HuaLing Pharma Builds Team to Target Type 2 Diabetes Drug

HuaLing Pharma (02552.HK) announced new progress in building its sales team at the beginning of 2025. On January 1, the company announced the appointment of Lu Yu as Vice President of Sales and Marketing. Lu has over 20 years of experience in multinational pharmaceutical companies and nearly 20 years of experience in the diabetes drugs and marketing field. Lu will lead the newly established sales and marketing department, fully responsible for the sales and promotion of the company’s core product Dapagliflozin (brand name: HuaTangNing).

At the same time, HuaLing Pharma has officially ended its commercialization cooperation with Bayer Healthcare. In November 2024, HuaLing Pharma announced that its subsidiary, HuaLing Pharma Technology (Shanghai) Co., Ltd., had issued a written notice to Bayer expressing its intention to transition the commercialization responsibilities of the type 2 diabetes product Hu

TangNing in China to HuaLing Pharma starting from January 1, 2025.
HuaLing Pharma previously stated in an interview with Time Finance that the decision to terminate the cooperation was initiated by HuaLing Pharma and that both parties reached an agreement after consultation, which aligns with the interests of both sides. Currently, HuaLing Pharma has officially regained the commercialization rights of HuaTangNing in China and is continuing to promote it through a self-built team. The first batch of sales personnel has already been on board and is actively conducting sales promotion activities. Although HuaLing Pharma has not disclosed the next promotional plan for HuaTangNing, how Lu will advance the related commercialization work and how this core product will be sold has become a focus of industry attention.

HuaLing Pharma is a company focused on innovative drug research and commercialization, listed on the Hong Kong Stock Exchange in 2018. According to the company’s official website, HuaTangNing is currently the only product commercialized and marketed by HuaLing Pharma. HuaTangNing is a diabetes drug targeting glucose-sensing glucose kinase, aimed at enhancing glucose sensitivity and improving blood glucose homeostasis in patients with type 2 diabetes. This drug is the world’s first dual-function glucose kinase activator (GKA), approved for marketing by the NMPA in September 2022 for monotherapy or in combination with metformin to treat adult type 2 diabetes. In November 2023, HuaTangNing was included in the National Medical Insurance Directory, effective from January 1, 2024, with its price reduced from 341.95 yuan per box to 124.88 yuan per box.

The addition of diabetes market veteran Lu Yu is aimed at advancing the subsequent commercialization process of HuaTangNing. Public information shows that Lu graduated from the Pediatric Department of Inner Mongolia Medical University and obtained an International MBA-Novo Nordisk Management Certificate from Peking University. Before joining HuaLing Pharma, Lu held senior positions in two multinational giants in the endocrine market, including National Senior Business Director at Eli Lilly China and Senior Regional Business Director at Novo Nordisk. In these positions, Lu was responsible for the sales and promotion of the entire range of diabetes products in key national markets. Lu has an in-depth understanding of the national key markets for diabetes drugs and nearly 20 years of relevant work experience.

HuaTangNing is a major contributor to HuaLing Pharma's performance. According to financial data, in the first half of 2024, sales of HuaTangNing reached 846,000 boxes, a significant increase compared to 212,000 boxes in the same period of 2023. Since its launch in October 2022, a total of 1.15 million boxes have been sold, generating total revenue of 197 million yuan in mainland China. However, in the first half of 2024, HuaLing Pharma's gross profit was 47.8 million yuan, with a gross profit margin of 46.5%, down from 62.6% in the same period of 2023. The decline in gross profit margin is primarily related to the price reduction of HuaTangNing. HuaLing Pharma stated in its interim report that as the production scale of HuaTangNing tablets expands, it expects the gross profit margin to rise.

Lu expressed after his appointment that, faced with the unmet medical needs in the diabetes field and the rapid growth trend of the Chinese pharmaceutical market, he looks forward to working with the HuaLing team to expand the brand awareness and market share of HuaTangNing and achieve milestone sales in the coming years, realizing both the economic and social value of innovative drugs.

HuaLing Pharma and Bayer reached a cooperation relationship regarding the commercialization of HuaTangNing in China in August 2020. According to the agreement, Bayer obtained exclusive commercialization rights for HuaTangNing and received service fees based on a certain percentage of HuaLing Pharma's net sales. HuaLing Pharma received a 300 million yuan advance payment and additional sales milestone payments up to 4.18 billion yuan. The agreement specified that HuaLing Pharma, as the drug marketing license holder, was responsible for clinical development, registration, product supply, and distribution work; Bayer, as the promotional service provider, was responsible for market marketing, promotion, and medical education activities for the product in China. The two parties initially shared net sales revenue from the product in China and adjusted the revenue distribution ratio when sales reached certain levels.

Before their “separation,” HuaLing Pharma and Bayer collaborated with 80 primary distributors, successfully entering the pharmaceutical market in 31 provinces and municipalities in China. According to the mid-year report for 2024, as of the report period, HuaTangNing accelerated its entry into hospitals in Shanghai, Beijing, and Tianjin, resulting in a significant increase in sales. More than 2,100 hospitals and over 2,900 pharmacies have prescribed HuaTangNing, compared to 143 hospitals and 1,080 pharmacies in the first half of 2023. In the first half of 2024, HuaTangNing's sales channels mainly came from hospitals, pharmacies, and online pharmacies, accounting for 72%, 20%, and 8%, respectively.

To ensure sufficient supply, HuaLing Pharma stated in its interim report that “the production capacity of Dapagliflozin continues to expand, and it is expected that production capacity will exceed 3 million boxes in 2024. The company has established new processes with greater capacity in collaboration with partners and is undergoing regulatory review by production licensing authorities.”

Four years after the signing of the above agreement, HuaLing Pharma and Bayer ended their commercialization cooperation related to HuaTangNing promotion. On January 1, 2025, HuaLing Pharma officially regained the commercialization rights for HuaTangNing in the Chinese market and is now responsible for its commercialization.

Time Finance previously learned from HuaLing Pharma that as of the announcement published on November 22, 2024, the milestone payments received from Bayer amounted to approximately 1.5 billion yuan, of which 1.2 billion yuan remains unamortized and will be recognized as revenue in 2025. Moreover, milestone payments will not be returned due to the termination of the cooperation.

HuaLing Pharma stated, “We believe that terminating the cooperation is beneficial to our profit targets, and this is an opportunity for HuaLing to build its commercialization team independently. Currently, we are mainly still in the research and development stage of the industry chain. Through Bayer's efforts in the past two years, we have achieved relatively good results in medical education and hospital entry. The company will currently build its sales team through internal transfers and external recruitment to maintain sales in core markets and will continue to seek potential partners in the future.”

At present, HuaLing Pharma is also exploring the development of new indications for HuaTangNing, including kidney diseases, neuropathic diseases, eye-related diseases, cognitive disorders, and cancer. In terms of international expansion, HuaLing Pharma is conducting Phase I research on its unique advantage of restoring GLP-1 secretion in diabetes and obesity patients in the U.S. Recently, HuaLing Pharma announced the successful completion of the Phase Ia clinical study of its second-generation glucose kinase activator (GKA) in the U.S.