The challenger of a 6 billion large-scale product "breaks out of its shell."

When imitation is impossible, there is no reference for comparison, and imitation is either difficult or feared, why not try improvement?

China's Leading Small Molecule Innovative Drug: A 6 Billion Yuan Exclusive Market

In China, there’s a homegrown innovative drug without compound patent restrictions and relatively low technical barriers, yet it has not seen any successful "first generic" challengers. The original developer has monopolized the market for years, with sales continually growing, now reaching an annual figure of 6 billion yuan. This drug is Butylphthalide, a flagship product of CSPC Pharmaceutical Group.

Butylphthalide was developed in collaboration between CSPC and the Chinese Academy of Medical Sciences. It is China's third independently developed Category I innovative drug, following artemisinin and bicyclol. It is also the first Category I new drug with independent intellectual property rights in the field of cerebrovascular treatment in China, filling a gap in high-tech, domestically developed medicines in this area.

Butylphthalide's Development and Market Success

• Oral soft capsules (0.1g) were launched in China in 2005 as a Category I new drug.
• Butylphthalide Sodium Chloride Injection (100ml:25mg) was introduced in 2010. That same year, the combined sales of the two dosage forms surpassed 1 billion yuan and have grown significantly since, exceeding 6 billion yuan in 2020 and maintaining over 6 billion yuan annually in 2022 and 2023. The product accounts for nearly 30% of CSPC's revenue.

The development of butylphthalide can be traced back to the 1970s and 80s, when Professor Yang Junshan from the Institute of Materia Medica, Chinese Academy of Medical Sciences isolated a compound from celery seeds—butylphthalide. Professor Yang Jinghua later synthesized it chemically. Initially, the research focused on its potential for treating epilepsy, but due to its toxic side effects at therapeutic doses, this direction was halted.

In 1986, neuroscientist Feng Yipu shifted the research focus to cerebral ischemia, initiating further study on butylphthalide’s application in stroke treatment.

By 1991, Feng Yipu had fully committed to this field, and the research project, code-named "911," focused on butylphthalide’s efficacy in preventing and treating cerebral ischemia and stroke.

Between 1995 and 2005, it underwent Phase I to IV clinical trials, with the Phase IV trial being conducted across 94 hospitals in 11 cities, collecting data from 2,050 ischemic stroke cases. The results showed a 78.2% overall efficacy rate, leading to the formal launch of the soft capsule product (commercially known as Enbipu) in 2005.

Why No Generic Challengers Yet?

Butylphthalide is the first drug internationally to target multiple pathological mechanisms in acute ischemic stroke. It has earned numerous domestic and international patents and is widely used in treating acute cerebral infarction (ACI), especially in combination therapies, which have shown impressive results.

Despite over 30 years of research, the drug still holds a dominant market position with sales of 6 billion yuan annually. Its compound patent has expired, with its indication patent for acute ischemic stroke expiring in 2019, and the composition patent for the injection form expiring in June 2022. The patent for the soft capsule expires in December 2023.

In the realm of Chinese Category I innovative drugs with sales exceeding 1 billion yuan, newer small-molecule drugs like Zanubrutinib, Furmonertinib, and Aumolertinib have emerged as major players. However, excluding the significant overseas revenue from Zanubrutinib, butylphthalide remains the strongest small-molecule innovative drug in China.

Given that butylphthalide has no compound patent restrictions and most other patents have expired, it should, in theory, be relatively easy to replicate. In fact, 17 companies have registered active pharmaceutical ingredient (API) manufacturing capabilities, with seven already obtaining activation status, suggesting the technical difficulty isn't high. So why has there been no successful first generic challenge?

Potential Factors:

• The absence of generics may stem from regulatory, market, or strategic challenges.
• CSPC’s long-established market presence and strong clinical support could deter competitors.
• There may also be complexities in scaling up production or challenges in matching the efficacy of the original formulation.

Thus, while technically replicable, the unique market dynamics and established dominance of butylphthalide may explain why it still remains unchallenged.

Challenges in Imitating Butylphthalide: High Risk of Failure Doesn’t Stop Competitors from Entering

Despite the high risk of failure, many companies have attempted to develop generics of butylphthalide, a drug with an annual sales volume of over 6 billion yuan. However, due to the absence of a reference preparation and the complexity of the patent landscape, no generic version has succeeded yet.

Current Situation:

• Multiple companies have attempted to register butylphthalide as an active pharmaceutical ingredient (API). Four companies—Huahai, Xianju, Medisan, and Eilid—are currently in the bioequivalence (BE) stage for developing a generic version of butylphthalide soft capsules.
• For the sodium chloride injection form, only two companies have applied so far. Livzon Group was the first to file a generic application in 2016, benefiting from a regulatory window when no reference preparation was required. However, they faced a lawsuit from CSPC, accusing them of patent infringement, which led to Livzon losing the opportunity to launch the product without the reference preparation requirement. They later reapplied for clinical trials in 2017. Similarly, Nanjing Youke applied for market approval in 2017 but was denied. They attempted again in 2020, applying under the category of a 2.2 new drug, but this was also not approved.

The Main Barrier: Reference Preparation: Since neither the butylphthalide soft capsules nor the sodium chloride injection have been listed as reference preparations, no generic applications can be accepted until this changes. As long as there is no reference preparation publicly listed, CSPC will continue to monopolize the market.

Growing Interest Despite High Risk: The massive market potential of butylphthalide, often referred to as a "golden product," has attracted many pharmaceutical companies despite the lack of a reference preparation and the high risk of failure. Apart from Livzon, other companies, including Baonuo Pharma, Medisan, and Huahai, have completed their BE studies for the injection form, while companies like Qijian Biotech, Kelun Pharma, and Qianhu Pharma are in the process of conducting their BE trials.

Industry Experts’ Views: The difficulty in developing generics for butylphthalide stems from the lack of clarity regarding reference preparations and the uncertain regulatory landscape. Industry insiders have commented that the "uncertain timeline for the reference preparation and unclear rules for generics" are the main reasons for the challenges in replicating this "golden product." Without clear guidelines, companies either take a high-risk approach—"crossing the river by feeling the stones"—or wait for more regulatory clarity.

Regulatory Developments in 2023: In October 2023, the Center for Drug Evaluation (CDE) of the National Medical Products Administration (NMPA) released a series of policies aimed at clarifying the process for developing generics of drugs without reference preparations. These include:

• Guidelines for the Generic Development of Drugs Without Reference Preparations,
• Technical Requirements for Generics Without Reference Preparations, and
• Communication and Documentation Requirements for Generics Without Reference Preparations.

These documents are seen as opening up a "blue ocean" market for generics of drugs without reference preparations, but the actual barriers to entry remain high. According to policy experts, the regulatory authorities are taking a cautious approach toward these generics, summarizing the stance as "providing a path, but not encouraging it."

This is reflected in the fact that for drugs that already have approvals but lack reference preparations, the chance of filing for consistency evaluation is nearly impossible. New entrants must meet strict clinical value assessment requirements and conduct clinical efficacy trials. Only after approval can they be included in the chemical drug catalogue.

Future Outlook: For long-established, exclusive drugs like butylphthalide, how long they can continue to enjoy "protection from generics" under the lack of reference preparations remains uncertain and will depend on future policy updates. However, the path to challenging these established products remains fraught with regulatory and clinical hurdles, which has kept potential generic competitors at bay.

Challengers “Break Through” but Still Face Three Major Risks

The road to successfully developing a generic version of butylphthalide (丁苯酞) has proven extremely difficult. Many companies have tried and failed, leading to a shift in strategy towards creating improved new drugs as a way to circumvent the challenges. However, this path has also seen setbacks, with early attempts meeting with failure.

One such attempt was made by Nanjing Youke Pharmaceutical Co., Ltd., which aimed to develop a better version of butylphthalide injection. In 2020, it completed a bioequivalence (BE) study comparing its product with CSPC's butylphthalide sodium chloride injection. The results showed bioequivalence, but despite this, the company’s application for market approval in June 2020 was denied. Similarly, Beijing Haiyi Pharmaceuticals is conducting its own BE study, although it has not yet started recruiting participants. Thus, efforts to produce either generics or improved versions of the injection form have stalled, and no companies have moved forward with a generic application for the soft capsule form.

However, the landscape may be changing. A new challenger, Fosun Pharma, has emerged, and its improved butylphthalide product has entered the regulatory process. On September 27, 2023, Fosun Pharma announced that its subsidiary, Jinzhou Aohong Pharmaceuticals, had submitted an application to the National Medical Products Administration (NMPA) for its SBK010 oral solution, which is based on butylphthalide.

Why the Oral Solution Could Be a Game-Changer

The SBK010 oral solution is classified as an improved drug (Category 2.2) because it modifies the dosage form of butylphthalide, which traditionally comes in soft capsules. According to reports, SBK010 was compared to Enbipu, the commercial name for CSPC’s butylphthalide soft capsule. The clinical trial aimed to prove bioequivalence between a 7.5ml dose of SBK010 (136mg) and a 0.2g dose of the soft capsule.

Switching from a soft capsule to an oral solution has several advantages:

1. Easier swallowing for stroke patients.
2. Better bioavailability.
3. Simpler production process.

Industry experts view this move as a clever strategy to bypass the roadblocks that have hindered the development of generic and improved versions of butylphthalide. Since this new formulation is classified as an improved drug, it doesn’t require a reference preparation to begin research, nor does it need to go through large-scale clinical trials, which are mandatory for generics.

The "Three Risks" Facing the Challenger

Despite this promising approach, the oral solution is not without its risks. Fosun Pharma must navigate three major hurdles to succeed:

1. Bioequivalence Recognition: It remains unclear whether the CDE (Center for Drug Evaluation) will recognize the bioequivalence (BE) data comparing the oral solution with the soft capsule. If the BE data is not accepted, the entire strategy could falter.
2. Patent Barrier: CSPC still holds a key patent titled "A Butylphthalide Drug Composition and Its Preparation Method," which remains valid until June 2032. It is unclear whether Fosun’s oral solution will infringe on this patent. Particularly concerning is the patent’s broad claim over "drug compositions containing active ingredients," which could present a significant legal challenge. Fosun Pharma may need to invest considerable resources in navigating this patent risk.
3. Market Access and Procurement Challenges: Improved drugs like the SBK010 oral solution often don’t qualify as original or reference drugs, meaning they are unlikely to be included in China's centralized drug procurement (集采) process. Even if Fosun successfully overcomes the first two hurdles, it will still face the challenge of promoting its product in the market. Gaining insurance coverage and penetrating hospital networks will require significant effort and expense, especially compared to the easier path of launching a generic and participating in centralized procurement.

However, Fosun Pharma has the resources and capacity to pursue this "detour strategy," which might prove to be the only feasible path forward for challenging CSPC's monopoly.

While CSPC's butylphthalide still enjoys a strong "defense line," challengers are emerging, and the market landscape could begin to shift. The turning point might come when a reference preparation is finally determined, or it could be Fosun Pharma's successful breakthrough with its oral solution. Whether this challenger can successfully navigate the three major risks—bioequivalence recognition, patent issues, and market access—remains to be seen, but it marks a significant moment in the competition for the lucrative butylphthalide market.