Sinopharm/Oramed Deal Sets Up Huge China Market For Oral Insulin
This article was originally published in PharmAsia News
Executive Summary
Chinese pharmaceutical giant Sinopharm’s subsidiary has finalized a licensing agreement with Israeli firm Oramed for China rights to an oral insulin capsule, paving the way for further changes in the country’s huge diabetes market. Hefei meanwhile is pushing ahead with plans to become China’s high-end insulin production base, helped by several cross-border collaborations.
SHANGHAI - Oramed Pharmaceuticals Inc., the Israeli developer of an oral insulin capsule, ORMD-0801, for both type 1 and 2 diabetes, and China-based Hefei Tianhui Incubator of Technologies (HTIT) have taken a step toward China’s huge diabetes market by signing a licensing deal to introduce the oral solution in the greater China area.
Under an agreement valued at up to $50m, Oramed has given HTIT exclusive rights to further develop and to market ORMD-0801 in China, Hong Kong and Macau. In return, Oramed will receive $3m upfront with a further $8m in the near term, depending on Oramed’s compliance with certain conditions. Upon commercialization, Oramed will also receive a 10% royalty from sales in the region.
At the same time, HTIT - which is backed by the huge Sinopharm group - is buying $12m of Oramed’s stock and is positioned to pay a further $26.5m after achievement of milestones.
“HTIT will bear all commercialization costs of bringing the oral insulin to the market in China,” a spokesperson with Oramed told PharmAsia News.
“We’ve completed our two Phase IIa trials for type 1 and type 2 diabetes under the [US] FDA in 2014. We started our Phase IIb for type 2 diabetes in June and expect to have results in mid-2016,” a spokesperson said.
Currently, a placebo-controlled Phase IIb study to assess the safety and efficacy of multiple oral bedtime doses of ORMD-0801 in adults with type 2 diabetes is recruiting patients in the US, with an estimated enrollment of 180 subjects.
When asked if Oramed and HTIT already have plans and a timeframe to file an investigational new drug (IND) application with China’s FDA, the spokesperson said the company is “working on creative ways to push this process forward quickly but it is premature to share this at this stage.”
ORMD-0801 is designed as an innovative therapy for diabetes by avoiding the number of daily injections and more closely mimicking how the body regulates blood sugar through the liver. With the aim of enhanced patient compliance, it has the potential to allow treatment at an earlier stage.
In type 1 disease, it is used as a complement to standard insulin.
Growing China Epidemic
The Chinese diabetes epidemic is growing by the day. Already over 10% of the more than 1.4 billion people in the country are diabetic, the Oramed spokesperson said, and insulin will play a role in any therapeutic regimen for early or later stage treatment. Oral insulin with its added value over the injectable form should play a huge role in this massive market, she predicted.
Data from the Chinese Diabetes Society show that there are an estimated 114 million people in China suffering from diabetes, accounting for about one third of all such patients worldwide. The current incidence rate of adult diabetes has reached around 12%, which means there is a ripe market for Oramed’s product.
“Oramed’s capsule is way ahead of any other potential [oral] competitor,” the spokesperson noted, “As mentioned above, we are deep in a Phase II trial, compared to others, such as Rani Therapeutics LLC and Aphios Corp., which are still in preclinical stage.”
In October this year, Emisphere Technologies Inc. announced that it had entered into a development and license agreement with Novo Nordisk AS to develop and commercialize oral formulations of four classes of Novo's investigational molecules targeting major metabolic disorders, including diabetes and obesity, using Emisphere Technologies Inc.'s oral Eligen Technology.
Novo is a major player in China’s diabetes sector, but said in its last results that it is facing a number of challenges in the country, including growing local competition (Also see "Shifting China Sands Posing Challenge to Novo Nordisk" - Scrip, 2 Nov, 2015.).
Oramed’s Road To China
In December 2014, Oramed received $5m from China’s Wuzhou Zhongheng Group for the purchase of 696,378 restricted shares of common stock. Oramed said it would use the net proceeds for anticipated US-focused clinical development programs for ORMD-0801, and for preclinical and clinical studies of ORMD-0901, an oral form of the GLP-1 analog exenatide.
But Wuzhou Zhongheng decided in July to terminate an agreement of intent to invest a further $52m in Oramed as part of a licensing agreement for ORMD-0801. Even though the additional investment was halted, Wuzhou Zhongheng still holds a minority stake in Oramed.
As a turnaround, Oramed then signed a non-binding letter of intent for an investment and license agreement worth $50m with Sinopharm Capital Management and Hefei Life Science & Technology Park Investments and Development (HLST) as a prelude to the current deal.
The Oramed spokesperson explained why Oramed chose HTIT over Wuzhou Zhongheng: “The primary reason was the tremendous synergy between our oral insulin and their state-of-the-art active pharmaceutical ingredient for insulin production facility.”
HLST’s Insulin Interests
Established in 2005, HLST runs and manages the Hefei Life Science & Technology Park, with the aim of building up an innovation, collaboration and production incubator for biopharmaceuticals, and also has other interests in the insulin/diabetes area.
In 2005, HLST, Polish Bioton SA and its wholly owned subsidiary Singapore-based SciGen Ltd. set up a joint venture, Hefei Bioton SciGen, with a total investment of $110m, to produce recombinant human insulin and insulin crystals in the park, and to establish a master cell bank for human insulin.
The joint venture began production at the end of 2009 and the capacity is expected to reach 30 million doses in 2015, with an output value of CNY800m ($124m).
Since 2010, HLST has also planned to introduce an oral insulin capsule into China with the first phase investment of CNY880m. HLST and Sinopharm co-invested in Hefei Tianmai, a biotechnology company specialized in insulin production based in the Hefei Life Science & Technology Park.
Through a long-term strategic collaboration, Hefei Tianmai and Israel’s Vanir Bio reached an insulin production technology transfer agreement, and a co-development agreement for long-acting and fast-acting insulin analogues.
Under this, Hefei Tianmai will have the exclusive intellectual property rights for the products in China, and in 2012, Hefei Tianmai and Vanir established a joint laboratory in Israel.
Compared to Novolin R (recombinant DNA origin) from Novo Nordisk and Humulin R (regular human insulin, recombinant DNA origin) of Eli Lilly & Co., the product developed by Vanir has same efficacy and safety profiles, but with more efficient expression cloning vectors and strains, better production output and cost effectiveness, according to the company.
In 2013, Heifei Tianmai finished construction of a manufacturing plant for insulin API, which is in line with EU and China GMP standards, built by Israeli contractor BioPharmax. The annual production capacity of 750kg of crystal will be sufficient for 60 million insulin preparations.
Hefei Tianmai is also developing a third-generation recombinant human insulin analogue, which is undergoing clinical trials and is expected to launch after 2016.