Collective procurement 'big winner'
In 1995, Gan Zhongru, who had worked as a postdoctoral fellow and senior biochemist at Merck&Co. in the United States, returned to China to start a business. Three years later, the team formed by Gan Zhongru developed China's first genetically recombinant human insulin, becoming the third company after Eli Lilly and Novo Nordisk to produce and sell recombinant human insulin.

Subsequently, under the leadership of Gan Zhongru and his R&D team, Gan Li Pharmaceutical continued to develop the first long-acting insulin analog, the first fast acting insulin analog, the first pre mixed insulin analog, and the first winter insulin in China. The products covered three insulin functional segments: long-acting, fast acting, and medium acting, becoming the "king of insulin" in China.

With the acceleration of domestic insulin substitution in recent years, Ganli Pharmaceutical's operating revenue has increased from 1.771 billion yuan in 2016 to 3.612 billion yuan in 2021; The net profit attributable to the parent company increased from 770 million yuan to 1.453 billion yuan. The revenue from insulin products accounts for over 95%, with a gross profit margin of as high as 91%.

In June 2020, Ganli Pharmaceutical Co., Ltd. listed on the Shanghai Stock Exchange and won 13 consecutive limit up boards after going public, with its stock price soaring and its market value exceeding 100 billion yuan. However, with the arrival of centralized procurement, Ganli Pharmaceutical also faced the most dangerous moment, with its market value shrinking to less than 20 billion yuan at one point.

In November 2021, the sixth batch of national centralized procurement of insulin was officially launched. Like previous batches of centralized procurement, price reduction remains the key keyword for collection. In the end, 42 insulin products were selected, covering 16 common name varieties of second-generation and third-generation insulin commonly used in clinical practice. 11 companies won the bid, and the average price reduction for the selected products was 48%. Among them, all six insulin products of Ganli Pharmaceutical won the bid, with an average reduction of 65.33%.

In 2022, Ganli Pharmaceutical was affected by the price reduction of centralized procurement and compensated customers for their inventory products before the implementation of centralized procurement. The total amount of provision for compensation was 565 million yuan, resulting in a 52.6% decrease in revenue in 2022 and a loss of 440 million yuan in net profit attributable to the parent company.

But the good news is that with the advantage of centralized procurement prices and the opportunity of nearly 10000 new hospitals entering the market, the sales volume of various products of Ganli Pharmaceutical has grown rapidly, the market share has continued to increase, and the grassroots market share has continued to rise. In 2022, the sales volume of Ganli Pharmaceutical's domestic insulin preparations increased by 29.77% year-on-year, and the effect of "price for quantity" is gradually emerging.

Ganli Pharmaceutical has also begun to realize that since the trend of centralized procurement cannot be reversed, instead of passively defending, it is better to actively embrace centralized procurement and adapt to it.

In the 2024 insulin follow-up procurement, the demand data for various products of Ganli Pharmaceutical has significantly increased, with a procurement demand of 41.77 million units in the first year, an increase of 151% compared to the previous centralized procurement. Among them, the third-generation insulin products accounted for 24% of the overall first-year procurement demand for third-generation insulin, an increase of 10 percentage points compared to the last time. The total number of products reached the second place in the industry, second only to Novo Nordisk. The growth of meal time and pre mixed products is more significant, with growth rates of 381% and 564% respectively.

In terms of renewal prices, Ganli Pharmaceutical is one of the few companies that has received centralized procurement price increases, with an average price increase of 31% for various types of insulin, second only to Eli Lilly. Among them, the third-generation basic insulin has increased prices by 34%, the third-generation meal time insulin Mendong and Lai Pu have increased prices by 30% and 48% respectively, and the third-generation pre mixed insulin Mendong 30 and Lai Pu 25 have increased prices by 5% and 23% respectively, and are mostly selected as Class A.

From the results of the two rounds of insulin procurement, Ganli Pharmaceutical has become the biggest winner in the procurement, with a significant increase in product sales and a continuous increase in market share. With the basic clearance of the impact of the first round of centralized procurement on performance, the subsequent procurement prices have been significantly increased, driving a significant rebound in profitability.

Overseas market 'gold rush'
However, as insulin and other traditional diabetes drugs were brought into centralized procurement, the new hypoglycemic drugs led by GLP-1RA quickly filled the market space left by centralized procurement, and the domestic market share of insulin was further reduced.

In order to find new growth points for performance, Ganli Pharmaceutical is accelerating its innovation pace and seeking opportunities to go global.

As early as 2005, Ganli Pharmaceutical began to promote its international strategic layout. It has comprehensively distributed a full range of diabetes treatment products in various countries and regions around the world, including the United States and Europe, Asia Pacific, the Middle East, North Africa, Central and South America, sub Saharan Africa, and has successively established international business networks in more than 20 countries and regions around the world.

From 2020 to 2023, Ganli Pharmaceutical's international sales revenue increased from 65 million yuan to 327 million yuan, and the proportion of international sales revenue increased from 1.94% to 12.52%. In the first three quarters of 2024, international sales revenue reached 377 million yuan, a year-on-year increase of 36.1%, and the proportion of total revenue increased to 16.79%.

In terms of insulin "going global" strategy, Ganli Pharmaceutical has chosen to launch a dual line attack.

In terms of emerging markets, Ganli Pharmaceutical has adopted two major strategies: localization of formulation production and localization of operation, introducing its advantageous resources into emerging country markets, promoting rapid development of international business, and expanding its international business map.

Take the Brazilian market as an example. Brazil has the largest number of diabetes patients in Latin America. By 2021, the number of diabetes patients in Brazil has reached about 15.7 million (aged 20-79), accounting for 47.5% of the total number of patients in Latin America.

Since 2014, Ganli Pharmaceutical has opened up the Brazilian market through cooperation with local partners, and now Ganli Pharmaceutical has become an important player in the Brazilian insulin supply chain. In April 2024, the insulin factory of its Brazilian partner was completed. Through technology transfer cooperation, the pharmaceutical company became the first local enterprise in Brazil to have insulin production capacity, which will greatly enhance the accessibility and affordability of insulin analogues for Brazilian patients in the future.

Similar to the Brazilian market, in recent years, Ganli Pharmaceutical has diversified its development in emerging markets. In Bolivia and Mexico in Latin America, they successively entered the market as MAH, further enhancing their independent sales capabilities; In the Asia Pacific region, the launch of the first Asparagus Insulin 30 Injection product in Bangladesh signifies the successful implementation of the overseas localization project for Asparagus Insulin 30; In the Central and Northeast Africa region, multiple countries have signed contracts and initiated product registration and access work, which means coverage has been achieved in key areas of major emerging markets.

Meanwhile, in the world's largest insulin sales market - the European and American markets, Ganli Pharmaceutical has adopted another strategy. In 2018, a commercial and supply agreement was signed with Sandoz. According to the agreement, after the approval of three biosimilars, Sandoz will carry out commercial operations of the drugs in the United States, Europe, and other specific regions, with Ganli Pharmaceutical responsible for drug development (including clinical research) and supply.

At present, the marketing applications for Ganjing, Laipu, and Mendong insulin injection similar drugs from Ganli Pharmaceutical have been accepted by the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA). With the help of Sandoz, significant gains may be made in the European and American markets in the future.

Head to head PK "Quasi Medicine King"
At present, insulin is still of great market value as an indispensable treatment and final drug in the field of diabetes treatment. But with the emergence of new hypoglycemic drugs such as DPP-IV, SGLT-2, and especially GLP-1 drugs, the billion dollar hypoglycemic drug market is undergoing a transformation.

According to statistics, the global GLP-1 drug market sales increased rapidly from US $8 billion in 2018 to US $36.2 billion in 2023, with a compound annual growth rate of 35% and a share of more than 40% in the diabetes drug market.

It can be said that the future hypoglycemic drug market belongs to GLP-1, and in the face of huge market potential, domestic and foreign pharmaceutical companies are laying out their strategies. According to incomplete statistics, there are currently nearly 280 GLP-1 drugs under development worldwide, with nearly half of them coming from Chinese pharmaceutical companies.

Under fierce competition, in order to occupy a high market share in the future, drug safety, efficacy, and commercialization capabilities are indispensable.

Ganli Pharmaceutical has been deeply involved in the field of blood sugar reduction for many years, and its commercialization ability is self-evident. The GZR18 injection under research is a long-acting GLP-1 receptor agonist with indications of type 2 diabetes and obesity/overweight. In July 2023, GZR18 carried out the head to head Phase II trial with Smeaglutide injection, and in August 2023, completed the first subject administration of GZR18 in the Phase Ib clinical trial of type 2 diabetes, obesity and overweight indications in China.

In July of this year, Ganli Pharmaceutical announced the key results of the Phase IIb clinical trial of GZR18 injection. After being treated with the highest dose of GZR18 injection once every 2 weeks for 30 weeks, the average weight of the subjects in the GZR18 injection group decreased by 17.29% compared to baseline, and at 30 weeks, the weight of the subjects in the GZR18 injection group continued to decrease. The above research results show that the weight loss effect of GZR18 is better than that of single target semaglutide and dual target tepaglutide in similar dosing cycles, and the dosing cycle is extended to twice a month.

In October this year, the Phase II clinical study of GZR18 injection in patients with type 2 diabetes reached the main end point, which was more effective than smeglutide in reducing glycosylated hemoglobin (HbA1c) and body weight.

At present, there is no GLP-1RA biweekly formulation on the market worldwide. Ganli Pharmaceutical is at the forefront of clinical progress and has chosen the research and development strategy of promoting dual clinical trials in China and the United States. In the future, it is expected to compete with GLP-1 products from multinational pharmaceutical companies.

In addition to GZR18 injection, Ganli Pharmaceutical has also laid out multiple potential pipelines in the field of hypoglycemic drugs, including GZR18 tablets (oral GLP-1RA), GZR4 injection (fourth generation insulin analog), GZR101 injection (fourth generation new premixed dual insulin compound preparation), which are in the clinical stage and have strong competitiveness.

In addition, as the production process of antibody drugs is similar to that of insulin, it also requires steps such as cell expansion, fermentation culture, multi-step purification, and formulation filling. In order to improve the utilization efficiency of the production line, Ganli Pharmaceutical has not only focused on the field of hypoglycemic drugs, but also laid out autoimmune drugs. Among them, GLR1023 injection is a biosimilar drug of Sikuximab, used to treat adult moderate to severe plaque psoriasis that meets the indications for systemic therapy or phototherapy. It has been approved for clinical use.

In terms of R&D investment, from 2021 to 2023, Ganli Pharmaceutical has accumulated R&D investment of 1.85 billion yuan, accounting for 23.3% of its revenue. In the first three quarters of 2024, Ganli Pharmaceutical's R&D expenses reached 403 million yuan, a year-on-year increase of 9.05%, and the R&D investment remained stable.

Source: https://pharm.jgvogel.cn/c1458823.shtml