The Chinese company Sinopharm is making a major investment in the development of an oral insulin pill by Oramed Pharmaceuticals in Israel, Globes reported on Sunday.
“Our Chinese partner is already building factories for our product at a cost of hundreds of millions of dollars,” said Oramed’s CEO Nadav Kidron.
Eighteen months ago, Oramed, whose current market cap is $84 million, announced a $50-million investment in the company from Chinese company HTIT, partially owned by Chinese company Sinopharm. But that was only a small part of the bigger picture, Kidron says.
Even though the product has not yet been approved for marketing in any country, Sinopharm has already begun investing in production facilities.
Oramed’s product reportedly reduces blood sugar levels in adult diabetes patients without causing hypoglycemia events. They are just now completing Phase IIb trial, and actual marketing of the drug is still several years away.
Dislosure of big Chinese backing was calculated to counter Oramed’s disappointing market performance. Its share price has dropped 23 percent early 2016, and its market cap is far below the valuation given the company in the investment by HTIT, according to Globes.
Oramed’s main competitor, Novo Nordisk, just announced discontinuance of its own program to develop an oral insulin pill. “The parties paying for drugs [the insurance companies] do not support the product’s cost-benefit model,” the company stated, a nice way of saying they don’t think it will be economically viable.
Kidron downplayed their withdrawal from oral insulin, pointing to differences between the two companies:
“Novo Nordisk is going through a difficult period,” says Kidron, “They replaced their CEO, and when a new manager steps in, he feels a need to make changes.
“Their positioning in the insulin market was a little different from ours,” Kidron adds, “They offered oral insulin as a substitute for an injection, while we are offering it to patients at an earlier stage, before they need to take insulin by injection. We are therefore competing with different drugs designed to prevent the deterioration of the disease. Their drugs are innovative and patent-protected, and are therefore more expensive. The underlying technology of the products is also different, and our products are likely to be sold at a substantially lower price than the product Novo Nordisk was aiming at.”