Daewoong Pharmaceutical has changed its strategy of entering the Chinese market with its botulinum toxin Nabota.
The Korean drugmaker said it voluntarily withdrew the clinical trial application (CTA) for Nabota that was approved by the China Food and Drug Administration (CFDA) in January. The company plans to submit a new CTA with an update in production site within this year.
The previous CTA cited the production site for Nabota as the Plant No. 1, but the company needed to replace it with the Plant No. 2, which has more output capacity for a larger Chinese demand in botulinum toxin.
Observers said Daewoong’s move seemingly aims a stable entry into China, even if the company could delay the product release.
A delay in product launch is the biggest risk for Daewoong.
Among Korean makers of botulinum toxin, Medytox is moving the fastest to compete in China.
Medytox completed phase-3 trials in China in June last year and sought regulatory nod in February. As it usually takes one year from requesting for approval to receiving sales permission in China, Medytox is likely to release its product in February next year.
Hugel is conducting a phase-3 study in China, catching up with Medytox. Hugel is expected to roll out its product in 2022.
The latest decision by Daewoong is likely to delay Daewoong’s product release in China. Industry watchers predict that Daewoong will begin to sell Nabota in China in 2023 or 2024.
Good news for Daewoong is that the CFDA has shortened the period for drug assessment. According to industry sources, the time for CFDA’s Investigative New Drug (IND) process was reduced from 1.5 years to 60 days. The faster review process prompted Daewoong to choose a solid entry to China over a quick one, observers said.
Daewoong’s refiling of CTA plan raised concerns for revenue.
The Plant No. 1 for Nabota is capable of producing 500,000 vials of Nabota a year, and the newly built Plant No. 2, 4.5 million vials. Daewoong said the two factories could produce 5 million vials of Nabota a year.
Although China is not yet an active market for domestic pharmaceutical firms, they will have to face a severe price competition, industry watchers said.
In China, only two botulinum toxin products are available – Botox by Allergan, and BTX-A by Lanzhou, a Chinses firm. Korean products by Medytox and Hugel are likely to be available next year.
The original Botox is sold for about 300,000 won ($265.5) per 100 units in China. Korean rival products are much more affordable, trading at around 30,000 won.
Korean drugmakers, including Medytox and Hugel, are highly likely to sell low-priced botulinum toxin with high quality. The prices could be set at similar levels with domestic ones.
On the assumption that Daewoong sets the price at the lowest level of 30,000 won per vial, it could rake in 150 billion won revenue out of 5 million vials per year in China.
However, the company arrives in China as the late runner after Medytox and Hugel, its sales may become smaller than expected.
Even if Daewoong chooses a high-pricing strategy with Nabota, it will be difficult to set the price as high as that of the original Botox. If Nabota sells for 100,000 won per vial, Daewoong’s sales will be 500 billion won per year. However, such a scenario is unrealistic.
Industry officials interpreted Daewoong’s latest decision from many angles.
Some of them raised suspicion why Daewoong would choose a more difficult path, saying the initial decision to go with the Plant No. 1 for Nabota’s CTA was a mistake.
“As far as I know, they built the Plant No. 2 to target the U.S. and Europe. Because they selected the Plant No. 1 for Nabota in the CTA, they now need more time to change it. If it had chosen the Plant No. 2 in the first place, they would have avoided the hassle,” an official at the pharmaceutical industry said.
Another official said it is questionable if the Chinese regulator would accept Daewoong’s refiling of CTA, even if Daewoong submits data that can prove the equivalence of Nabota production between the Plant No. 1 and Plant No. 2.
“Daewoong seems to have chosen a stable, if long, path,” the official said.
Daewoong said the decision was based on a “conservative approach,” adding that it would prefer stability to a quick product release.
“There was no problem in our submission of CTA. And there will be no problem to prove the equivalence of production when changing the production site in the CTA,” an official at Daewoong said. “But it was unclear to what degree China would recognize the equivalence. We chose to go stable even though the product launch could be delayed.”