Deals

China’s Hua looks to Bayer to commercialize lead diabetes therapy on its own turf

China’s top diabetes sales force to sell first-in-class GCK activator dorzagliatin

Hua is tapping into Bayer’s leading Chinese diabetes sales force to commercialize its first-in-class GCK activator in China. For Bayer, the deal fills a hole in its China portfolio.

Hua Medicine Ltd. (HKEX:2552) said Monday that it granted Bayer AG (Xetra:BAYN) exclusive Chinese rights to commercialize lead program dorzagliatin. 

While Bayer is a not a household name in Western diabetes markets, the company has the leading diabetes sales force in China because of its Glucobay acarbose franchise, Hua EVP and CFO George Lin told BioCentury. The oral alpha glucosidase inhibitor — approved in 1997 and off patent in China since 2007 — has remained one of Bayer’s best-selling drugs. Last year, the drug had €667 million ($748.8 million) in sales -- 90% of which were in China, according to a Bayer spokesperson. 

The size of primary care sales force needed to market a new diabetes drug in a country as large as China meant it made more sense for Hua to seek a commercialization partner rather than establish its own sales organization, according to Lin.

“Bayer have been number one in China for at least the past 10 years with Glucobay,” Lin said. “The beauty for Hua Medicine is they have all these access points. They know everyone because this has been their top selling drug.” 

“Bayer were always our preferred partner,” said Lin.

The deal was well timed for Bayer as well. Glucobay was Bayer’s seventh best selling drug by revenue in 2019; however, those revenues have fallen off a cliff this year after China’s centralized procurement program placed a substantial discount on Glucobay. In 2Q20, Bayer reported a 74% drop in 2Q20 sales to €40 million compared with the same period last year.

Dorzagliatin is headed for a regulatory submission in China early next year, setting it up for approval by YE21. 

Hua received RMB300 million ($43.2 million) up front and is eligible for up to RMB4.2 billion in milestones.

The partners will initially split revenues 50-50, with undisclosed adjustments to that ratio applied as new sales thresholds are met.

Earlier this year Hua reported additional Phase III data for dorzagliatin as monotherapy; data from a Phase III trial in combination with metformin is expected by year-end (see “Hua Shows Sustained Benefit”).

Lin said Hua is responsible for further development, including additional combination studies. He said Hua will also be conducting global studies of dorzagliatin, with the aim of finding a partner for other regions.

Hua announced the deal after market close.

TARGETS
GCK (GK) – Glucokinase