Can Oral Insulin's China Strategy Rewrite the Century-Long Battle Among Diabetes Giants?

As one of the oldest biopharmaceuticals, insulin was the first recombinant protein drug, marking a milestone in both human health and new drug development. The history of insulin is also a compelling story. It features the stubbornness of individuals intertwined with twists of fate, the rise, mergers, and splits of key companies, as well as commercial greed and gaming. Yet, innovation has no endpoint.

Currently, third-generation insulins account for over 80% of the global insulin market, which is valued at $23 billion. New focal points in the field include once-weekly insulin administration and oral insulin. Companies developing oral insulin have established collaborations with Chinese biotechnology firms; once these products reach the market, diabetic patients in China will be the first to access the new therapies.

The journey of oral insulin from concept to clinical application has been fraught with challenges. While a select few companies have reported positive results, many other diabetes-focused firms have stumbled in their arduous R&D endeavors. Meanwhile, the United States, as a global healthcare hub and bellwether, has remained mired in the predicament of steadily rising insulin prices, necessitating administrative intervention. However, the emergence of several new insulin technologies in the first quarter of 2019 has finally offered a glimmer of hope for progress.

Notably, in March 2019, Novo Nordisk, the biopharmaceutical company that had previously suffered a major setback in its oral insulin development efforts, regrouped and submitted an application to the U.S. Food and Drug Administration (FDA) for approval of oral semaglutide to reduce the risk of major adverse cardiovascular events (MACE) in patients with type 2 diabetes.

Moreover, developments in China’s diabetes market have also drawn significant attention. Due to disparities in treatment standards and market access barriers, the domestic diabetes pharmaceutical market differs markedly from the global landscape: within medical institutions, various drug classes hold comparable market shares, whereas in the retail sector, oral hypoglycemic agents dominate. During the first quarter of 2019, which saw a surge in new insulin technologies, some companies targeted entry points into the Chinese market, aiming to leverage domestic enterprises as a conduit to penetrate new markets.

To this end, VCBeat (WeChat Official Account: vcbeat) has reviewed the momentous origins of insulin and its latest advancements. And a good story should begin with the introduction of key figures.

In 1869, the German pathologist Paul Langerhans (1847–1888) discovered the pancreatic islets, which were subsequently named the “Islets of Langerhans.” At that time, Langerhans believed them to be a type of nerve cell. In 1910, the British physiologist Edward Albert Sharpey-Schafer (1850–1935), through his research, proposed that diabetes resulted from the deficiency of a substance secreted by the pancreas under normal conditions, and he named this substance “Insula.”

Until 1917, Frederick Banting, having returned to his homeland from World War I, opened a clinic to make a living and simultaneously held a position at a medical school to supplement his household income. In 1920, while preparing lectures, Banting came across a case report in which he observed that a patient’s digestive glands, which secrete digestive enzymes, had atrophied due to pancreatic duct obstruction by calculi, yet the islet cells remained well-preserved. Greatly inspired by this finding, Banting hypothesized that if the pancreatic ducts in animals were surgically ligated, active insulin could be extracted once the digestive glands had degenerated.

At that time, Banting was full of ambition. He resolutely quit all his jobs without securing another position and returned to his alma mater, the University of Toronto, to seek assistance from Professor Macleod, a leading authority on diabetes. Macleod was dismissive of this rash young man’s ideas but eventually yielded to Banting’s persistence.

Ultimately, Banting secured a laboratory and ten dogs as experimental subjects, and the college assigned him a young assistant, Charles Best.

Before the actual discovery of insulin, diabetes was a widespread and life-threatening disease. Patients had no choice but to undergo starvation therapy, the efficacy of which was uncertain. Meanwhile, numerous scientists attempted to extract insulin from the pancreas, but all failed because insulin was degraded by digestive enzymes upon the disruption of the pancreatic tissue.

However, a turning point occurred in Banting and Best’s experiments when a test dog’s blood glucose levels returned to normal after an insulin injection. Subsequently, the two researchers purchased bovine pancreases to replicate the experiment, directly treating them with acidified alcohol to destroy digestive enzymes and prevent insulin degradation. They even injected themselves with bovine insulin to demonstrate its safety.

Subsequently, Banting’s classmate, Leonard Thompson, sought help as his diabetes worsened. Banting and Best administered bovine insulin to him, and Thompson’s condition rapidly improved—marking the first successful experiment. However, their supply of prepared insulin was exhausted at that time. Coincidentally, news of this breakthrough reached Macleod, who recognized its significance and mobilized all available resources to advance insulin research. Banting and Best were not working in isolation; James Collip, a biochemist at the University of Toronto laboratory, further purified the bovine insulin.

Notably, several scientists filed for patents and assigned the patent rights to the University of Toronto for a nominal fee of one dollar per person; meanwhile, to facilitate broader adoption, they licensed the patents to multiple companies, including Eli Lilly and Novo Nordisk, for commercial production.

Insulin thus moved from the laboratory to the commercial market.

When Eli Lilly launched the first commercialized insulin in 1923, Novo Nordisk, which would later become a renowned pharmaceutical giant, was still in its early stages.

In 1922, August Krogh, a Nobel laureate in Physiology or Medicine, and his wife, Marie Krogh, who held a medical doctorate, were invited to visit Yale University. There, they happened to hear a report on the treatment of diabetes using bovine pancreatic extracts by Banting and Best. Marie Krogh took a keen interest in this development, as she herself was a patient with type 2 diabetes. The couple promptly wrote to Macleod to initiate discussions. After securing the licensing agreement for the production and sale of pancreatic extracts in the Nordic region, they collaborated with Dr. Hans Christian Hagedorn to establish the Nordisk Insulin Laboratory. In the spring of 1923, the first diabetic patient received an injection of insulin produced by this laboratory. Subsequently, the Nordisk Insulin Laboratory began marketing the insulin product, and that year is recognized as the founding year of Novo Nordisk.

The primary challenge facing Novo Nordisk at its inception was determining who would oversee the manufacturing of insulin production equipment. Harald Pedersen, a mechanic with a rare talent for invention who joined Novo Nordisk in 1924, emerged as the preferred candidate.

Surprisingly, Harald Pedersen and Hans Christian Hagedorn were constantly at odds, leading Pedersen to resign in anger. He took with him his younger brother, Thorvald Pedersen, a pharmacist who had previously been responsible at Novo for analyzing the chemical preparation processes related to insulin production. The two brothers began developing their own insulin, and in 1924, they successfully prepared a stable liquid formulation of insulin. Harald Pedersen invented the Novo Syringe, an insulin syringe that remains in use to this day.

Initially, the Pedersen brothers sought to reconcile with Nordisk and bring their insulin products to market. However, Nordisk refused to forgive the two “traitorous” defectors. Consequently, the brothers embarked on an independent venture, naming their company Novo Terapeutisk Laboratorium to sell Novo-developed insulin and Novo syringes, ultimately surpassing Nordisk.

Since then, the two insulin companies embarked on decades of competition. Novo Nordisk achieved continuous breakthroughs in new product development. In 1936, Hans Christian Hagedorn and Norman Jensen discovered that protamine could delay the release of insulin. Neutral Protamine Hagedorn (NPH) was subsequently launched in 1946 and named after Hans Christian Hagedorn.

Hans Christian Hagedorn failed to surpass his long-standing rival; Nord’s overall market performance consistently lagged slightly behind that of Novo. By 1989, if the world’s insulin manufacturers were ranked, Nord would have placed third, with Novo in second place.

At this juncture, insulin transitioned from the animal-derived stage to the recombinant human insulin stage, driven by the interplay of technology and market forces among major pharmaceutical companies. The competition among these industry giants also intensified to a fever pitch.

Finally, a dramatic twist emerged. For strategic reasons, the two companies ultimately “shook hands and made peace,” merging to form an entirely new entity: Novo Nordisk. Thus, the world’s largest insulin producer was born, and this market landscape has endured to this day.

Novo Nordisk did not halt its development momentum after entering the 21st century. During this period, sales growth of recombinant human insulin gradually stagnated, with its market share declining from 90% in 2000 to 14% in 2015. Novo Nordisk needed to innovate insulin delivery methods while addressing challenges posed by diabetes giants from other regions and the emergence of novel insulin administration technologies.

In fact, since the commercialization of insulin, injectable administration has dominated the insulin market. In 1924, the second year after the establishment of Novo Nordisk Laboratories, the concept of oral insulin emerged in professional literature due to the inconvenience and pain associated with injections. However, despite the scientific community’s continuous efforts to overcome technical challenges, diabetic patients worldwide still face not only the ongoing struggle against the disease itself but also the inconvenience of current delivery methods and the fear of injections.

This situation saw a turning point after entering the 21st century.

In 2006, the biopharmaceutical company Oramed Pharmaceuticals (NASDAQ: ORMP) was established at the Hadassah University Medical Center in Jerusalem, Israel, drawing significant attention for its breakthroughs in oral insulin technology. In 2015, Oramed Pharmaceuticals entered into a strategic partnership with Hefei Tianhui Incubation Technologies Co., Ltd. (HTIT) and secured a $50 million investment to support the development of its revolutionary flagship product, the oral insulin capsule (ORMD-0801), which had completed Phase IIb clinical trials that year.

However, in 2016, Novo Nordisk suddenly announced the cancellation of its development program for the oral insulin candidate I338, despite the successful completion of Phase II clinical trials for this insulin tablet. Industry speculation persisted that Novo Nordisk was compelled to abandon the R&D program due to the high barriers associated with drug manufacturing and tight financial budgets. Also in that year, the insulin pen, spearheaded by Novo Nordisk, replaced the insulin pump as the mainstream delivery device. Statistics indicate that the majority of insulin users—approximately 70% to 93%, varying by data source and geographic region—are using insulin pens, thereby eliminating the cumbersome process of drawing insulin from vials using syringes.

With Novo Nordisk’s withdrawal, oral insulin has moved further away from market launch. Currently, only two companies worldwide continue to深耕 this field: Oramed Pharmaceuticals and Diasome Pharmaceuticals, a biopharmaceutical company based in Ohio, USA. Diasome’s oral insulin candidate, HDV-I, utilizes hepatocyte-targeting liposomes to deliver insulin directly to the liver, thereby lowering blood glucose levels by promoting hepatic glucose uptake. HDV-I is currently undergoing Phase III clinical trials.

A New Wave of Breakthroughs Emerges. By 2019, oral insulin technology, which had once fallen into silence, experienced a surge in the first quarter.

On February 13, 2019, researchers at the Massachusetts Institute of Technology (MIT) in the United States cleverly applied bionic design principles based on the balance mechanism of leopard tortoises to develop a new device for oral insulin administration.

In March, San Jose, California-based Rani Therapeutics announced the completion of the first-in-human trial of its robotic capsule, RaniPill. This capsule is designed to deliver injectable biologic therapies from within the gastrointestinal tract, thereby replacing ex vivo injections of biologics. Mir Imran, Chairman and CEO of Rani Therapeutics, stated that human testing of the RaniPill capsule using octreotide (a medication for treating acromegaly) would be conducted in the coming months. If the trials prove successful, the capsule is also expected to become a novel oral delivery vehicle for insulin.

In addition to oral insulin, other insulin-based technological reforms and innovative therapies have also come into public view.

On February 14, 2019, the U.S. Food and Drug Administration (FDA) granted marketing authorization for the t:slim X2, the world’s first insulin pump featuring interoperable technology. Manufactured by Tandem Diabetes Care, this insulin pump is indicated for subcutaneous insulin delivery in children and adults with diabetes. Furthermore, the device supports patients in customizing their diabetes management equipment according to individual preferences.

That month, the University of Geneva (UNIGE) announced a new breakthrough in diabetes therapy: researchers have successfully converted other pancreatic cells into insulin-secreting cells, demonstrating potential for curing diabetes in mouse models.

However, it should be noted that the aforementioned new technologies emerging in 2019 are currently still in the preliminary trial stage. Compared with the relatively mature technologies of Oramed Pharmaceuticals and Diasome Pharmaceuticals in this field, these technologies have not yet reached a level where they can compete. Nevertheless, compared to insulin injection, oral administration holds an irresistible appeal for patients, including enhanced patient comfort and medication adherence, reduced risk of infection, simplified application in pediatric care, first-pass metabolism before systemic exposure, and cost-effectiveness. These advantages make oral administration the most preferred route of drug delivery. Once it truly enters the market, its coverage potential cannot be underestimated.

However, diabetic patients are dissatisfied with their current treatment status. This predominantly negative public sentiment will eventually coalesce into an undercurrent, or even a storm, thereby influencing the market trajectory of insulin.

Given that the four pioneers of insulin transferred their patent rights for a symbolic price of one dollar each, the current high cost of medical insulin stands in stark contrast to this historical legacy. Taking Eli Lilly’s Humalog as an example, its price has surged from $21 in 1996 to $275 today, representing a 13-fold increase. Currently, three 10-mL vials of insulin cost $822 (approximately RMB 5,754), a burden that even U.S. health insurance programs struggle to bear.

Alongside rising drug prices, the global number of diabetes patients is also increasing. According to the 2017 IDF Diabetes Atlas published by the International Diabetes Federation, the number of people with diabetes is projected to reach 629 million by 2045. In 2017, sales of the 18 original insulin products in the seven major global pharmaceutical markets amounted to $22.141 billion. Based on this estimate, when including generic drug sales, the global insulin market has exceeded $35 billion, accounting for half of the diabetes treatment market.

Amid the hyperbolic outcry that “insulin prices are catching up with housing prices,” Eli Lilly, as a “scapegoat” among pharmaceutical companies, quickly became the target of public criticism.

On one hand, diabetic patients with only affordable health insurance are suffering immensely; on the other hand, insulin prices from major diabetes pharmaceutical giants continue to rise. The American Diabetes Association even called on the U.S. Congress earlier this year to intervene and control insulin prices by continuously pressuring major insulin manufacturers.

In fact, beyond factors related to the health insurance system, there are other drivers behind the high price of insulin:

Eli Lilly unfortunately became one of the first targets in Congress’s effort to “make an example of” a company. Competitors’ “backstabbing” also arrived in a timely and convenient manner. On April 9, 2019, Sanofi, the later-emerging dominant player in the insulin market, announced an expansion of its year-old “Insulins Valyou Savings Program,” which would reduce the price of some of the company’s insulin products to $99 per month. Sanofi stated that, starting in June, Americans could purchase up to 10 packs of injection pens or 10 mL vials of injectable solution for $99 per month; however, the Insulins Valyou Savings Program does not cover Sanofi’s combination insulin products.

Besieged on all fronts, Eli Lilly found itself compelled to slash prices. However, given the exorbitant R&D and clinical trial costs behind its drugs, cutting prices on its own insulin would likely do more harm than good. Thus, Eli Lilly adopted a strategy learned from Sanofi.

Following Sanofi’s launch of its insulin program, Eli Lilly began selling authorized generic versions of recombinant insulin lispro (Humalog U100) at less than half the original price. The generic product is priced at $137.35 per vial, with a five-vial pack priced at $265.20. The new product will be marketed under the name Insulin Lispro and sold through an Eli Lilly subsidiary.

Given that Sanofi’s voluntary insulin pricing initiative would inevitably trigger a chain reaction of price reductions, Eli Lilly’s strategy of introducing its own authorized generics has left independent insulin biosimilars with no viable pathway into the mainstream market, thereby further consolidating Eli Lilly’s monopoly in the insulin sector.

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On the other hand, a vast market remains to be tapped. According to statistics, the global number of people with diabetes was approximately 425 million in 2017, with China having the largest diabetic population worldwide at 114 million that year. This figure is projected to reach around 150 million by 2045. Currently, some companies are already making strategic moves behind the scenes.

It is reported that on March 27, 2019, Oramed Pharmaceuticals’ oral insulin capsule (ORMD-0801) received approval from the China National Medical Products Administration (NMPA), paving the way for clinical trials in China. This development signals that oral insulin may soon become available to the vast population of diabetic patients in China. Furthermore, Oramed Pharmaceuticals strives to maximize the impact of its technological innovations. In addition to leveraging HTBT as a strategic partner to enter the Chinese market, the company has secured approval and protection for five patents related to its technology from patent offices in 27 countries worldwide, including Japan, Australia, and New Zealand. As a result, Oramed Pharmaceuticals’ technology has not only been validated but has also established an international foothold for its oral drug delivery platform.

Meanwhile, Diasome Pharmaceuticals has not yet officially released its global market strategic layout for its oral insulin product. In this context, once Oramed Pharmaceuticals’ oral insulin hits the market, it will disrupt the monopoly held by existing global insulin giants, both in terms of pricing and market share. Faced with the pressure of rapid commercialization of new technologies, companies specializing in diabetes care, such as Novo Nordisk, are highly likely to restructure their market strategies by accelerating new drug development and adjusting insulin prices.

At that time, the global insulin market will once again be swept by a new storm of technological and pricing competition.