On July 29th, the National Health Commission and 14 other departments jointly formulated and released the "Healthy China Action - Implementation Plan for Diabetes Prevention and Control Action (2024-2030)" (hereinafter referred to as the "Implementation Plan"). It clarifies the overall requirements for diabetes prevention and control work from 2024 to 2030, proposes to adhere to the principle of prevention first, innovate medical and preventive integration mechanism, form a lifestyle, ecological environment, and social environment conducive to diabetes prevention and control, reduce deaths and disabilities caused by diabetes and its complications, and improve the health literacy of the people. The implementation plan specifically proposes to implement major scientific and technological breakthroughs, accelerate the transformation of innovative achievements, and support the promotion and application of new technologies and products in the field of diabetes prevention and control.

Diabetes is one of the four major chronic diseases that seriously threaten the health of Chinese residents. China is the country with the largest number of diabetes patients in the world. At the same time, Chinese patients have the characteristics of low diagnosis rate, low treatment rate, and low compliance rate. The continuous improvement of the diagnosis and treatment rates of diabetes in China has further promoted the continuous expansion of the domestic diabetes prevention and treatment market.

Data shows that in 2023, the sales of oral hypoglycemic drugs alone in domestic tertiary hospitals and retail markets will exceed 30.8 billion yuan. Among them, the sales in domestic tertiary hospitals reached 18.7 billion yuan, a year-on-year increase of 12.8%. Frost Sullivan data shows that the scale of the diabetes drug market in China is expected to reach 167.5 billion yuan by 2030.

There are many types of diabetes medications, including insulin secretagogues, biguanides, thiazolidinediones, α-glucosidase inhibitors, DPP-4 inhibitors, SGLT-2 inhibitors, insulin, GLP-1 receptor agonists and other eight categories, with many links in the industry chain and many listed companies. Among them, listed companies involved in the production of diabetes drugs include Tonghua Dongbao, Gan & Lee Pharmaceuticals, Shandong Lukang Pharmaceutical, Beijing Aosaikang Pharmaceutical, Huadong Medicine, Beijing Beilu Pharmaceutical, and Fuyuan Pharmaceutical, etc.

In recent years, many listed companies have accelerated the competition and competition in the innovation and development of diabetes drugs.

Specifically, on July 22nd, Innovent Bio's GLP-1R/GCGR dual agonist malsudotide in China's type 2 diabetes patients in the phase I clinical study (DREAMS-1) reached the primary endpoints and all key secondary endpoints, showing comprehensive benefits in lowering blood sugar, weight loss and cardiovascular and kidney metabolic indicators. Innovent Bio plans to submit a new drug marketing application for the treatment of type 2 diabetes with malsudotide to CDE in the near future.

It is worth noting that in recent years, the globally popular GLP-1 class of drugs, with its excellent therapeutic effect, safety, and multiple benefits, has been used to treat type 2 diabetes. More and more clinical data show that GLP-1/GIP dual receptor agonists can complement or synergize by regulating GLP-1 and GIP receptors, to reduce weight and improve blood glucose control. Jiangsu Hengrui Pharmaceuticals, CSPC Pharma, Huadong Medicine, Gan & Lee Pharmaceuticals and other pharmaceutical companies have all made efforts in GLP-1 class drugs.

For example, Huadong Medicine has laid out liraglutide-like drugs, semaglutide-like drugs, and GLP-1, GLP-1/GIP and other class 1 new drugs. The company's orally administered small-molecule GLP-1 receptor agonist HDM1002 is currently undergoing active phase II clinical trials. The results of the completed Phase Ia and Ib clinical trials show that HDM1002 has good safety, tolerability, as well as effects in reducing blood sugar and weight.

Jiangsu Hengrui Pharmaceuticals has laid out class 1 new drugs for GLP-1, GLP-1/GIP and GLP-1/INSR targets. More than a decade ago, Jiangsu Hengrui began to lay out the field of metabolic diseases, and has had two class 1 hypoglycemic innovative drugs listed in China.

Hansoh Pharma's liraglutide (long-acting) and Renhe Bio's benalruotide have also been approved for marketing.

Related concept stocks:

United Laboratories (03933): the only domestic pharmaceutical company that produces and sells second-generation and third-generation insulin at the same time. The company's second-generation recombinant human insulin "Optisulin" was approved for marketing in 2011, and its sales of second-generation insulin in 2018 reached 14.9 million vials (a year-on-year increase of 21.1%) and revenue of 0.57 billion yuan (+14.3%). The company's third-generation glycine insulin injection "Youleling" was approved for production by the China National Medical Products Administration in early 2017.

Guangdong HEC Technology Holding (01558) has been committed to developing diabetes drugs and now has one of the most complete domestic diabetes product lines, covering a full range of small molecule new drugs, biologics, biosimilars, and generic drugs. Guangdong HEC Technology Holding has launched five insulin series products in China, and in the future there will also be insulin products such as Degude Manchurian double insulin injection, Degude insulin Liraglutide injection, and insulin weekly preparation. Ganjing insulin and Mandong insulin have also begun to enter the broad international market and are expected to be commercialized in the Middle East, North Africa, and South America. Meanwhile, the company's Ganjing insulin has submitted a listing application in the United States and is expected to become the first Chinese company to sell insulin products in the United States. In the field of diabetes, Ronggelejin, an independent research and development of SGLT2 new drug of Guangdong HEC Technology Holding, is expected to be approved within the year. HEC88473, the world's First-in-Class FGF21/GLP-1 dual target biological new drug, has successfully entered phase II clinical trials and is expected to become a heavyweight product for diabetes, weight loss, and metabolic liver disease. At the same time, GDF15 target monthly preparation weight loss biologics is expected to achieve breakthroughs in the fields of muscle building and weight loss, and healthy weight loss in the future.

Sihuan Pharm (00460) subsidiaries Huisheng Biopharma is currently the company with full product coverage in the field of diabetes and its complications in China, covering second-generation (human insulin), third-generation (insulin analogs), fourth-generation insulin (ultra-long-acting, ultra-rapid-acting insulin analogs represented by Degude insulin), various oral hypoglycemic drugs, DPP-4, GLP-1, SGLT-2 and other new targets and complication treatments.

Innovent Bio (01801) recently announced that the GLP-1R/GCGR dual agonist Mashiduopeptide (research code: IBI362) has achieved the primary endpoint and all key secondary endpoints in the phase III clinical study (DREAMS-1) conducted on Chinese type 2 diabetic subjects, demonstrating comprehensive benefits in blood sugar reduction, weight loss, and cardiovascular and kidney metabolic indicators. In addition, Innovent Bio plans to submit a new drug application (NDA) for Mashiduopeptide for the treatment of type 2 diabetes to the National Medical Products Administration (NMPA) Drug Evaluation Center (CDE) in the near future, and its first indication for weight loss has been accepted in early 2024.