Shanghai-based firm plans to spend close to US$200m to bring ‘first-in-class’ diabetes medication to market by 2020
China’s Hua Medicine is conducting the last phase of clinical trial of its breakthrough diabetes drug and that an IPO in Hong Kong is possible after the bourse operator relaxed listing rules for biotechnology firms, according to its chief executive.
“Hua is working towards what may be the first commercialisation of a first-in-class drug in China,” Chen Li told the South China Morning Post on the sidelines of the JP Morgan Healthcare Conference in San Francisco this week.
Chen, a former China chief scientific officer at Swiss pharmaceutical giant Roche, said the company has obtained global patents on its drug and plans to spend about US$200 million to bring the product to the market by 2020.
The clinical trial involves 1,500 patients across China, which has 26 per cent of the world’s estimated 422 million diabetics.
Hua licensed Roche’s diabetes know-how in 2011 for further development.
The Shanghai-based firm, which is in the midst of its fourth round of private share sale, is also studying a potential stock market listing in Hong Kong or New York after having raised US$100 million between 2011 and 2016.
Bourse operator Hong Kong Exchanges and Clearing last month said it would allow biotechnology firms to list, provided they have a market capitalisation of at least HK$1.5 billion and have registered or applied for multiple patents.
They must also have at least one product that has passed drug regulators’ review of their first-phase clinical trial on safety and efficacy, with permission to start second-phase trial.
“We are working on the next round and in the next two years, we will have multiple fundraising exercises,” he told the South China Morning Post on the sidelines of the JP Morgan Healthcare Conference in San Francisco.
Hua last month hired former Bank of America Merrill Lynch investment banking veteran George Lin as its chief financial officer.
Chen said that as Chinese pharmaceutical companies have increased their research and development spend in the last few years, this has helped to narrow the gap with the US where over 70 per cent of the world’s innovative drugs are first commercialised.
While international rivals are also developing diabetes drugs, he claims Hua is at least five years ahead of them since the former have yet to announce clinical trials on a drug with similar efficacy.
Hua’s drug Dorzagliatin helps Type 2 diabetes patients regain control of blood sugar equilibrium, by working on an enzyme that acts as a “glucose sensor” regulating the body’s carbohydrate metabolism. Existing drugs have side effects and deficiency in glucose control in some patients.
Hua aims to market the drug in China in 2020 and targets to have about US$3 billion of sales in 2025, or 15 per cent of China’s diabetes drug market worth US$20 billion that year as forecast in a Morgan Stanley research report, Chen said.
China is the world’s second-largest pharmaceutical market after the US.
It plans to contract out future manufacturing to Wuxi AppTec, one of its shareholders. Fidelity International-owned Eight Roads Ventures, California-based venture capital firms Arch Venture Partners and Venrock Healthcare Capital partners have also invested in Hua Medicine.
Source: South China Morning Post