Korean-developed potassium-competitive acid blockers (P-CABs) are gaining ground quickly in China. HK inno.N's (195940.KQ) K-CAB has climbed into the top tier of the local market with rapid growth, while Daewoong Pharmaceutical's (069620.KS) Fexuclue and Onconic Therapeutics' (476060.KQ) Zastaprazan are moving toward commercialization. Two of the five P-CABs currently approved in China are Korean-developed drugs. If Zastaprazan wins approval this year, Korean drugs will account for three of the six, or half the market.
Taixinzan, the Chinese brand name for K-CAB, entered 402 new medical institutions in the first half of this year, lifting sales more than 30% from a year earlier, according to a semiannual report from Luoxin Pharmaceuticals, HK inno.N's Chinese partner. The drug showed similar momentum a year earlier, when the number of institutions carrying it rose more than 30% from the end of the previous year to about 2,500 and sales jumped roughly 140% year-on-year. First-half revenue for Luoxin's digestive product line, including Taixinzan, rose 28.1% to 683.4 million yuan (about 140 billion won) from 533.66 million yuan a year earlier.
Taixinzan ranked second in China's P-CAB market last year, behind Takeda Pharmaceutical's Vocinti, known as Takecab, according to pharmaceutical market researcher Yiyao Mafang. Annual sales reached about 180 billion won, securing its place among the market leaders.
The strong Chinese sales are expected to boost royalty income at HK inno.N. Royalties from Taixinzan rose to 5 billion won in the second quarter from 4 billion won in the first, reaching an estimated 9 billion won in the first half. Full-year royalties are projected at about 21 billion won, up roughly 50% from a year earlier. With China accounting for 70% of K-CAB's global sales, expansion there is set to be the main driver of future global revenue growth.
Analysts see considerable room for further growth. All three of Taixinzan's indications — erosive esophagitis, duodenal ulcers and Helicobacter pylori eradication therapy — are listed on China's National Reimbursement Drug List (NRDL). Among P-CABs approved in China, K-CAB is the only product with reimbursement coverage for all three.
The drug also holds an advantage on pricing. Its patent protection in China was extended through December 2031 in the first half of this year, shielding it for now from generic entry and from price cuts under China's volume-based procurement (VBP) system. Takeda's Vocinti, by contrast, faces its compound patent expiration this month, with local generics already emerging, and has been included in the VBP program, setting up sharper price competition.
An injectable formulation is seen as another growth driver. Luoxin is running a Phase 2 trial in China of LX22001, an injectable version of K-CAB. With injectables accounting for about 40% of peptic ulcer treatments used in China, the expanded formulation is expected to add further growth. "Market share and royalties in China will keep rising on the back of broader reimbursed indications and the injectable development," said Jung Jae-won, an analyst at iM Securities.
Korean latecomers are also stepping up their entry into China. Daewoong Pharmaceutical's Fexuclue won Chinese approval as a treatment for erosive esophagitis in September last year and applied for insurance listing in June. The company is working through commercialization steps with a target of launching this year. It plans to terminate its supply contract with its existing Chinese partner and switch to direct sales through a local unit and other channels.
Onconic Therapeutics' Zastaprazan is also close to entering the market. Livzon Pharmaceutical Group, its local partner, filed for approval last August for the treatment of erosive gastroesophageal reflux disease and is awaiting a decision, which is expected in the fourth quarter.
Industry watchers say the addition of Fexuclue and Zastaprazan will strengthen the position of Korean drugs in China's P-CAB market while also intensifying competition with local players. "K-CAB has proven the market opportunity in China, and with Fexuclue and Zastaprazan joining, the influence of Korean P-CABs will expand further," an industry official said. "Given the size of the market, China will be a key market shaping the global growth of Korean drugs."
