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[News] Hua Medicine Announces 2022 Annual Results

Hua Medicine

Mar 30, 2023

2157

March 30, 2023 - China, Shanghai

First-in-class HuaTangNing (华堂宁^®) approved - nationwide commercialization fully initiated

Hua Medicine (the "Company", HKEx stock code: 2552), announced the audited consolidated results of the Company and its subsidiaries for the year ended December 31, 2022 (the "Reporting Period"). During the Reporting Period, the Company has achieved breakthrough development, as its self-developed global first- in-class (FIC) glucokinase activator (GKA) HuaTangNing (华堂宁^®) (aka. dorzagliatin) was successfully approved, offering Type 2 diabetes (T2D) patients in China a novel oral treatment designed specifically to restore the autonomous physiological regulation of blood glucose homeostasis. In collaboration with our commercialization partner in China, Bayer Healthcare Company Limited (Bayer), a national distribution network has been established. The Company's strengths in innovation and R&D have been widely recognized by the academic community and applicable scientific and medical organizations worldwide.

For the year ended December 31, 2022, total expenditures incurred by the Company was approximately RMB278.7 million. From the time of first commercial sales at end of October 2022 through December 31, 2022, approximately 53,000 packs of HuaTangNing (华堂宁^®) was sold, generating sales revenues of approximately RMB 17.6 million. As of December 31, 2022, our cash position was approximately RMB490.6 million. In January 2023, the Company has received an aggregate milestone payment of RMB 400 million from Bayer.

The Company also made remarkable achievements in clinical research, in addition to the historic breakthrough of HuaTangNing's (华堂宁^®) commercialization. In May 2022, two peer-reviewed papers on the Phase III clinical trial results of dorzagliatin were published online simultaneously by Nature Medicine, a leading international medical journal. This was the first time for Nature Medicine to publish papers on the Phase III clinical trial of a first-in-class diabetes drug with Chinese researchers as the first and corresponding authors, which has attracted wide attention worldwide. In June 2022, at the American Diabetes Association (ADA) Annual Scientific Session, the Company presented several clinical findings of dorzagliatin, proving the role of dorzagliatin in improving β-cell function, early-phase insulin secretion and glucose sensitivity, as well as remission of diabetes drug discontinuation in patients with Type 2 diabetes. In December 2022, the World Health Organization (WHO) listed dorzagliatin in its ATC classification system, which was the first GKA drug in the system.

Dr. Li Chen, the founder and CEO of Hua Medicine, said, "Hua Medicine has made milestone progress in 2022. The approval of HuaTangNing (华堂宁^®) as a Class I new drug and its commercialization is truly significant, as it takes Hua Medicine to the next level while making a major breakthrough in China's FIC drugs for chronic diseases. Hua Medicine is working with our partners to benefit more Chinese patients and contributing to the health of Chinese people. Over the years, Hua Medicine has focused on unmet clinical needs to develop FIC drugs, proving China's R&D capabilities in FIC drugs. In the future, Hua Medicine will relentlessly follow our original and continuing aspiration of "China leads pharmaceutical innovation" and bring new and better drugs treating metabolic diseases to Chinese and global patients.

Progress of clinical research and company operation

●	In October 2022, we received formal notice of the commercial approval of our HuaTangNing (华堂宁^®) (aka dorzagliatin) from the National Medical Products Administration (NMPA) of China. HuaTangNing (华堂宁^®) is the first approved glucokinase activator (GKA) worldwide.
●	HuaTangNing (华堂宁^®) was approved for two indications, both to improve blood glucose control for T2D patients, as monotherapy for T2D patients, or in combination with metformin in metformin tolerated T2D patients to control blood glucose level.
	●	In addition, three allowances were included in the approval of HuaTangNing (华堂宁^®). For patients with chronic kidney disease (CKD) and Type 2 diabetes (i.e.,diabetes kidney disease), no dose adjustment is required. In addition, the combination with either empagliflozin (SGLT-2 inhibitor) or sitagliptin (DPP-IV inhibitor) is expected to better improve blood glucose control and pancreatic islet functions in T2D patients than either empagliflozin or sitagliptin taken alone.
	●	In the official label approved by the NMPA, HuaTangNing (华堂宁^®) is identified as a GKA, which acts on glucokinase targets in pancreatic islets, intestinal endocrine cells, liver and other glucose storage and output organs, and improves impaired glucose-stimulated insulin secretion and GLP-1 secretion in T2D patients, and thus improves β-cell function and reduces insulin resistance. Accordingly, it improves blood glucose homeostasis in patients with Type 2 diabetes and has a mechanism of action designed specifically to restore the autonomous physiological regulation of blood glucose homeostasis.
●	By the end of October 2022, we recorded our first commercial sales of HuaTangNing (华堂宁^®). Commercial sales of HuaTangNing (华堂宁^®) were made through hospitals, retail pharmacies and online channels in China. The commercialization of HuaTangNing (华堂宁^®) represents the first time globally in almost ten years that a new mechanism of action to treat Type 2 diabetes is introduced, and the first time in history that a global FIC drug for Type 2 diabetes is introduced first in China.
●	The commercial approval and launch of HuaTangNing (华堂宁^®) entitled us to receive an aggregate milestone payment of RMB400 million from our commercialization partner in China, Bayer. We received the RMB400 million cash payment in January 2023.
●	The initial commercialization of HuaTangNing (华堂宁^®) in China has been very successful and well received by the medical community and patients. Due to significant demand and initial launch supply constraints, we voluntarily restricted sales within the two months after the first week of launch to ensure adequate continuous supply was available for patients who successfully secured HuaTangNing (华堂宁^®) prescriptions.
●	In December 2022, we acquired 100% equity interest in Nanjing AscendRare Pharmaceutical Technology Co., Ltd (“AscendRare”). AscendRare is principally engaged in conducting pancreatic islet research-based development of new drugs for islet-related diseases, including congenital hyperinsulinism and diabetes, both in rare disease indications as well as for broader metabolic disorders.
●	Other progress of clinical research and business operation include:
	●	In February 2022, the Company announced a supply agreement with WuXi STA for the commercial manufacturing to further enhance existing collaboration.
	●	In May 2022, we published two peer-reviewed papers on the Phase III clinical trial results of dorzagliatin in Nature Medicine, a top international medical journal. These two papers described and analyzed the clinical efficacy and safety characteristics of dorzagliatin monotherapy (SEED) in drug-naïve T2D patients and the combination therapy of dorzagliatin and metformin (DAWN) in patients who failed in metformin adequacy therapy for the treatment of Type 2 diabetes, respectively.
	●	In June 2022, three research findings on dorzagliatin were presented at the 2022 82nd American Diabetes Association (“2022 ADA”): i) an oral presentation at the 2022 ADA Scientific Sessions on the results of SENSITIZE, a clinical study demonstrating dorzagliatin improved insulin secretion and glucose sensitivity; ii) a post-hoc analysis of the Phase III trials of dorzagliatin to validate the potential of dorzagliatin in improving early phase insulin secretion and restoring glucose sensitivity in T2D patients; and iii) the results of the DREAM study from the dorzagliatin monotherapy (SEED) study to explore the potential of dorzagliatin in diabetes remission.
	●	In addition to offline sales channels, HuaTangNing (华堂宁^®) also achieved remarkable sales on the online channels at the beginning of its launch, leveraging on the Provisions for the Supervision and Management of Online Sales of Pharmaceuticals(《药品网络销售监督管理办法》)， which come into force recently. For the period from the first commercial sales at end of October 2022 through the end of January 2023, approximately 148,000 packs (unaudited) of HuaTangNing (华堂宁^®) have been sold, generating net sales revenues of approximately RMB49 million (unaudited).

Business outlook

●	We will strengthen sales through the three channels of online channels, retail pharmacies and hospitals, improve production efficiency and ensure adequate market supply.
●	We will continue to focus on the commercialization of HuaTangNing (华堂宁^®) in China and advancing development of our fixed dose combinations with dorzagliatin, as well as the development of our second generation GKA, with the potential for once daily administration and a more efficient manufacturing process.
●	We will continue to develop our newly-acquired glucokinase modulating compounds for congenital hyperinsulinism.
●	We will conduct new clinical trials to explore the potential of therapeutic and preventive in people with IGT with low-dose dorzagliatin.

Forward-looking statement
This article contains the statements regarding the future expectation, plan and prospects for Hua Medicine and the investigational product. The forward-looking statements made in this article relate only to the events or information as of the date on which the statements are made in this article. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this article completely and with the understanding that our actual future results or performance may be materially different from what we expect as a result of various risks, uncertainties or other legal requirements.

About Hua Medicine
Hua Medicine is an innovative drug development and commercialization company based in Shanghai, China, focused on developing novel therapies for patients worldwide with unmet medical needs. Based on global resources, Hua Medicine teams up with global high-caliber people to develop breakthrough technologies and products, which contribute a global innovation in diabetes care. As Hua Medicine's cornerstone product, HuaTangNing (华堂宁^®), targets the glucose sensor, glucokinase, restores glucose sensitivity in T2D patients and stabilizes the imbalance of blood glucose levels in patients. HuaTangNing (华堂宁^®) was approved by the National Medical Products Administration (NMPA) of China on September 30, 2022. It can be used alone or in combination with metformin hydrochloride-tolerated T2D patients. For those patients with chronic kidney disease (CKD) and Type 2 diabetes (i.e., diabetes kidney disease), no dose adjustment is required. Hua Medicine has partnered with Bayer, a leading global pharmaceutical company, to commercialize HuaTangNing (华堂宁^®) in China, benefiting diabetic patients and their families. HuaTangNing (华堂宁^®) has also demonstrated its potential of achieving diabetes remission in clinical studies to help millions of diabetic patients around the world.

For more information
Hua Medicine
Website: www.huamedicine.com
Investors
E-mail: ir@huamedicine.com
Media
E-mail: pr@huamedicine.com

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