Yangzijiang's Fifth Class 1.1 TCM New Drug Enters Clinical Trials to Capture 270 Billion Yuan Market
BEIJING — Yangzijiang Pharmaceutical Group has secured clinical trial approval for its fifth traditional Chinese medicine (TCM) Class 1.1 new drug, a move that positions the pharmaceutical company to capture a share of China's nearly 270 billion yuan ($37 billion) hospital TCM market.
The Center for Drug Evaluation (CDE) approved ZYY-768 granules for clinical studies on June 17, according to official records. The application, submitted on April 1, received regulatory clearance in just two and a half months—a timeline that underscores both the drug's promising profile and China's accelerating approval pathway for innovative TCM therapies.
ZYY-768 granules are being developed to treat non-erosive reflux disease with spleen deficiency and damp-heat syndrome, a condition affecting millions of patients across China. The drug represents Yangzijiang's latest push into TCM innovation, a strategic bet on a market segment that generated nearly 270 billion yuan in hospital sales during 2025, according to MoSheng Pharma's terminal hospital database.
In the first quarter of 2026 alone, Chinese patent medicines brought in over 57 billion yuan in hospital revenue, signaling sustained demand for traditional remedies backed by modern clinical validation.
A Pipeline Taking Shape
Yangzijiang has assembled a tiered TCM pipeline, with five Class 1.1 new drugs now cleared for clinical trials. The lineup includes ZGZHR-061 granules, ZYY-742 gel, Qingchang Wenzhong tablets, Qinqiao Yanshu granules, and the newly approved ZYY-768 granules. Each targets distinct therapeutic areas, reflecting the company's ambition to build a diversified portfolio of original TCM innovations.
The company's broader pharmaceutical pipeline has already yielded four Class 1 new drugs that have reached the market. The most recent, fazanleson tablets (法赞雷生片), won approval on May 21, 2026—a milestone that marks Yangzijiang's entry into the competitive insomnia treatment space.
Breaking Foreign Dominance in Insomnia Treatment
Fazanleson tablets represent a significant breakthrough: the first domestically developed dual orexin receptor antagonist (DORA) for insomnia treatment in China. Until now, the DORA market had been dominated by imported therapies, including Eisai's lemborexant, approved in May 2025, and daridorexant from Idorsia Pharmaceuticals and Simcere Pharmaceutical.
DORA-class drugs work by blocking orexin from binding to its receptors, effectively dampening overactive arousal pathways in the brain. Unlike traditional sedative-hypnotics, these agents help patients fall and stay asleep without disrupting sleep architecture—and without the addiction risks that have long plagued insomnia treatment.
The clinical data supporting fazanleson tablets are robust. A Phase III trial involving 1,034 patients demonstrated rapid onset of action and a favorable safety profile, according to company disclosures. The drug's approval fills a critical gap in China's insomnia treatment landscape, offering a new option for the estimated 300 million Chinese adults who struggle with sleep disorders.
A Global Opportunity
The addressable market for insomnia therapies extends well beyond China's borders. Globally, more than 850 million people have been diagnosed with insomnia, creating a substantial patient pool for new treatments. The worldwide insomnia drug market was valued at approximately $2.95 billion in 2025 and is projected to reach $4.62 billion by 2034, according to industry estimates.
For Yangzijiang, the dual focus on TCM innovation and Western-style drug development reflects a broader trend among Chinese pharmaceutical companies: leveraging traditional medicine expertise while competing in cutting-edge therapeutic categories. With five TCM candidates in clinical development and a newly approved insomnia drug in hand, the company is positioning itself to compete on multiple fronts in one of China's most lucrative healthcare markets.