Hua Medicine Announces 2021 Annual Results

Hua Medicine (the "Company", Stock Code: 2552.HK) today announces the audited annual results of the Company and its subsidiaries for the year ended December 31, 2021 (the "Reporting Period"). The Reporting Period witnessed significant milestones in the commercialization process of dorzagliatin. The New Drug Application (NDA) of dorzagliatin for the treatment of Type 2 Diabetes was submitted to, and accepted by, the China National Medical Products Administration (the "NMPA"). The Company has also been actively advancing the full-life-cycle management plans of drugs. Total expenditures incurred by the Company in 2021 was approximately RMB327.2 million, of which approximately RMB186.8 million was research and development expenses. As of December 31, 2021, the Company's cash position was approximately RMB675.2 million.
Hua Medicine has consistently focused on unmet clinical needs. After 10 years of breakthrough exploration, from the scientific theory of glucose homeostasis regulation to an innovative drug with a new and novel mechanism, the Company has successfully developed dorzagliatin, a first-in-class innovative glucokinase activator for Type 2 Diabetes. In recent years, with the theoretical support of glucose homeostasis regulation, the research and development of new drugs for the treatment of diabetes and its complications has gradually increased. Relying on the scientific thesis of "repairing sensors, reshaping homeostasis and fundamentally treating diabetes", dorzagliatin is expected to become a first-in-class innovative drug to be marketed first in China.
In addition, dorzagliatin has also demonstrated the potential of oral drug in diabetes remission in a clinical study. Based on the results of the DREAM study published in September 2021, dorzagliatin achieved a 52-week diabetes remission rate of 65.2% at week 52, without any glucose-lowering medication after the completion of the SEED study with early glycemic control. By achieving diabetes remission in the early stage of diabetes patients, dorzagliatin is expected to control or delay the occurrence and development of diabetes complications, offering feasible solutions to the medical burden and related social problems caused by diabetes.
At present, the NDA for dorzagliatin is under active review by the NMPA and Hua Medicine is actively working to obtain the approval of dorzagliatin as soon as possible. The Company will continue to strengthen its cooperation with Bayer, a leading Chinese diabetes and global healthcare enterprise. At the same time, it will work with WuXi AppTec, Sinopharm Group Co., Ltd., Desano, Raybow Pharmaceutical and other production and supply chain partners to jointly promote the stable production, sufficient supply and marketing of dorzagliatin. The Company will also seek opportunities to continue to expand the development opportunities of dorzagliatin in the European, American and Japanese markets, Southeast Asian market and the "Belt and Road" market to realize the value of innovation. In the future, the Company will explore the establishment of a management platform of chronic diseases, conduct scientific management of patients through big data, artificial intelligence and other means, and open up new prospects of chronic diseases.
Dr. Li CHEN, the founder, CEO and Chief Scientific Officer of Hua Medicine, said, "2021 was a breakthrough year for Hua Medicine. The Company's core product, dorzagliatin, became the first glucokinase activator diabetes treatment drug to submit a new drug application in the world. Dorzagliatin is a drug with new concept, new mechanism, new efficacy, new structure and new technology, and is expected to achieve effective control and outcome of diabetes through the new concept of diabetes management of 'fundamental treatment + peripheral treatment'. We look forward to the NDA approval regarding dorzagliatin as soon as possible, so as to benefit the patients with Type 2 Diabetes. Hua Medicine will continue to explore the health and development of the Chinese people, support the national strategy on the prevention and control of major diseases such as diabetes set out in the 'Healthy China 2030' initiative and realize the personalized treatment of diabetes."

Clinical Research Progress

-- In March 2021, we submitted a new drug application ("NDA") for dorzagliatin for the treatment of Type 2 diabetes ("T2D") to the National Medical Products Administration of the People's Republic of China (the "NMPA"), and we received notification from the NMPA that our NDA was accepted in April 2021. The NDA is currently under active review by the NMPA.
-- In September 2021 at the 6th China BioMed Innovation and Investment Conference, principal investigators of the DREAM study presented the extensive results from the clinical study. The main objective of the DREAM study was to evaluate the ability of T2D patients who participated in our SEED Trial and achieved glycemic control as defined by investigators, to maintain normal to near-normal HbA1c levels (i.e., remission of T2D), without any glucose-lowering medication after the completion of the SEED Trial for a minimum follow-up period of 52-weeks. The results showed that the subjects had a 52-week diabetes remission rate of 65.2% at week 52 (applying the Kaplan-Maier methodology) during the research period.
-- We presented data from our 52-week SEED and DAWN Phase III registration trials, as well as Phase I trial HMM0112 of dorzagliatin in combination with empagliflozin (a SGLT-2 inhibitor) at the 2021 American Diabetes Association's Scientific Sessions, demonstrating glucose control benefit using the combination of dorzagliatin and empagliflozin.
-- We presented additional data from our Phase I trial HMM0111 of dorzagliatin in combination with Sitagliptin (a DPP-IV inhibitor) at the 2021 American Diabetes Association's Scientific Sessions, demonstrating that dorzagliatin regulates GLP-1 secretion and has a synergistic effect on blood glucose control in patients with T2D in the United States.

Company Operation Progress

-- In anticipation of dorzagliatin commercialization, we continue to work with Bayer, our commercialization partner in China, on launch strategy and commercialization preparation.
-- In September 2021, we entered into a strategic agreement with Sinopharm Group Co., Ltd. (Hong Kong Stock Code: 1099), to cooperate in logistics warehousing, supply chain management and channel data analysis, and to jointly promote the commercialization of dorzagliatin for its anticipated market launch in China.
-- In October 2021, we enhanced our existing collaboration with WuXi STA for the commercial supply of dorzagliatin by entering into an expanded agreement with WuXi STA, and for which we held a signing ceremony and announced the agreement in February 2022.
-- We established Hua Medicine drug manufacturing company at Shanghai Lingang Special Area for ensuring adequate dorzagliatin commercial supply, and we also secured land for the construction of a manufacturing facility.
-- We continue to make filings and applications regarding IP rights globally around our discoveries in glucokinase, including for fixed dose combinations with dorzagliatin, as well as a second generation glucokinase activator.

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Financial Highlights

For the year ended December 31,2021
-- Cash position was approximately RMB675.2 million.
-- Total expenditures incurred by the Company was approximately RMB327.2 million, of which approximately RMB186.8 million was research and development expenses, representing a decrease of approximately RMB34.1 million or approximately 15%).
-- Loss before tax decreased by approximately RMB67.4 million or approximately 17% to approximately RMB325.7 million.
-- Loss and total comprehensive expense for the year decreased by approximately RMB68.3 million or approximately 17% to approximately RMB325.3 million.

Business Outlook

-- We are working with the NMPA in obtaining approval for our NDA for dorzagliatin. If approved, we plan to commercialize dorzagliatin in China with our partner, Bayer, to seek entry into the National Reimbursement Drug List (the "NRDL"), and to expand its use as a cornerstone treatment for T2D as monotherapy or in combination with other approved antidiabetic drugs.
-- We are planning to publicize the results of our SENSITIZE Trial in 2022.
-- We are planning to initiate clinical trials in the United States for Type 1 diabetes with dorzagliatin.
-- We are also advancing development of our fixed dose combinations with dorzagliatin, as well as our second generation glucokinase activator.

About Dorzagliatin

Dorzagliatin is an investigational first-in-class, dual-acting glucokinase activator, designed to control the progressive, degenerative nature of diabetes by restoring glucose homeostasis in patients with Type 2 diabetes. By addressing the defect of the glucose sensor function of glucokinase, dorzagliatin has the potential to restore the impaired insulin and GLP-1 secretion of patients with Type 2 diabetes and serve as a cornerstone therapy targeting the root cause of the disease. Two Phase III registration trials for dorzagliatin monotherapy and the combination of dorzagliatin and metformin have been completed in China, as well as studies on drug mechanism synergy with sitagliptin (DPP-4 inhibitor) and empagliflozin (SGLT-2 inhibitor). In an investigator-initiated study following the monotherapy Phase III SEED Trial, the DREAM Study, a 65.2% diabetes remission rate was observed at week 52 without any antidiabetes medication during the 52-week research period. The Company has obtained the "Drug Manufacturing Permit" of dorzagliatin issued by the Shanghai Municipal Drug Administrative Bureau, and has submitted its NDA to the National Medical Products Administration, so as to realize the "First in Global, Start from China" mission objective for the benefit of diabetic patients worldwide.

About Hua Medicine

Hua Medicine is an innovative drug development company in China focused on developing novel therapies for patients worldwide with unmet medical needs. Hua Medicine teams up with global high caliber people and integrates global resources to explore breakthrough technologies and products, and accelerate global innovation in diabetes care. Targeting the glucose sensor glucokinase, dorzagliatin, a novel oral diabetes drug, restoring glucose sensitivity in T2D patients, has completed SEED and DAWN registration trials, and filed NDA in China. This global first-in-class glucokinase activator (GKA) has demonstrated its potential of achieving diabetes remission to help millions of diabetic patients around the world