2.0)

Data indicate that the original developer of repaglinide/metformin is Novo Nordisk; however, no related products are currently marketed in China. This combination antidiabetic agent integrates two distinct mechanisms of action. In conjunction with dietary control and exercise, it is indicated for patients with type 2 diabetes mellitus who have inadequate glycemic control on metformin hydrochloride monotherapy, to achieve better blood glucose management.

Repaglinide and Metformin Tablets are an exclusive product of Hansoh Pharma, approved for market launch in 2014 under registration category 3.2. Data from Menet shows that in 2018, the combined sales revenue of Repaglinide and Metformin Tablets (I) and (II) at terminals of Chinese public medical institutions—including urban public hospitals, county-level public hospitals, urban community health centers, and township health centers—amounted to RMB 320,000, representing a growth rate exceeding 3,112%. The inclusion of this product in the new National Reimbursement Drug List is expected to create opportunities for rapid growth; however, a wave of new competitors is entering the field, with Shanxi Bailu Pharmaceutical and Chengdu Yuandong Bio-pharmaceutical both having Class 4 generic drug applications currently under review and approval.

“4+7” Bid Winner Expands into Broader Volume-Based Procurement, Quietly Securing a ¥200 Million Market

Table 2: Hansoh Pharma’s Winning Bid Status in the “4+7” Pilot Program and Its Expansion

(Source: Shanghai Sunshine Pharmaceutical Procurement Network; compiled by Menet, for reference only)

In its semi-annual report, Hansoh Pharma stated that during the review period, the company actively adjusted its strategies in response to national healthcare reform policies. The volume-based centralized procurement-selected products, Oulanning (Olanzapine Tablets) and Xinwei (Imatinib Mesylate Tablets), maintained steady growth. During last year’s “4+7” volume-based procurement program, Hansoh Pharmaceutical exclusively won the bids for olanzapine tablets and imatinib mesylate tablets, securing a total procurement value of RMB 226 million across Beijing, Tianjin, Shanghai, Chongqing, Shenyang, Dalian, Xiamen, Guangzhou, Shenzhen, Chengdu, and Xi’an.

This September, the expansion of centralized procurement triggered a new wave of price reductions. A total of 45 companies were selected as winning bidders, with 60 products awarded. Compared to the lowest procurement prices in alliance regions in 2018, the average price reduction for winning bids was 59%. Compared to the winning bid prices from the “4+7” pilot program, the average reduction was 25%.

Hansoh Pharma’s Olanzapine Tablets and Imatinib Mesylate Tablets Have Successfully Won Bids AgainHansoh Pharma’s olanzapine tablets and imatinib mesylate tablets have once again been successfully selected in the centralized procurement bidding. The 10 mg olanzapine tablets were awarded at a price of RMB 6.23 per tablet, while the 5 mg strength was awarded at RMB 3.57 per tablet. The supply regions include Ningxia, Jiangsu, Henan, Jiangxi, Anhui, Heilongjiang, Yunnan, and Guizhou. The agreed procurement volume for the first year, accounting for 70% of the total demand across these eight provinces (autonomous regions), amounts to RMB 155 million.The 100 mg imatinib mesylate tablets were awarded at a price of RMB 10.38 per tablet. The supply regions include Sichuan, Jiangxi, Heilongjiang, Inner Mongolia, Xinjiang (including the Xinjiang Production and Construction Corps), Shanxi, Liaoning, Ningxia, Qinghai, Henan, Jiangsu, and Hubei. The agreed procurement volume for the first year, representing 60% of the total demand across these twelve provinces (autonomous regions), totals RMB 47.8952 million.With the expansion of the centralized drug procurement program, these two products are expected to secure a combined first-year procurement value of RMB 200 million.

In terms of price reduction, the winning bid price for Olanzapine Tablets (10mg) during the "4+7" pilot program was RMB 9.64 per tablet. In the expanded volume-based procurement, Qilu Pharmaceutical won the bid at RMB 2.48 per tablet, Dr. Reddy's Laboratories (India) at RMB 6.19 per tablet, and Hansoh Pharma at RMB 6.23 per tablet, representing price reductions of 74.27%, 35.79%, and 35.37%, respectively. For Imatinib Mesylate Tablets (100mg), the winning bid price during the "4+7" pilot program was RMB 9.64 per tablet. In the expanded procurement, Chia Tai Tianqing’s capsule formulation won the bid at RMB 9.77 per capsule, while Hansoh Pharma’s tablet formulation won at RMB 10.38 per tablet, with price reductions of 6.06% and 0.19%, respectively. Hansoh Pharma’s bids for both products were lower than the "4+7" winning prices; however, compared to the "ultra-low prices" offered by other companies, its pricing remained relatively "conservative," with less aggressive price cuts. Following its success in securing contracts in the "4+7" cities and 25 provinces (autonomous regions), Hansoh Pharma’s market position for these two major products is expected to steadily improve.

Blockbuster Launch in the Second Half: New Antiemetic Injection Imminently Hitting the Market

The semi-annual report stated that Hansoh Pharma’s R&D expenditure amounted to RMB 558 million, a year-on-year increase of 53.8%, accounting for 12.1% of the company’s revenue. On one hand, the company continued to increase its investment in independent R&D, with sustained growth in clinical trial expenses for innovative drugs; on the other hand, it introduced internationally advanced products through collaborations, with related technology licensing expenditures totaling approximately RMB 100 million during the reporting period.

Table 3: Hansoh Pharma’s Approved Products in H1 2019

(Source: Menet MED China Drug Evaluation Database 2.0)

In May 2019, Hansoh Pharma’s Class 1 innovative drug, the long-acting GLP-1 receptor agonist FulaiMei (pegylated loxenatide injection), was approved for marketing. With demonstrated efficacy in glucose lowering, a high safety profile, and a convenient once-weekly dosing regimen, it has become a new and improved therapeutic option for patients with diabetes.

In addition, the generic versions of apixaban tablets and vildagliptin tablets (Class 6) were approved for production, marking the first domestic generics for both products and deemed to have passed the consistency evaluation; meanwhile, cefdinir capsules became the first product to pass the consistency evaluation.

Notably, the Class 3 generic marketing application for Hansoh Pharma’s Fosaprepitant Dimeglumine for Injection (CYHS1600208) is currently at the stage of “Approval Completed – Pending Certificate Issuance,” indicating that approval is expected in the near future. The originator of this product is Merck & Co. Fosaprepitant is a phosphate prodrug of aprepitant and, like aprepitant, belongs to the class of highly selective human substance P/neurokinin-1 (NK-1) receptor antagonists. It works primarily by blocking nausea and vomiting signals in the brain and is used as an adjunctive medication during chemotherapy to prevent chemotherapy-induced nausea and vomiting (CINV). The originator product was approved by the U.S. FDA in January 2008 and by the European Medicines Agency (EMA) in November of the same year. On September 4, 2019, Chia Tai Tianqing Pharmaceutical Group’s Class 3.1 marketing application for Fosaprepitant Dimeglumine for Injection was approved. Currently, Qilu Pharmaceutical’s Class 3 generic application is under review and approval.

Table 4: Status of Products Under Review by Hansoh Pharma Since 2019

(Source: MENET MED China Drug Review Database 2.0)

In April 2019, Hansoh Pharma’s innovative third-generation epidermal growth factor receptor (EGFR) inhibitor, almonertinib tablets, was submitted for marketing approval and included in the priority review program. It is indicated for the treatment of patients with non-small cell lung cancer (NSCLC) harboring EGFR T790M mutations, and is expected to significantly extend overall survival in eligible patients upon market launch. Another innovative drug, HS-10342, received implicit approval for its investigational new drug application and is currently undergoing Phase I clinical trials. In addition, marketing applications under Class 4 generic drug regulations were submitted for paliperidone extended-release tablets and dabigatran etexilate mesylate capsules.

Hansoh Pharma also disclosed that its innovative drug, flumatinib, has completed all technical reviews and is expected to receive approval within the year. As a second-generation Bcr-Abl tyrosine kinase inhibitor (TKI) for the treatment of chronic myeloid leukemia (CML), flumatinib has demonstrated superior efficacy compared to imatinib in existing clinical trials. Furthermore, no pleural effusion or cardiotoxicity—adverse events associated with other second-generation agents—have been observed, indicating a more favorable safety profile. Another innovative drug, HS-10234, is expected to have its New Drug Application submitted next year. Designed for the treatment of hepatitis B, HS-10234 is a prodrug of tenofovir (PMPA) that rapidly converts into its active metabolite, tenofovir diphosphate (PMPApp), in vivo. It exhibits high stability in plasma, thereby enhancing therapeutic efficacy while significantly reducing toxic side effects.

In addition to its internal R&D investments, Hansoh Pharma is also actively seeking external collaboration and acquisition opportunities. In May 2019, the Company entered into a collaboration agreement with Viela Bio, Inc. for the development of inebilizumab, a CD19 monoclonal antibody, in China for the treatment of neuromyelitis optica spectrum disorders (NMOSD) and other autoimmune diseases and hematologic malignancies. With a robust pipeline of new products in development, Hansoh Pharma’s future performance holds significant promise.

Source: Menet Database, Announcements of Listed Companies

Review data statistics are as of October 12. Corrections and additions are welcome.