Domestic Innovative Antidiabetic Drug Dorzagliatin Surpasses RMB 100 Million in Sales, Delivering Strong Post-NHIRL Inclusion Performance

On August 29, Hua Medicine released its interim results for the first half of 2024, with its core product dorzagliatin (brand name: Huatangning^®) achieved sales revenue of RMB 102.7 million, injecting strong momentum into Hua Medicine’s ongoing commercialization efforts.

Dorzagliatin is Hua Medicine’s flagship product in the diabetes sector and the company’s first commercialized product to be successfully included in the National Reimbursement Drug List (NRDL). With the official implementation of the updated NRDL on January 1, 2024, considerable attention has been focused on whether this domestically developed innovative glucose-lowering agent, which had been covered by national medical insurance for only six months, can assume a leading role and withstand market scrutiny.

In China, the market for glucose-lowering drugs is highly competitive. As of November 2023, 26 diabetes medications (comprising 83 product specifications) had been approved for marketing, while 51 products (with 175 acceptance numbers) were under review for production approval. With the continuous launch of novel agents such as DPP-4 inhibitors, SGLT-2 inhibitors, and GLP-1 receptor agonists, the diabetes medication market has undergone structural changes. Meanwhile, domestic pharmaceutical companies are gradually transitioning from generic drugs to original innovative drugs, with Chinese biotech firms like Hua Medicine making significant strides through independent research and development of innovative therapies.

In this fiercely competitive RMB 10 billion market, Hua Medicine’s dorzagliatin has delivered impressive results, not only securing a firm foothold in the highly saturated diabetes sector but also becoming the core engine driving Hua Medicine’s sustained commercialization. As Dr. Chen Li, Founder and CEO of Hua Medicine, stated in his remarks accompanying the financial report: “The first half of 2024 marks another milestone in Hua Medicine’s commercialization journey. The successful inclusion of dorzagliatin in the National Reimbursement Drug List has significantly improved patient access to and affordability of the medication.”

Dorzagliatin is a first-in-class, novel-mechanism, allosteric glucose kinase activator (GKA) independently developed by Hua Medicine based on its original scientific concept of “repairing sensing, restoring homeostasis, and treating diabetes at its source.” Targeting glucose kinase (GK), the body’s blood glucose sensor, this drug acts on organs involved in glucose storage and output—including the pancreatic islets, intestine, and liver—to improve impaired GK function in patients with type 2 diabetes, thereby enhancing β-cell function and reducing insulin resistance. Consequently, it features a mechanism of action that restores the physiological regulation of blood glucose balance, holding promise for controlling the progression of type 2 diabetes and the occurrence of complications at their source.

Approved for marketing in October 2022, dorzagliatin is indicated as monotherapy, or in combination with metformin hydrochloride when glycemic control is inadequate with metformin hydrochloride alone, to improve glycemic control in adult patients with type 2 diabetes mellitus, alongside diet and exercise. Reportedly, this drug is not only the first glucokinase activator (GKA) approved globally but also the first first-in-class innovative drug with a novel mechanism of action in the field of diabetes in the past decade, and the first global first-in-class innovative drug for type 2 diabetes launched in China.

Compared with traditional glucose-lowering drugs, dorzagliatin, based on a novel mechanism for regulating glucose homeostasis, offers advantages such as superior glycemic control, effective postprandial glucose management, a favorable safety profile, and metabolism independent of the kidneys. It also holds potential for inducing diabetes remission, providing a new therapeutic option for many patients with type 2 diabetes.

According to the data disclosed in Hua Medicine's interim performance report,In the first half of 2024, sales volume of Dorzagliatin increased significantly. As of June 30, 2024, a total of 846,000 boxes were sold, generating sales revenue of RMB 102.7 million.Hua Medicine, together with its commercialization partner Bayer and 80 first-tier distributors, is jointly driving the commercialization of the drug, marking its entry into 31 provincial-level pharmaceutical markets across China.

For a new chronic disease medication that has just been included in the national medical insurance list and is still in the phase of hospital adoption and volume ramp-up, achieving such impressive revenue performance is a strong testament to the market’s recognition of dorzagliatin’s mechanism of action and therapeutic efficacy. The sales growth of dorzagliatin is also expected to provide a powerful boost to Hua Medicine’s revenue expansion. Dr. Chen Li further stated that, through sales expansion and operational optimization, the company aims to achieve profitability in 2025.

Hua Medicine, founded in 2011, listed on the Hong Kong Stock Exchange in 2018, launched dorzagliatin in China in 2022, and successfully included the drug in the National Reimbursement Drug List through price negotiations in 2023. It can be said that Hua Medicine has been steadily advancing its commercialization process in a step-by-step manner. Meanwhile, after overcoming the challenges of independently developing dorzagliatin, Hua Medicine continues to expand the product’s overseas influence through clinical data and participation in international academic conferences, and has established a strategic partnership with Bayer, reaching a commercial cooperation agreement for dorzagliatin in China.

Currently, the biopharmaceutical industry remains in a phase of capital winter. Given the capital-intensive nature of biotechnology, ample and stable cash flow is particularly critical, serving as the cornerstone for ensuring a company’s continued steady progress.As of June 30, 2024, Hua Medicine’s bank balances and cash amounted to approximately RMB 1.3388 billion, providing a strong financial foundation for its future development.

It can be said that, amid the relatively sluggish pharmaceutical market over the past two years, Hua Medicine has advanced steadily with each step, achieving growth against the trend and demonstrating the strategic vision, global perspective, and entrepreneurial resilience expected of an innovative biotech company.

According to data from the International Diabetes Federation, the number of adults with diabetes in China reached 140 million in 2021 and is projected to rise to 160 million by 2030 and 170 million by 2045. According to the "China Diabetes Market Report: 2024-2032" published by RESEARCH AND MARKETS, the size of China's diabetes market reached $4.7 billion in 2023 and is expected to grow to $9.3 billion by 2032, reflecting a compound annual growth rate (CAGR) of 7.9%.

Dorzagliatin’s sales revenue in the first half of this year has surpassed RMB 100 million. With the further expansion of the diabetes market size and the support from the National Reimbursement Drug List, its future sales explosion is highly anticipated.

Whether for innovative glucose-lowering drugs or domestically developed innovative pharmaceuticals, the revenue growth observed after inclusion in the National Reimbursement Drug List has provided a model for the development trajectory of dorzagliatin.

Merck’s original antidiabetic drug, Janumet (sitagliptin/metformin)^®For example, sitagliptin/metformin is a fixed-dose combination of the DPP-4 inhibitor sitagliptin and metformin. It is indicated, in conjunction with diet and exercise, for patients with type 2 diabetes whose glycemic control remains inadequate on metformin monotherapy or who are already receiving combination therapy with both agents. In 2023, the drug achieved sales of RMB 734 million, securing a place among the top 10 oral antidiabetic drugs by sales volume in tiered hospitals across China.

In 2013, Merck & Co.’s sitagliptin/metformin tablets were approved in China. In 2019, the drug was officially included in the National Reimbursement Drug List (NRDL). Data from the Sinohealth Kasi System shows that in the first year of its inclusion in the NRDL, sales revenue for sitagliptin/metformin tablets in tiered hospitals reached RMB 93 million. By 2020, sales revenue in tiered hospitals had surpassed RMB 200 million, representing a year-on-year increase of 119%. From its initial inclusion in the NRDL in 2019 through 2023, sales revenue for sitagliptin/metformin in tiered hospitals was RMB 93 million, RMB 204 million, RMB 488 million, RMB 617 million, and RMB 734 million, respectively, marking a nearly seven-fold increase over five years.

Hua Medicine’s 2024 interim report stated that the production capacity for dorzagliatin will continue to expand, with an annual output of 3 million boxes expected in 2024. The company has established a new manufacturing process with greater capacity in collaboration with its partners, which is currently undergoing regulatory review by the production licensing authorities.

This implies that, with the expansion of production capacity, there is still significant room for growth in the sales revenue of Dorzagliatin in the second half of 2024 in the short term. In the long term, the drug’s future growth momentum will be further consolidated, its accessibility will be substantially improved, and a notable increase in volume is expected.

Let us further examine the volume expansion and sales performance of domestically developed innovative drugs after their inclusion in the National Reimbursement Drug List (NRDL). Taking Ascentage Pharma’s olverembatinib as an example, this drug is China’s first and currently only approved third-generation BCR-ABL inhibitor. It was approved for marketing in China in November 2021 and was included in the National NRDL in January 2023. According to Ascentage Pharma’s financial reports for 2022, 2023, and the first half of 2024, the cumulative tax-inclusive sales revenue of olverembatinib from its market approval until December 31, 2022, amounted to RMB 182 million. After being included in the NRDL, the cumulative sales revenue of olverembatinib reached RMB 362 million in 2023, representing a twofold increase. The interim results for the first half of 2024 showed that olverembatinib achieved sales revenue of RMB 113 million, marking a 120% quarter-on-quarter growth and a 5% year-on-year increase.

As a domestically developed original drug, Dorzagliatin operates within the vast and expanding diabetes market, and its future potential should not be underestimated.

Certainly,Product sales and growth are inseparable from the support of national policies.During the national medical insurance negotiations at the end of 2023, the National Healthcare Security Administration (NHSA) provided significant policy support for the inclusion of innovative drugs in the National Reimbursement Drug List (NRDL), establishing a comprehensive support mechanism covering all stages—from coverage assessment, application, review, and actuarial calculation to negotiation. These national policies, which encourage domestic innovative pharmaceutical companies and originator drugs, not only safeguard basic societal healthcare needs but also ensure reasonable returns for enterprises. This favorable policy environment enabled Hua Medicine to successfully secure NRDL inclusion.

Following its inclusion in the National Reimbursement Drug List (NRDL), and benefiting from government policies supporting market access for innovative drugs, Hua Medicine’s dorzagliatin has accelerated its entry into hospitals in Shanghai, Beijing, Tianjin, and other regions. Prescription sales of dorzagliatin have already been launched at more than 2,100 hospitals and over 2,900 pharmacies.

In addition,Local governments have also provided substantial policy support for innovative drugs.Taking Shanghai, where Hua Medicine is based, as an example, the General Office of the Shanghai Municipal People’s Government recently issued the “Several Opinions on Supporting Full-Chain Innovative Development of the Biopharmaceutical Industry.” The document stipulates that for innovative drugs included in the National Reimbursement Drug List and Shanghai’s “New and Superior Drugs and Medical Devices” catalog, hospitals in Shanghai must convene a Pharmacy and Therapeutics Committee meeting within one month to approve their entry into hospital use. Furthermore, these innovative drugs will be excluded from the drug proportion metric for three years after entering hospitals, with separate budgetary allocations under medical insurance payments. These policy “green lights” have created substantial opportunities for innovative drugs such as dorzagliatin to rapidly access the hospital market.

Strong therapeutic efficacy and substantial market demand are critical factors enabling a drug to access broader markets, while diversifying its application scenarios is expected to further raise the market ceiling.

The inclusion of dorzagliatin in the National Reimbursement Drug List is not the endpoint Hua Medicine has planned for this product. Clinical research progress in the first half of 2024 shows that Hua Medicine is pursuing deeper and broader R&D and commercialization strategies.

In terms of combination therapy, Hua Medicine is advancing post-marketing real-world studies of dorzagliatin in patients with type 2 diabetes., including the HMM0601 and HMM0701 studies in mainland China, as well as the HMM0123 study in Hong Kong, China. In these studies,The Company is continuously accumulating clinical data on dorzagliatin monotherapy, as well as its combination therapy with metformin, DPP-4 inhibitors, SGLT-2 inhibitors, GLP-1 RAs, and insulin., to optimize the clinical evidence for glucose homeostasis therapy and provide new evidence to expand the indications of dorzagliatin in areas such as diabetes prevention and remission.

Meanwhile, Hua Medicine is also developing fixed-dose combination formulations to enrich its drug development pipeline. Currently, the fixed-dose combination of dorzagliatin and metformin has entered the process validation stage, and Hua Medicine expects to launch a new drug for the treatment of type 2 diabetes in 2028.

The future development of glucose-lowering drugs cannot be separated from the continuous expansion of indications, and Hua Medicine has made in-depth strategic arrangements in this area. At the 2024 American Diabetes Association (ADA) Scientific Sessions, Hua Medicine reported progress in multiple basic and clinical studies. One study showed that dorzagliatin combined with SGLT-2 inhibitors can improve glycemic control, with the combination therapy demonstrating superior efficacy compared to either agent used alone. The findings also suggest that dorzagliatin holds promise for new indications, particularly in combination with SGLT-2 inhibitors such as empagliflozin and other medications for chronic kidney disease, for the treatment of patients with advanced diabetic nephropathy. AndThe Company is also exploring additional therapeutic opportunities for dorzagliatin in fields such as nephropathy, neuropathy-related diseases, ophthalmic disorders, cognitive impairment, and cancer.

Furthermore, it is worth noting thatIn the newly released 10th edition of Internal Medicine, glucokinase activators (GKAs), represented by dorzagliatin, are included for the first time as a novel class of oral glucose-lowering agents in the national planned textbook for five-year undergraduate clinical medicine programs at higher education institutions. This inclusion fully affirms the new role of GKA-based innovative drugs in the management of type 2 diabetes and helps enhance awareness and adoption of these novel agents among physicians.

As market recognition of Hua Medicine’s dorzagliatin continues to grow, the company stands at a new starting point in the field of diabetes treatment. Leveraging its innovative glucokinase activator (GKA) mechanism and positive progress in clinical studies, dorzagliatin will unlock broader market opportunities for Hua Medicine and deliver greater benefits to patients.