Recently, the National Medical Products Administration (NMPA) released the latest drug approval documents, and Novo Nordisk's Smegglutide tablets have been officially approved for sale in China for the treatment of type 2 diabetes patients. This is the first oral GLP-1 receptor agonist approved for sale in China. Smegglutide is well-known for its title as a "weight loss miracle drug" and has also brought significant performance growth to Novo Nordisk.
Although Smegglutide has not yet been approved as a weight loss indication in China, it is widely used for weight loss in practical use. At present, GLP-1 drugs approved for weight loss in China include Liraglutide from Huadong Pharmaceutical and Benarutide from Renhui Biotechnology. The clinical products under study are mostly long-acting formulations with fewer administration times, as well as small molecule drugs with oral advantages. According to relevant sources, the indications for weight loss related to Smegglutide tablets have started phase III clinical trials in China. In addition, the countdown to Lilly's entry into the Chinese market has also come, and this drug is known as Smegglutide's biggest competitor today.
The approval of oral administration of Smegglutide may bring new changes to the GLP drug and weight loss market in China. Liu Kan, Director of Investment at China Merchants Health, stated in an interview with 21st Century Business Herald that due to the need for multiple conversions and strict time requirements for medication, patients with Novo Nordisk Smegglutide oral formulations currently have relatively poor compliance. Therefore, in the short term, the impact of the launch of oral smeglutide on the market is limited, but in the long run, with the continuous updating of technology, the improvement of patient compliance with oral formulations is the development direction.
The competitive landscape of GLP-1 market may change
On January 26th, NMPA approved the development and production of Novo Nordisk's Novo Nordisk brand; Reg; The marketing application of Smegglutide tablets in China for the treatment of adult type 2 diabetes. This is the first oral GLP-1 receptor agonist approved for marketing in China. According to Novo Nordisk, as the world's first and currently the only GLP-1 tablet, Novo Nordisk&Co; Reg; The convenience of oral administration, strong hypoglycemic effects, and multiple metabolic benefits help patients improve treatment compliance.
Globally, Novo Nordisk currently has three Smegglutide products on sale, including the subcutaneous injection Ozempic for lowering blood sugar, the oral tablet Rybelsus for lowering blood sugar, and the weight loss product Wegovy. Previously, in April 2021, NMPA approved the listing application of Smegglutide Injection Ozempic (Novotech®) in China.
Smegglutide has brought significant performance growth to Novo Nordisk. According to financial report data, Novo Nordisk's cumulative sales for the first three quarters of 2023 reached DKK 166.398 billion, a year-on-year increase of 29%. The total sales of three Smegglutide products reached approximately DKK 100.2 billion, accounting for over 60% of the company's overall sales.
Since the approval of Smegglutide Injection in China, its sales have grown rapidly. According to Novo Nordisk's announcement, Ozempic in China achieved revenue of 3.813 billion Danish kroner (approximately 4.003 billion RMB) in the first three quarters of 2023, a year-on-year increase of 160%. In the third quarter, it achieved a revenue of DKK 1.60 billion (approximately RMB 1.68 billion), a year-on-year increase of 167%, and the fastest growth rate among markets by region.
In addition to Smegglutide, the rapidly growing GLP-1 class of drugs also includes Lilly's Tirzepatide, which is known as Smegglutide's biggest competitor today. In May 2022, Tilposide Injection was approved by the FDA for the treatment of type 2 diabetes; On November 8, 2023, the weight loss indication for Tilposide Injection was approved by the FDA.
According to Lilly's financial report, global sales of Tilposide reached $2.958 billion in the first three quarters of 2023, with global sales of $1.409 billion in the third quarter. According to a research report by Guojin Securities, Telposide achieved a single quarter sales revenue of over 1 billion US dollars in the sixth quarter after its listing. Currently, its prescription proportion in the US GLP-1 drug market has risen to 19.5%, indicating a strong upward trend.
Due to the safety and effectiveness of GLP-1 receptor agonists, they have become the core target of clinical research on weight loss drugs, and the GLP-1 drug market has grown rapidly in recent years. According to Frost Sullivan data, the global GLP-1 market size has increased from $5.2 billion in 2016 to $15.4 billion in 2021, with a compound annual growth rate of 24.3% from 2016 to 2021 and an estimated $28.3 billion in 2025. The compound annual growth rate is expected to reach 16.4% from 2021 to 2025.
In terms of the domestic market, Frost Sullivan data shows that the size of China's GLP-1 market has increased from 400 million yuan in 2016 to 2.7 billion yuan in 2021, with a compound annual growth rate of 46.5% from 2016 to 2021 and an expected compound annual growth rate of 15.6 billion yuan in 2025. It is expected that the compound annual growth rate from 2021 to 2025 will reach 55.0%.
Currently, there are also multiple domestic companies deploying GLP-1/GLP-1R agonists. According to research reports from Debon Securities, as of June 14, 2023, a total of 99 GLP-1 class drugs with clinical and above applications have been applied for in China. In addition to foreign giants such as Eli Lilly and Novo Nordisk entering the domestic GLP-1 market, domestic pharmaceutical companies have also made continuous efforts to enter the market. Currently, Huadong Pharmaceutical and Hengrui Pharmaceutical are leading domestic pharmaceutical companies in the number of GLP-1 new drugs.
How will the approval of oral semaglutide affect the competitive landscape of China's GLP-1 drug market? Liu Kan told 21st Century Business Herald reporters that in fact, due to factors such as the need for multiple conversions and strict time requirements for administration, the patient compliance and convenience of oral formulations are relatively poor compared to Novo Nordisk Smegglutide Injection. Based on the market situation of oral smeglutide approved overseas, according to Novo Nordisk's Q3 2023 report, the sales amount of subcutaneous injection preparation Ozempic is much higher than that of hypoglycemic oral tablet Rybelsus.
However, Liu Kan also believes that with the continuous updating of technology, the use of oral preparations will become more convenient, and patient compliance will gradually improve. The general direction of promoting oral drugs is correct. "Therefore, in the short term, the impact of the launch of oral semaglutide on the market is limited, but in the long term, the continuous improvement of patients' compliance is the development direction."
In addition, from the consumer side, Liu Kan also pointed out that the promotion of oral Smegglutide will face production capacity issues. Previously, due to excessive sales, many countries experienced a shortage of supply of Smegglutide, and many countries have restricted the use of Smegglutide.
Liu Kan introduced that due to the need for digestion and absorption through the stomach and intestines, the bioavailability of oral drugs is much lower than that of injectable drugs. The bioavailability of simagliptin oral and injectable preparations may differ by 10-20 times. Therefore, a series of supporting measures to increase production capacity are needed after the oral administration of Smegglutide is launched.
Competition for weight loss market
Smegglutide is more well-known for its title of "miracle weight loss medicine". Although it has not yet been approved as a weight loss indication in China, it has been widely used for weight loss in practical use. Currently, the increasing number of overweight and obese individuals is driving the rapid development of the global and Chinese weight loss drug markets.
According to Frost Sullivan data, the global weight loss drug market is expected to reach $11.5 billion by 2030, with a compound annual growth rate of 14.7% from 2023 to 2030. In terms of the market size of weight loss drugs in China, Frost Sullivan data shows that the annual compound growth rate of the market size of weight loss drugs in China was 56.2% from 2016 to 2023, expected to reach 14.9 billion yuan by 2030, and expected to be 12.4% from 2024 to 2023.
In June 2023, Novo Nordisk submitted an application to the Chinese drug regulatory authorities for the launch of a new indication for Smegglutide Injection. According to industry speculation, the indication for this application is likely to be the long-awaited weight loss indication. According to relevant sources, the indications for weight loss related to oral Smegglutide tablets have been initiated in phase III clinical trials in China.
In terms of the domestic weight loss drug market, according to a research report by Debon Securities, currently approved GLP-1 drugs for weight loss in China include Liraglutide from Huadong Pharmaceutical and Benarutide from Renhui Biotechnology. The clinical products under study are mostly long-acting formulations with fewer administration times, as well as small molecule drugs with oral advantages.
At present, the countdown to the entry of Lilly's telposide into China has also begun. On August 21, 2023, NMPA officially accepted the application for Lilly's telposide as an indication for adult weight loss, and it is currently under review.
In addition to Smegglutide and Telposide, there is also noteworthy the GLP1R/GCGR dual agonist Masalidomide developed in collaboration between Eli Lilly and Xinda Biotechnology. On December 26, 2023, the CDE drug clinical trial registration and information disclosure platform showed that Xinda Biotechnology has initiated the phase III clinical trial of Masalidomide Head to Head Smegglutide. Xinda Biotechnology previously stated that it expects to submit a marketing application for Masalidomide from the end of 2023 to the beginning of 2024.
On January 23rd, three days before the approval of the oral administration of Smegglutide, Novo Nordisk reached a cooperation and licensing agreement with EraCal Therapeutics to develop and commercialize a new mechanism of action for controlling appetite and weight developed by EraCal for oral small molecules, in order to consolidate its leading position in the heavyweight market. According to the agreement, Novo Nordisk will be granted exclusive rights to develop and commercialize the project, while EraCal is eligible for up to 235 million euros in advance payment, development and commercial milestones, as well as royalties after the product is launched and sold.
An industry perspective suggests that Novo Nordisk's introduction of this project further promotes the business development strategy that has been formed since its collaboration with EraCal in source new drug research. During this period, Novo Nordisk acquired Embark Biotech and Inversago Pharma, partnered with Omega Therapeutics, and laid the foundation for its product pipeline in other areas.
Liu Kan believes that the series of acquisition actions by Novo Nordisk reflect the strategic planning of Novo Nordisk. Pharmaceutical companies need to consider the emission gradient and rhythm of their pipelines, as well as the layout of hot selling products, research and development backend, and reserve pipelines.
At present, the sales of Smegglutide drugs are very hot, but Liu Kan also pointed out that in the fiercely competitive GLP-1 track, Novo Nordisk still faces some challenges, such as the emergence of dual target drugs such as Tilposide and Masalidomide, as well as the development of three target drugs. "Currently, Lilly's Telposide has shown its determination to 'stick to it' in the field of hypoglycemic and weight loss, and has conducted 9 head to head indications studies with mainstream products on the market. Among them, 7 studies have shown that Telposide has better therapeutic effects than mainstream products on the market, including Smegglutide."
"Facing the current best-selling products, Novo Nordisk is not on the credit list, but is seriously considering the fierce market competition and making long-term plans," Liu Kan said.