EQS Newswire: Sihuan Pharmaceutical Holdings Group: Chinese Self-Developed IDegAsp Debuts! Huisheng Pharm Strives To Be Diabetes Drug Bellwether With Blockbuster Drugs in Going Global

EQS Newswire / 12/08/2024 / 14:52 UTC+8

1.Promising future growth of Huisheng with the launch of IDegAsp

On the noon of August 6th, Sihuan Pharmaceutical Holdings Group (00460. HK) (thereafter referred to as Sihuan Pharm) announced that its subsidiary, Huisheng Biopharmaceutical Co. Ltd. (thereafter referred to as Huisheng Pharm)'s self-developed Insulin Degludec/Insulin Aspart Injection (IDegAsp) (Chinese trade name: Huiyoujia) was approved to be marketed for the treatment of adult type 2 diabetes, and is the first domestically-produced biosmilar drug of IDegAsp being approved after the original drug Novo Nordisk.

As a new generation insulin preparation, IDegAsp is composed of 70% insulin degludec and 30% insulin aspart, making it the world's first soluble dual insulin preparation composed of long-acting and fast acting insulin analogues.

Compared to traditional premixed insulin preparations, IDegAsp has demonstrated superior efficacy, which is more safe, cost-effective, and easier to operate in multiple clinical studies.

In terms of efficacy and safety, insulin degludec can provide continuous coverage for 24 hours, effectively controlling fasting blood glucose levels, while insulin aspart can quickly reduce postprandial blood glucose. Both maintain their respective pharmacokinetic properties in the body, complement each other's advantages, reduce the potential effects of different components in traditional premixed insulin preparations, thereby reducing the risk of hypoglycemia for patients in a more effective way with a higher safety compliance rate;

In terms of economy and operability, IDegAsp features less injection frequency, which can reduce the treatment cost and psychological burden of patients, and is more economical; No mixing is required before injection as well, avoiding the uneven medication through simplifying usage.

From a professional point of view, as a Category B drug under the National Reimbursement Drug List in China, IDegAsp has also been recommended and highly recognized by a large number of domestic and international guidelines and consensus, and can be used throughout the whole process treatment of type 2 diabetes mellitus.

The writer believes that this breakthrough achievement provides better glucose control drugs for domestic patients, and even marks a major progress in the field of domestic diabetes drugs. It not only indicates the company's leading position in the field of diabetes treatment, but also injects new vitality into the performance growth of Huisheng Pharm and Sihuan Pharm.

The achievement is also reflected in the company's market performance. Data from Futubull shows that on the day of the announcement, the stock price of Sihuan Pharm rose up by 8% at most, which fully reflected the market's recognition of the commercial potential of the product.

However, it is worth noting that Huisheng Pharm boasts advantages and competitiveness beyond just this IDegAsp.

Currently, Huisheng Pharm holds more than 30 products, including second-generation, third-generation, fourth generation insulin, various oral hypoglycemic drugs, complication drugs, etc. It is a domestic company that has achieved full product coverage in the field of diabetes and complications, and can meet different market demands.

After experiencing early sedimentation and accumulation, the company has accelerated in the past two years the pace of approval and market launch of its heavyweight products.

In addition to the first domestically produced IDegAsp injection approved for market this time, the company's second domestically developed new drug SGLT-2 inhibitor - Category 1 innovative drug Ganagliflozin Proline Tablets (Chinese trade name: Huiyoujing), seven hypoglycemic drugs, including three insulin aspart injections and sitagliptin tablets, and four drugs for complications of diabetes, including mecobalamin tablets and calcium dobesilate capsules, have been approved for marketing, which shows that their market competitiveness in the field of diabetes and complications treatment is continuously strengthening.

Ms. MIAO Guili, CFO of Sihuan Pharm, said, "Huisheng Pharm is carefully incubated by Sihuan Pharm, and it is an intergrated platform for biopharmaceutical research, production and sales and marketing that mainly focusing on the huge therapeutic areas of diabetes and complications. The company's product pipeline contains more than 30 products, covering a full range of second-generation, third-generation, and new-generation insulin represented by Insulin Degludec and IDegAsp. At the same time, the company also has deployed new target drugs such as SGLT-2 inhibitors and GLP-1 receptor agonists, as well as other commonly used hypoglycemic and complication drugs. The company is one of the few companies in China to achieve full product coverage in the field of diabetes and complications. Huisheng Pharm's first self-developed SGLT-2 inhibitor Ganagliflozin Proline Tablets (Huiyoujing), a class 1 innovative drug, obtained approval for marketing on January 16th this year, it is also the second domestically produced SGLT-2 inhibitor class 1 innovative drug approved for market. In addition, the company's self-developed semaglutide injection has been developed with dual indications for glucose lowering and weight loss, and the indication of glucose lowering has finished the patient enrollment in Phase III clinical trials."

More over than that, Huisheng Pharm has also proactively constructed amidst continuously innovating a full industry chain model that integrates research and development, production, and sales.

In the production field, Huisheng Pharm designs, constructs, and operates high-level production facilities with international standards. Currently, it has a production base with a capacity of 25 million insulin units and plans to build a base with a production capacity of over 100 million insulin units in the future.

In the sales process, with the strong assistance and continuous empowerment of its parent company Sihuan Pharm, Huisheng Pharm is establishing in a rapid pace a comprehensive and efficient marketing network that combines direct sales and distribution, offline and online, providing solid guarantees for the market volume of various products.

Taking Insulin Aspart, which obtained approval for market launch in December last year, as an example, in July of this year, Huisheng Pharm completed the first batch of shipments, which not only marked the company's full line integration from research and development, production to sales, but also demonstrated its high efficiency and ability to respond quickly to the market in the commercialization process.

This integrated industrial chain layout ensures that the company's innovative diabetes drugs can smoothly transition from the R&D stage to large-scale production, and finally achieve effective commercial sales in the market. Meanwhile, it can also respond more efficiently to market demand and accelerate the process of new drug launch while ensuring product quality and supply chain stability, thus occupying a favorable position in fierce market competition.

"It is precisely such capability advantages that triggers our concerns: what other business can Huisheng Pharm explore for differentiation in the fiercely competitive era of the domestic pharmaceutical industry?"Ms. MIAO Guili shared.

2. Eyes on strategies and choices for Huisheng's overseas layout amid the wave of going global

In the context of globalization, the overseas expansion of innovative pharmaceutical companies has undoubtedly become a trend of the times.

By analyzing the successful cases of Chinese innovative pharmaceutical giants such as BeiGene and Hengrui Pharmaceuticals, we can see that these companies are able to establish themselves in the international market and even achieve leading positions mainly due to their comprehensive product lines, strong innovation capabilities, fast research and development efficiency, and keen insight into market demand.

It is easy to see from the previous article that Huisheng Pharm, as a rising star in the field of diabetes treatment in China, also has the above characteristics. It is fully capable of following the trend and seizing opportunities to go global, to explore new growth points for the company's development.

So, what are the opportunities for Huisheng Pharm to go global? Let's explore from two perspectives:

First of all, there stands huge market demand for diabetes in Southeast Asia and the Middle East.

From the demand side, due to the intensification of global aging and changes in lifestyle, such as sedentary behavior, unhealthy diets, and lack of appropriate exercise, the population of obese and overweight people is growing at an alarming rate. These factors have directly led to the rising incidence rate of chronic diseases such as diabetes. In particular, as diabetes is a chronic disease that cannot be eradicated, the number of diabetes patients worldwide is rising.

Seeing a set of data intuitively, the World Health Organization reported that 425 million adults worldwide suffer from diabetes, and about 1.6 million people die each year as a result. Its complications include blindness, renal failure, heart disease, stroke and lower limb amputation, which seriously affect the quality of life and safety of patients. According to the prediction of the International Diabetes Federation (IDF), the global population of diabetes is expected to increase from 425 million in 2017 to 629 million in 2045, an increase of 48%.

The demand for insulin and other diabetes drugs is growing especially in Southeast Asia and the Middle East, and the market is in short supply, leaving behind a large amount of unmet market demand. Enterprises that can meet these needs undoubtedly hold enormous development opportunities.

According to the report of IDF Diabetes Atlas (Version 10), the number of diabetes patients in Southeast Asia will increase from 90 million to 152 million from 2021 to 2045, an increase of 68%, while the number of diabetes patients in the Middle East and North Africa will increase from 73 million to 136 million, an increase of 87%.

Specifically, Southeast Asia is one of the regions with the most serious diabetes in the world. Public data shows that the incidence rate of diabetes in Malaysia, Indonesia, Thailand and Vietnam is 19%, 10.6%, 9.7% and 6.1% respectively.

Taking Malaysia as an example, its Health Minister Khairy Jamaluddin once pointed out that one out of every two people in Malaysia is overweight, and one out of every five adults has diabetes. The proportion of overweight and heart disease is among the highest in the world.

The situation in Indonesia is also not optimistic. As the country with the fourth largest number of diabetes patients in the world, 90% of the drug raw materials rely on imports, which affects the market sales price. Moreover, diabetes drug market in Indonesia is dominated by multinational companies, accounting for more than 70% of the market share, which shows its challenges in the prevention and treatment of diabetes.

Turning to the Middle East region, the situation is equally severe. Eight Middle Eastern countries have the highest adult obesity rates in the world, with 27% to 40% of the population being overweight for a long time. Take Saudi Arabia as an example. The local incidence rate of diabetes is as high as 18.7%, which is one of the 10 countries with the highest incidence rate of diabetes in the world.

These data and trends clearly show that there is an urgent demand for diabetes drugs in Southeast Asia and the Middle East, and the market potential is huge. For leading Chinese biopharmaceutical companies with integrated research, production, and sales capabilities, such as Huisheng Pharm, this is both a huge business opportunity, and an important opportunity to expand international markets and enhance brand influence.

Secondly, what are the confidence and advantages of Huisheng Pharm in successfully going global?

From the supply side, the diabetes products developed by Huisheng Pharm are mainly new generation products with better hypoglycemic efficacy, safety and economy effect. As mentioned above, IDegAsp has shown leading innovation and clinical value internationally, fully meeting the development trend and demand of diabetes drug market in Southeast Asia and the Middle East.

Meanwhile, by leveraging on parent company Sihuan Pharm's rich experiences in internationalization and business going overseas as an established Hong Kong-listed pharmaceutical company, coupled with the significant cost control advantages of domestically produced biosimilars compared to overseas original drugs, Huisheng Pharm can seize the opportunity to quickly open the entrance to the overseas market with diabetes products, and ensure the smooth progress of its going global plan.

Huisheng Pharm can also bring more high-quality and cost-effective diabetes drugs to the local area while expanding itself in going global. This not only helps to promote the development of the local diabetes drug market, but also realizes the two-way empowerment of the company and the target market. By providing innovative diabetes treatment drugs to Southeast Asia and the Middle East, Huisheng Pharm is expected to occupy an important position in the therapeutic areas of diabetes globally step by step, and continue to expand its international influence in the future.

3? Conclusion

It is no doubt that Huisheng Pharm's continuous breakthrough in the field of diabetes products is gradually transforming into its own strong market advantage, giving it the strength and potential to enter the international market.

Based on the keen insight into the diabetes drug market in Southeast Asia and the Middle East, Huisheng Pharm's going global plan is an accurate grasp of its own development opportunities, and a solid foundation for its subsequent growth, which will also drive the growth of its parent company, Sihuan Pharm.

However, from an investment logic perspective, according to the annual report as of December 31, 2023, Sihuan Pharm's cash and equivalents, wealth management products, pledged deposits, and fixed deposits had a balance of 4.61 billion yuan. Data from Futubull showed that as of August 9, 2024, the company's total market value was approximately 4.539 billion yuan, which is even lower than the company's cash on hand, indicating that the company's valuation is clearly undervalued.

Therefore, with the frequent positive news from Sihuan Pharm and its subsidiaries in recent times, we have reason to believe that after digesting the performance pains of the generic drug business transformation, the company will inevitably experience a Davis double-killing effect in performance and valuation.

12/08/2024 Dissemination of a Financial Press Release, transmitted by EQS News.
The issuer is solely responsible for the content of this announcement.

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