Baldness, a round waist, and fatigue and insomnia are the three major characteristics of contemporary workers. The first two have already become popular in both real life and capital markets. Baldness drugs, hair transplants, and weight loss drugs have been speculated in capital markets round after round, while insomnia drugs have been lukewarm all along. The reason is that there has been no new progress in the research and development of new insomnia drugs, and traditional insomnia drugs not only damage the body but also have dependence.

The good news of insomnia drugs has finally arrived recently. According to the National Medical Products Administration, the application for listing of Simcere Pharma's (02096) newly developed drug Zolpidem Hydrochloride (hereafter referred to as Dali Lei Sheng), marketed under the name Ke Weike, has been accepted. Zolpidem Hydrochloride is a new generation of anti-insomnia drug developed by Simcere Pharma in collaboration with Idorsia, a Swiss company. It is a dual orexin receptor antagonist (DORA) that has been approved for marketing in the United States, the United Kingdom, Italy, Germany, Switzerland, Canada, and other countries. With excellent safety and non-addictiveness, it is currently the only DORA-class insomnia drug approved by the European Medicines Agency to improve daytime function.

The listing of Dali Lei Sheng means that the fourth-generation anti-insomnia drugs, represented by orexin receptor antagonists, are gradually taking to the stage, providing a new treatment plan for numerous insomniacs in China and adding a heavyweight product to Simcere Pharma's central nervous system area, forming a product matrix including Xian Bi Xin, Xian Bi Xin Sublingual Tablets, and Dali Lei Sheng. It further strengthens the company's advantageous position in the field, which is bullish for Simcere Pharma.

Traditional insomnia drugs are about to be overturned.

Unlike traditional sedative-hypnotic drugs that promote sleep by sedating the brain, Dali Lei Sheng helps patients fall asleep and stay asleep by blocking the binding of orexin neuropeptides (orexin A and orexin B) to their receptors, and there is no hangover or drowsiness the next day. Overseas Phase III clinical data published in The Lancet Neurology has confirmed the efficacy and safety of Dali Lei Sheng in the Chinese population with insomnia, and it is expected to meet the clinical needs of many insomniacs in China and become a new option for insomnia treatment.

In terms of efficacy, Dali Lei Sheng significantly reduced patient sleep latency, nighttime wakefulness, and self-reported total sleep time compared to placebo at the first and third months of treatment. Its half-life is about 8 hours, which guarantees nighttime sleep needs and does not cause residual effects the next day, thus meeting the current clinical needs for insomnia drugs.

In terms of safety, Dali Lei Sheng has good safety and tolerability, and no evidence of rebound insomnia, withdrawal symptoms, or drug abuse has been found. Clinical data results from up to 12 months of continuous treatment support the long-term use of Dali Lei Sheng.

Insomnia is one of the most common sleep problems, characterized mainly by difficulty falling asleep (adult sleep latency exceeding 30 minutes), sleep maintenance disorder (≥2 awakenings at night), early awakening, decreased sleep quality, and decreased total sleep time (usually less than 6.5 hours). The symptoms must occur at least three times a week and must be accompanied by daytime functional impairment or daytime distress.

At present, the main drugs used to treat insomnia in international clinical practice include benzodiazepines, non-benzodiazepine drugs, melatonin and melatonin receptor agonists, orexin receptor antagonists, and antidepressants with hypnotic effects.

Benzodiazepines and non-benzodiazepine drugs are the most common sleeping pills on the market today. Benzodiazepine receptor agonists (BzRAs) widely sedate the brain by acting on α receptors of GABAergic neurons. However, these drugs often cause symptoms such as dizziness, drowsiness, fatigue, and orientation disorders, and there are multiple safety issues. In addition, benzodiazepines can disrupt sleep architecture, with obvious residual effects the next day and patients usually feel fatigued when they wake up.

Compared with traditional anti-insomnia drugs, orexin is a neuropeptide that promotes wakefulness through receptors OX1R and OX2R. The orexin system stimulates target neurons in the arousal system and leads to the release of several chemical substances (dopamine, serotonin, histamine, acetylcholine, norepinephrine) that promote wakefulness. Under normal circumstances, orexin levels increase during the day as wakefulness increases, and then decrease at night. Overactive arousal system is an important cause of insomnia.

Orexin receptor antagonists work by blocking the two types of orexin receptors to inhibit overactive awakening pathways in insomniacs and induce sleep, with strong targeting. Compared with traditional insomnia drugs, orexin receptor antagonists reduce awakening drive by inducing sleep and do not alter sleep architecture, with no residual effects the next day or drug dependence. They are expected to be a disruptive iteration of traditional insomnia drugs.

The market for anti-insomnia drugs worth tens of billions, with Simcere Pharma leading the way.

Currently, there are three appetite modulator blockers on the market globally, and there is no such product available domestically yet. Leboyerse and Dalirese, introduced by Weichuang and Simcere Pharma respectively, have submitted their applications for domestic listings; Fazamorexant of Yangtze River is in Phase III clinical trials.

Suvorexant, a Merck's appetite modulator receptor antagonist, is the world's first approved appetite modulator receptor antagonist launched for sale in 2014 after being approved by the FDA. Despite its early launch, the sales are not satisfactory as its global sales were 0.318 billion US dollars in 2021 and declined to 0.258 billion US dollars in 2022, which may be related to its market pricing and long drug half-life. Data shows that the daily treatment cost of suvorexant in the United States has reached 15 US dollars, while commonly used insomnia drug zolpidem tablets have a daily medication price of only 0.99 US dollars, indicating a large difference in drug prices. In addition, the half-life of suvorexant is as long as 12 to 15 hours, resulting in daytime drowsiness after taking the drug, which affects daily life and work.

It is worth noting that although suvorexant has not yet been approved for domestic sales, it has been listed in the second category of psychotropic drugs catalog as early as April 2023 in China. Therefore, its sales will also be affected after its subsequent sales in the domestic market.

Leboyerse, developed by Weichuang, was approved by the FDA in December 2019 for the treatment of adult insomnia. After its launch, its sales continued to rise, and its global sales reached 0.24 billion US dollars in 2022. In January 2024, Leboyerse applied for listing in China for the treatment of adult insomnia, especially for difficulty in sleep initiation or maintenance. It is worth mentioning that Leboyerse has a half-life as long as 17 to 19 hours, which may also affect daily life and work.

Compared to the previous two drugs, the peak period of Dalirese is shorter, with a half-life of only 8 hours. Clinical trials have shown that Dalirese has good pharmacokinetic characteristics, with about 80% of the drug components being eliminated from the body after nighttime sleep, which minimizes residual effects. Therefore, its audience will be even wider. In addition, Fazamorexant of Yangtze River is progressing rapidly in China's clinical trials, indicating a good competition pattern in the domestic market of the two appetite modulator receptor antagonists.

In terms of the market space, according to the Datamonitor database, the number of global insomnia patients was about 1.4 billion in 2019, including 0.69 billion in Asia. In addition, according to the "2023 China Sleep Survey Report," nearly three-quarters of the people have suffered from insomnia, with more than 0.3 billion people in China having sleep disorders, the most common of which is difficulty in sleep initiation-induced insomnia. According to the "China Sleep Study Report 2024," the sleep index of residents in China was 62.61 in 2023, down by 5.16 from 2022 and down by 2.17 from 2021, a new low in the sleep index over the past three years, indicating a severe situation for the sleep condition of residents. The huge group of insomnia patients has created a huge space for medication. According to the statistics of Medicinal and Economic Report, the sales of hypnotics/sedatives in sample hospitals in China reached nearly 2 billion yuan in 2021, and the drug purchase amount of public hospitals across the country was 5 billion yuan. The Huajing Industrial Research Institute predicts that the global insomnia treatment market size is expected to increase from 3.4 billion US dollars in 2023 to 4.37 billion US dollars in 2028. The overall market size of the Chinese sleep economy is expected to exceed 10 trillion yuan by 2030, of which the market of insomnia drugs has increased from 9.84 billion yuan in 2016 to nearly 13 billion yuan in 2022.

Traditionally, China's domestic drugs for insomnia are still being prescribed, and the launch of appetite modulator receptor antagonists will fill the gap in the domestic market. Once these products hit the market, they are expected to rapidly occupy the market space of traditional drugs, and Dalirese, which has shown more outstanding clinical performance, is expected to stand out.

In terms of capital, the pharmaceutical industry is still in a capital winter phase, and the overall valuation of pharmaceutical companies is very cheap, which is a good opportunity to explore good companies. Taking Simcere Pharma as an example, its jointly developed Dalirese NDA has been accepted by the NMPA, and there is no product approved for sale in the domestic market. Compared with its competitors, Dalirese has more outstanding performance in all aspects, and is expected to become the benchmark in this subdivision field after it is approved for sale, and it may quickly rise in volume. Simcere Pharma will also benefit from it. It is worth mentioning that 2024 is also the peak period for the commercial realization of Simcere Pharma. Xanaprev Sublingual Tablets were accepted by the NMPA under NDA in June 2023. Suvacito Monoclonal Antibody combined with chemotherapy for platinum-rich chemotherapy-resistant/recurrent ovarian cancer, tubal cancer, or primary peritoneal cancer was submitted for sales application to the NMPA in March 2024 and was accepted; ADC189 is expected to submit NDA in 2024. With the commercial realization of multiple innovative drugs, the performance of Simcere Pharma is guaranteed.

In addition to the impressive data performance of these products, Simcere Pharma has a nationwide marketing network and leading commercialization capabilities. As of 2024, Sinocere has a academic promotion team of over 4,000 people. It is not difficult to foresee that once Dalirese is approved for sale, its market space will be able to quickly open up through the existing sales channels of Simcere Pharma, helping more insomnia patients to get through the long night.

Apart from the above, the most advanced in China's clinical trials is Fazamorexant of Yangtze River, indicating a good competition pattern in the domestic market of the two appetite modulator receptor antagonists.

Conclusion

There is a huge space for medication for the huge group of insomnia patients, with the sales of hypnotics/sedatives in sample hospitals in China having reached nearly 2 billion yuan in 2021, the drug purchase amount of public hospitals across the country being 5 billion yuan. The global insomnia treatment market size is expected to increase from 3.4 billion US dollars in 2023 to 4.37 billion US dollars in 2028. In particular, the overall market size of the Chinese sleep economy is expected to exceed 10 trillion yuan by 2030, of which the market of insomnia drugs has increased from 9.84 billion yuan in 2016 to nearly 13 billion yuan in 2022.

Taking Simcere Pharma as an example, its jointly developed Dalirese NDA has been accepted by the NMPA, and there is no product approved for sale in the domestic market. Compared with its competitors, Dalirese has more outstanding performance in all aspects, and is expected to become the benchmark in this subdivision field after it is approved for sale, and it may quickly rise in volume. Simcere Pharma will also benefit from it.

It is worth mentioning that 2024 is also the peak period for the commercial realization of Simcere Pharma, with Xanaprev Sublingual Tablets having been accepted by the NMPA under NDA in June 2023; the sales application for Suvacito Monoclonal Antibody combined with chemotherapy for platinum-rich chemotherapy-resistant/recurrent ovarian cancer, tubal cancer, or primary peritoneal cancer was filed in March 2024 and was accepted; ADC189 is expected to submit NDA in 2024. With the commercial realization of multiple innovative drugs, the performance of Simcere Pharma is guaranteed.