Domestic pharmaceuticals and medical devices are picking up speed in entering the Chinese market. China, along with the United States, is regarded as one of the world's largest pharmaceutical markets, but domestic corporations' entry had stagnated due to the COVID-19 pandemic and sluggish domestic demand. Recently, as Chinese authorities have sped up approval procedures, a green light has turned on for domestic corporations' push into China.
According to the industry on the 9th, Daewoong Pharmaceutical and Onconic Therapeutics, a new drug development subsidiary of JEIL PHARMACEUTICAL, are each aiming to enter the Chinese market with new P-CAB (potassium-competitive acid blocker, gastric acid secretion inhibitor) class drugs for gastroesophageal reflux disease.
Daewoong Pharmaceutical received Chinese marketing approval for Fexuclue, a treatment for gastroesophageal reflux disease, on the 5th. It came a little over two years after applying for marketing approval to the National Medical Products Administration (NMPA) of China. Onconic Therapeutics in 2023 exported the technology for Ja Q Bo (zasdaprozan) to its Chinese partner Livzon Pharmaceutical Group. Livzon completed phase 3 clinical trials in China and last month submitted a marketing approval application to the NMPA.
P-CAB formulations work by blocking the action of potassium to prevent excessive secretion of gastric acid and are third-generation treatments for gastroesophageal reflux disease used for reflux esophagitis, gastric ulcers, and gastritis. Compared with conventional second-generation PPIs (proton pump inhibitors), they have a longer duration of effect and better convenience, and their market share is rapidly increasing in the global medical market.
According to global market research firm IQVIA, the global market for gastroesophageal reflux disease treatments this year is about 40 trillion won, and the Chinese market among that was assessed at about 4 trillion to 6 trillion won. In particular, the total annual sales of P-CAB formulations in China are currently 241.4 billion won, with an annual growth rate of 81.2%.
In Korea, HK inno.N, Daewoong Pharmaceutical, and Onconic Therapeutics each developed new P-CAB drugs and launched them domestically and abroad, but the only product to break into the Chinese market is HK inno.N's K-CAB. K-CAB was first launched in China in 2022 and has been listed in China's medical insurance since March 2023.
Other corporations are also clearing China's approval hurdles one after another. GC Biopharma Group's subsidiary GC Wellbeing received expedited import approval in September last year in Boao Lecheng, a special medical zone in Hainan Province, and is the first and only domestic corporation currently selling the placenta injection "Laennec" in China.
Laennec is an injection developed based on placentas collected from obstetrics and gynecology, and it is an approved drug aimed at improving liver function in patients with chronic liver disease. GC Wellbeing plans to expand nationwide in China starting next year after registering with the NMPA in China.
L&C BIO received NMPA approval in China in January for the surgical human tissue graft MegaDerm Plus. To speed up its China business, the company converted its local L&C China into a wholly owned subsidiary at the end of last year.
The company has mainly pursued a medical device business centered on surgical human tissue grafts, but it is recently strengthening the business with the skin booster "RITOO," which helps improve skin elasticity and moisturization. A company official said, "Based on RITOO's performance in Korea, we are holding initial meetings with strategic investors (SI) in China," and added, "We plan to fully ramp up our entry into the Chinese market together with MegaDerm Plus."
SK Biopharm is also going through administrative procedures to launch the new epilepsy drug cenobamate in China through Ignis Therapeutics, a joint venture established in China. Ignis applied for Chinese marketing approval for cenobamate in December last year, and on the 5th it also applied to the NMPA for approval to manufacture cenobamate in China. A company official said, "We see the local launch timing in China as between the end of next year and early 2027."
Although expectations have recently risen in China for approvals of pharmaceuticals and medical devices, the trade balance remains in deficit. In pharmaceuticals, imports of raw materials exceed exports of finished drugs, resulting in a trade deficit since the 2010s. According to the Korea Health Industry Development Institute, in the first half of this year, domestic corporations' pharmaceutical exports to China totaled $198 million, up only 1.2% from the same period last year. Medical device exports fell 20.1% from a year earlier to $268 million.
An industry official said, "One reason for sluggish exports to China is that launches have been delayed as Chinese regulators increased certification requirements and tightened approval rules," and added, "The government also needs to strengthen systems that support domestic corporations' global approvals and market entries."