China poised for leadership in the expansion of the peptide industry, following the trend of GLP-1 drugs

In the rapidly expanding world of pharmaceuticals, China's peptide industry is making significant strides, positioning itself as a formidable contender in the global market. This is particularly evident in the GLP-1 segment, a sector that has seen a surge in growth due to the expiration of patents for major overseas products like liraglutide.

One of the key players in this race is Hangzhou Jiuyuan, a Chinese company with over 20 FDA DMF filings for liraglutide. However, as of now, there are no specific search results providing the names of Chinese companies that have applied for the development and production of generics for liraglutide expected on the market in 2024.

Meanwhile, Eli Lilly's GLP-1 triple hormone receptor agonist, retatrutide, has shown promising results in treating metabolic dysfunction-associated steatotic liver disease (MASLD), reducing liver fat content by up to 86% in Phase 2 clinical trials.

The potential for Chinese companies to overtake international counterparts is not just speculation. Their engineering and cost advantages have long been recognised, and this is particularly true in the peptide industry. Peptide companies, it seems, are more dependent on suppliers compared to small molecule drugs and other drug forms, making China's robust supply chain a significant advantage.

Chinese companies have already made their mark in the peptide market. For instance, Asymchem's total solid-phase synthesis capacity is expected to increase to 14,250 liters in June, while WuXi AppTec's new capacity expansion projects have increased the volume of solid-phase peptide synthesis reactors to 32,000 liters.

Moreover, Chinese companies have filed more DMFs for peptide-related active pharmaceutical ingredients (APIs) with the US Food and Drug Administration (FDA) than their US and European counterparts. A-share peptide CDMO Shengnuo Biotechnology has disclosed that the company's APIs for drugs like liraglutide have been exported to international markets.

Hybio Pharmaceutical has announced multiple times since last September that it received orders for GLP-1 APIs from overseas, with disclosed amounts reaching between RMB 556-568 million (USD 76.5-78.1 million). Tide Pharmaceutical, a peptide CRDMO company, aims to construct infrastructure, expand capacity, and develop customers, with an average cooperation time of 14 years and a customer retention rate exceeding 97%.

The global non-insulin peptide drug market is expected to exceed USD 100 billion by 2030, providing ample opportunities for growth. Expanding capacity is a direct method for companies in this rapidly growing market, and developing new processes, such as liquid-phase synthesis, is a breakthrough direction for some companies.

In 2024, the expiration of patents for major overseas products like liraglutide will make the volume growth of generic drugs inevitable. Many Chinese products are about to complete development and enter the market, such as Innovent Biologic's GLP-1 dual-target product mazdutide. The market share gap between leading Chinese and international companies in the upstream peptide market is not significant, indicating a competitive landscape that is poised for change.

As the GLP-1 segment, currently dominated by semaglutide and tirzepatide, opens up a new frontier, elevating the market to a new level, it will be interesting to see how the Chinese peptide industry navigates this exciting and competitive landscape.

China poised for leadership in the expansion of the peptide industry, following the trend of GLP-1 drugs