FAST NEWS: Hutchmed, Zai Lab, Ascentage Drugs Land on China Reimbursement List
The latest: Products from Hutchmed (China) Ltd. (HCM.US; 0013.HK), Zai Lab Ltd. (ZLAB.US; 9688.HK) and Ascentage Pharma Group (6855.HK) were among 111 new drugs selected for new inclusion in the 2022 edition of China’s National Reimbursement Drug List under the nation’s national health plan.
Looking up: The inclusion of their products on the list will help the companies gain market share, boosting their future sales.
Take Note: Products are required to offer major price concessions in exchange for inclusion on the list. Reflecting that, the 111 drugs added to the latest list were forced to lower their prices by 60.1% on average. Thus, inclusion on the list may improve unit sales, but can severely erode a company’s margins.
Digging Deeper: Hutchmed’s selected product on the list is Orpathys, an oral MET tyrosine kinase inhibitor for the treatment of adults with non-small cell lung cancer, jointly developed with AstraZeneca (AZN.LON). Zai Lab got the intravenous infusion dosage forms of its Qinlock and Nuzyra drugs included on the list, the former used to treat advanced gastrointestinal stromal tumors, and the latter for bacterial pneumonia and acute bacterial skin and skin structure infections. Ascentage Pharma’s third-generation BCR-ABL inhibitor Olverembatinib, a drug for treating chronic myeloid leukemia, was included in the list.
Market Reaction: Zai Lab’s Hong Kong shares dropped 1.7% to HK$34.60 by the midday break on Thursday. Hutchmed’s shares were unchanged at HK$27.50 over that time, while Ascentage Pharma rose 2.7% to HK$24.70.
Translation by Jony Ho
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