I think we can start, guys.
Great. Good morning, ladies and gentlemen. Thank you for participating in the 2021 Annual Results Conference Call for Hua Medicine, hosted by ICA Investor Relations, the company's Investor Relations advisor. Before we start this call today, please note that the call will be recorded. On the call we have Dr. Li Chen, founder, CEO, and chief scientific officer, and Mr. George Lin, chief financial officer and executive director of Hua Medicine. Dr. Chen will start with an overview of the company's highlights, including key business and pipeline updates. Mr. Lin will give his thoughts on the numbers and the updated guidance before we open for Q&A. Please note that this call may contain forward-looking statements. For details, please refer to the disclaimer on today's presentation deck. With that, I will now turn the call over to Dr. Chen. Please go ahead. Thank you.
Good morning, everyone. Thank you very much for coming to Hua Medicine 2021 annual results presentation. Hua Medicine is a highly differentiated biotech company. We focus on diabetes care in China for the world. Innovation in diabetes is a must. It is a mission possible to get it done in China. Last year, Hua Medicine has been focused on the three major areas to ensure Dorzagliatin commercialization is well-prepared. First, we submitted our first-in-class glucokinase activator, Dorzagliatin, for diabetes in March 30, 2021. It got accepted by the NMPA, the Chinese regulatory agency, in April 23.
In the same year, the company working with the regulatory agencies have completed six technical reviews in the divisions within CDE and completed seven on-site audits by the Chinese regulatory agencies, which includes four clinical research centers and three manufacturing centers. All those audits went really well. The technical reviews has completed in 2021 at the end of the year. At the beginning of this year just before Chinese New Year, we have successfully completed the clinical KOL review meeting for dorzagliatin. Now we're under the stage of working on the drug label and related activities with agency and expecting this globally first-in-class glucokinase modulator get approved this year.
For two indications, one is the monotherapy for drug-naive type 2 diabetes patients. The other is add-on to metformin for the metformin-tolerated type 2 diabetes patients. This is a very effective investment into this larger unmet medical needs in this area with two indications approval, and symbolize a very successful milestone for Hua Medicine. During the process of preparing the NDA approval, we have been working with our partner, Bayer, and preparing the drug launch in the areas of developing the first-tier distributors, the market access, and most importantly, the education about glucokinase and dorzagliatin in the area of diabetes care to the physicians and then KOLs. Together with this activity with Bayer's, we have formed alliance with Sinopharm to get their supply chain aligned through a strategic collaboration.
At the same time, we have announced recently, we have the strategic agreement for the drug supply with WuXi STA, and then as well as soon we're going to, let people know that our partnership with Desano for the drug product, manufacturing is going to be online. The manufacturing factory in Lingang, is up on construction. This is in the anticipation for the, in the future, the additional requirement for the drug supply in the commercial, activities. Well, as many of you have known that, dorzagliatin is a really novel first-in-class anti-diabetic drug. Well, it is really focusing on glucokinase. Glucokinase is a glucose sensor and then diabetes gene and a drug target. Its most important facts has been illustrated by, Dr.
Franz Matschinsky showing that glucokinase defects can cause permanent neonatal diabetes when it's a homozygous mutation in the patients, and also can cause hyperinsulinemia with hypoglycemia when the newborn was born. It's a very important diabetes gene, and once this gets defect and then impaired, the glucose control system went off, and then the system went down. Hua Medicine together with our partners have been working on this very important drug target over the last 10 years, has been able to design dorzagliatin, and then demonstrate it in the series of clinical studies showing that dorzagliatin improves the glucose sensitivity, and most importantly, be able to repair the glucose-stimulated early insulin secretion, and then be able to achieve a effective glycemic control with a very good safety and then tolerability.
I won't go into details on the list of clinical trials and the results that we have published during the course of our study, but just highlight that in the early studies, exploratory phase, and we have shown dorzagliatin improved early phase insulin secretion in type 2 diabetes patients, which means this repairs the glucose-stimulated insulin secretion, the fundamental cause of type 2 diabetes when this function is impaired. In the phase III, two phase III studies, the SEED and the DAWN study, we have shown that through improved GSIS process and we'll be able to achieve very good blood glucose control without any type 2 diabetes patients usually suffer from the hypoglycemia or weight gain when they treated with insulin or insulin secretagogues. This was not seen with the dorzagliatin.
The composite control rate, that means blood glucose control very well, no hypoglycemia, no weight gain impacts, are very good among all the OADs. That means the oral antidiabetics. This is further demonstrating the mechanism of action through repairing the glucose sensor and able to restate the glucose homeostasis and then which lead to the diabetes remission. That was shown in the DREAM study that the patients who completed the SEED study and achieved blood glucose control with A1c less than 7% went down for a 1-year follow-up. After this 12 months follow-up without any drug, 65% of the subjects maintained very well blood glucose control, which is what we call drug-free diabetes remission.
This is further demonstrated that, after repairing the glucose-stimulated early insulin secretion, we'll be able to repair the glucose homeostasis and then control the blood glucose without drug. Obviously, the later mechanistic study with the SENSITIZE study and then HMM0111 and the 110 study has further demonstrate the mechanism action of this drug and also its benefit in repairing the GLP-1 secretion in the type 2 diabetes patients, and be able to extend this application to all stage chronic kidney disease subjects with glycemic control needs without any dose escalation. This is a very important achievement, showing that dorzagliatin going to change the diabetes care and then drive the care to the diabetes remission.
In the next slide, we basically showing that, in the process of managing diabetes, there's two fundamental factors that require to control diabetes. One is the essential factor, which is repairing the glucose-stimulated insulin secretion, as I mentioned before. The other sufficient factor is basically to control blood glucose, at the same time, control the body weight. There's a lot of attempts in the past that in the RISE study you can see with metformin or GLP-1 plus metformin or glargine, which is insulin, plus metformin, you can control the blood glucose. Then we also know that, we can control the body weight with, exercise or GLP-1.
When you stop the drug and then the patient went back to the condition, basically the relapse of blood glucose and alas, the effects in the beta cell function improvement was seen in the RISE study. In the other study, called the DIRECT study, which is a weight loss-driven diabetes care. Now, if the patient lost 15 kg of body weight, at the same time lost the liver fat and the pancreas fat. The determining factor for whether you'll get diabetes cure or remission or not is whether you can repair the glucose-stimulated early phase insulin secretion. If you cannot fix this GSIS, then you will not be able to get the remission or the blood glucose control.
Now, through our study and the studies in the RISE and the DIRECT, we can clearly see that diabetes, although there's a lot of factors related to the type 2 diabetes and a lot of genes in there, and then the fundamental root cause of the gene is glucokinase. Repair this function, restore the GSIS, is critical for treatment and then cure diabetes. Next slide, basically showing that what we have done for our understanding achieving the diabetes remission and what is required. In the study, we took the subjects who participated in the SEED study. The SEED study, as you may remember, is the monotherapy treat the drug-naive type 2 diabetes patients. We got 40 centers enrolled in this. Overall, 310 subjects got treated.
After 24- or 48-week study at all 40 centers, 45% of the subjects have reached glucose control, which means their HbA1c is now less than 7%. Out of this 45% of subjects, 69 subjects in 5 research centers with average A1c 6.61% and a 2-year diabetes history run into this DREAM study. The DREAM study got followed up without any blood glucose control agents for 1 year. We can see that after 1 year, 65% of the diabetes patients remain remission. This has firmly demonstrated that the drug treatment can induce the diabetes remission.
The root cause of this was showing in the next slide that, when the subjects in the DREAM study, when they entered into the SEED study, they have an average A1c, and then they have a very important factors in the early phase insulinogenic index, which related to the 30 minutes C-peptide over 30 minutes glucose ratio, very important measure for the glucose sensitivity and early insulinogenic capability. You can see that, for the ones achieve the remission they have significant higher in the ratios, in the glucose sensitivity ratios. On the other side, we also seen that this group of patients who achieve remission has a very good disposition index, which also measures the body's capability of controlling blood glucose.
Which means after the SEED study, there are a portion of the subjects who has achieved a much better glucose sensitivity improvement and a disposition index improvement. This improvement are important for the remission. This is in It is very consistent with the theory where Dr. Franz Matschinsky has proposed that glucokinase is a glucose sensor and it play a key role in the glucose homeostasis. Well, the next slide will talk a little bit more about glucose homeostasis. Right. The glucose homeostasis by nature is to control the blood glucose in a very narrow range between 3.9-6.5. That's the normal range.
Recently, ADA, the American Diabetes Association, and the Chinese Diabetes Society has published the guidelines for the new criteria for the blood glucose control, instead of using HbA1c as an average measure of the blood glucose. It is important to know the fluctuation of the blood glucose during the day, right? This is the concept of being able to control the blood glucose in the healthy range. That's the time in range, which means how much time of one's blood glucose is within the normal range within 24 hours. It's so important new concept to address the diabetes and the impact of diabetes, which means the blood glucose fluctuation can cause diabetes complication, 10+ major function organ disaster. Okay. Here, now in the SEED study and the DAWN study, we have done a subgroup analysis using our algorithm.
We find that the type 2 diabetes patients with the subtype C have achieved a very good time in range improvement, starting from 33% to 61% in the SEED study. In the DAWN study, from 14% to 50%. This is why it's so important when we fix the sensor, and then we control the blood glucose homeostasis, and then reduce the blood glucose fluctuation, and it will lead a much larger benefit to our patients. Now, in the next slide, we will show a few other advancement with this drug, right? The important thing for the drug development is that we understand the root cause of the disease. Now we know dorzagliatin can address the root cause of type 2 diabetes, and that's not probably sufficient. We also need to repair the system, right?
The sensor, glucokinase, and the surrounding system that control the glucose homeostasis. That's where the combination of dorzagliatin with existing therapy, DPP4 inhibitor sitagliptin or SGLT2 inhibitor empagliflozin to see how well they all work together to control blood glucose. Well, no surprise, right? Both combination offers greater than 30% more blood glucose reduction over the single agents. This will give us the potential to developing the fixed-dose combination with these agents, and then using that to treat different stage of type 2 diabetes patients, and then help them to get into remission. Before this, the other factors I've shown in the next slide is that our ability to extend our application into the DKD, that means the diabetic kidney disease patient without an adjusted dose. Why is that?
For many oral antidiabetic drugs based on the disease guideline, we find that because the secretion of the drug, many of them go through kidney. When the kidney function impairs, the blood glucose cannot be very well controlled with the drug. In this case, the levels of the drug will fluctuate depending on the stage of the kidney function. Dorzagliatin is not secreted through the kidney. It's less than 10% goes through the kidney, and majority goes to liver. In that case, the kidney function will not impair or impact on dorzagliatin's usage. It can be used directly into the DKD patients and control their blood glucose. This is the additional benefit to our drug, with its very novel chemical structure and the formulations designed to this drug.
Now, if we look at the overall strategy of doing dorzagliatin in next slide, we can see that, dorzagliatin, because it's treating the underlying cause of the disease and then restore the glucose homeostasis through fix the glucose sensor, and it can be used nicely in the diabetes prevention, where, by the way, the new report from the International Diabetes Federation is that, the global impaired glucose tolerance subjects has now reached to 541 million. Very big population, just as big as the total diabetes population, which I believe is around 540 million diabetes. Collectively, impaired glucose tolerance, impaired glucose-stimulated insulin release have caused ten, well, basically it's a billion patient population, right?
In this, we have shown that dorzagliatin is effective for drug-naive patients, which is early patients, through the SEED study and then DREAM study showing we can reach the diabetes remission. We are showing that through the combination, we can work on the diabetes complication, and we are now expanding the opportunity of the diabetes cure to the diabetes prevention by looking to dorzagliatin for the IGT patients. Through dorzagliatin alone or in combination with existing diabetes therapy, which is listed over here on the slides, we'll be able to provide a systematic solution for the diabetes care, which leads to the prevention, remission, and then rejuvenation.
This is a strategy where Hua Medicine will continue as we're moving along, and then most importantly, when we launch dorzagliatin this year, so that we'll be fully realizing the potential of dorzagliatin and the glucokinase platform. In the next slides, I will quickly show you that what we going to do in the exploratory research area. Now, we have successfully completed the DREAM study led by Professor Jianhua Ma, Zheng Jiao, and Binsheng Wang and so on. This is very important to show that fix the sensor, repair glucose homeostasis, and then be able to treat the underlying cause of the disease and lead to remission. We have successfully completed the SYNTHESIZE study led by Professor Juliana Chan in Hong Kong. Well, what Dr.
Juliana Chan has found that, you know, we all know the MODY patients is a heterozygous mutation of GCK in patients. In those patients, they get one good copy of GCK protein and then one bad copy of GCK protein. In these patients, we conduct the mechanistic study, and it's showing that dorzagliatin be able to improve the glucose sensitivity and insulin secretion, and this is going to be reported soon in the ADA meeting this June. What is important is that, we know MODY-2 is the defect of GCK, right? The GKA with a single dose will be able to correct the defect. That means dorzagliatin can directly act on the fundamental root cause of the diabetes, right? That's the glucokinase activator.
This is very exciting work, and then Juliana Chan is going to talk about it in the ADA, and then you guys all are very welcome to getting to this. The other mechanistic study is going to be initiated by Professor Rita Basu, and then it's an NIH grant. This is a study going to investigate how glucokinase activator works. Back to 2000, Dr. Rita Basu, together with her mentor, Dr. Robert Rizza, the head of ADA at the time, have shown that in the type 2 diabetes patients, there is a defect in the glycogen formation and in glycogenolysis. In this defect in type 2 diabetes, the patients cannot convert glucose into glycogen in the liver and then store it.
This defect was proposed to be related by the defect of glucokinase in the liver. Well, that was the hypothesis in year 2000. Now, finally, Dr. Rita Basu will be able to have dorzagliatin to study this and then prove this scientific hypothesis showing that dorzagliatin or glucokinase activator will be able to enhance and then repair the glycogenolysis and then control the hepatic glycogen metabolism, and then eventually is going to compare this effect with metformin and insulin. We are looking forward to showing that extent outstanding result come from this study. Most importantly, Dr. Basu's lab has this most exciting technology we call the triple-tracer technology that really be able to use a non-invasive technology to understand the glucose metabolism in the human body in the disease setting.
We are very excited and looking forward for that result to come out. In the next few slides, I will quickly discuss our outlook. Well, intellectual property is the lifeline of biotech company and pharmaceutical companies. Over the years, while we are advancing dorzagliatin into market, and we are also strengthening our patent portfolio, working with leading intellectual property firms, and have established the patent families around the compound, intermediate process, most importantly, the formulation and the fixed-dose combinations, which has been all branded in China and some already in EU and the U.S. Now, in advancing our understanding of dorzagliatin, its role in the gluconeogenesis and in the patient population, we have also developed the second-generation dorzagliatin.
The priority patent has been filed, and then we are working on with several agencies to now speed up this patent application around the world. At the same time, looking forward to developing the first generation and the second generation with a different focus. The next slide was showing that after we got a patent settled down, we really started looking to which are the patient population with unmet medical need now can benefit, you know, in the diabetes care and then can benefit from the dorzagliatin. The type one diabetes in U.S. is the group of patients that require more care from us. For the type one diabetes, as many of you know, they are insulin-dependent diabetes. They rely on insulin for their treatment.
However, the problem with insulin treatment is that, for the type 1, they have very fragile blood glucose control capabilities, and their beta cell function are gone. In this case, the blood glucose fluctuation with insulin therapy is a problem. That has a relationship with the high risk of developing the complications in the micro and the macrovascular system. With dorzagliatin, we can be able to control the time in range, and then we are working with the Dr. Michael Rickels, the professor at the University of Pennsylvania and then CHOP, and going to start on the established type 1 diabetes patients in U.S. Then we plan to file IND this year. We already had a pre-IND meeting with U.S. FDA.
Through this study, we would like to reduce the effect of hypoglycemia, the low blood glucose effect, and also see the opportunity to slow down the progression of the type 1 diabetes in the stage 3 diabetes patients. This is a new area where in the type 1 diabetes patients, if we can preserve their beta cell function at early stage of the disease, which we call the stage 3, and prevent them to going to stage 4, right, that's going to provide a huge benefit to those patients, right, which suffers later treatment. This work is also being initiated with my colleagues in the United States.
We are working with agencies and then developing protocols and then with the physicians to come up a strategy evaluating the potential of dorzagliatin to delay or preventing the disease progression into stage 4. That's the work that we think is important that to help diabetes patients, not only in the type 2 diabetes, which we have shown and demonstrated in the Chinese population, but now we want people to continue to benefit in the type 1 diabetes population. Next slide showing that, as we're moving along, and then we are very much get engaged in the business development, we like to partner with some very capable hands in U.S. and in Europe, and also Japan, Southeast Asian market, and the Belt and Road market, right, to really realize the value of this innovation.
We would like to collaborate to innovate healthcare around the world. In partner with Bayer in China and achieve commercial excellence in diabetes care, we're providing a very good drug. Bayer now, with their experience in the Chinese diabetes market, and also they are introducing a really new novel, continued blood glucose monitoring devices also in China. That you can see the combination and the synergy in the future to really write the standard of the care in the diabetes. I think in partner with the local leaders in China, we have good drug development clinical opportunities, really want to think about how are we going to drive the remission to the next level, right?
This is opportunity not just in China, but in the Southeast Asian region, because this shares very close genetic and environmental similarities, as well as the food structure and the dietary structures, right? That's the opportunity we want to work with partners to achieve. The third area is saxagliptin. We are working very closely and hard to work on the U.S. and the EU partners. For the FDC, once a day tablets for the second-generation dorzagliatin so that we can benefit the patients in type 1 and type 2 diabetes, right? These are the opportunities that we are working on, looking for partners, and some are in the discussion, others are in the relatively remote discussion. What we want to do is make this innovation accessible to the world, which is the mission of Hua Medicine.
We innovate healthcare in China for the world. Thanks for listening, and then I will pass the financial section to Mr. George Lin, our CFO, to tell you a bit about our financial situation. Thank you.
Great. Thanks, Dr. Chen. Thanks everyone for attending. I hope everyone's staying safe, either in China or in Hong Kong. I'll keep this very short so that we have at least, let's say 10 minutes for Q&A, as we have to transition over to our China-based China version of this presentation at nine. But as you can see here, our cash balance remained very strong at CNY 675 million of cash at year-end 12/31, which is slightly over $100 million. Our cash burn was very well controlled as usual at CNY 356 million, with most of it spent on operating activities, which is consistent with our past practices.
You'll see this increase of investing activities, which is due to this initiation of building our manufacturing plant in Lingang that Dr. Chen has talked about it. The operating activities, as you can see here, CNY 273 million, and investing activities was about CNY 68 million, which really involved paying for the land in the Lingang factory. You can see on the next slide, loss before tax was CNY 325 million for the year 2021, as compared to a loss of CNY 393 million for the year 2020. Because of our controlled cash burn, our R&D expenses, as you would expect, declined in 2021 from expenses of CNY 2,221 million in 2020 to 2021 expenses of CNY 186 million.
The decline in clinical trials expenses was offset by increases in expenses related to CMC as we accelerated our preparations for increased commercial supply in anticipation of NDA approval and commercial launch. So that's really the bulk of these adjustments you see in the R&D expenses. Administrative expenses also declined, as you can see here in 2021 when compared to 2020, from CNY 140 million to CNY 134 million. For admin expenses, we maintained those activities required to continue growing our company while continuing controlling or eliminating expenses that were not needed. As forecast for 2020, we expect our cash burn to be, continue to be very controlled.
If you'll recall, the selling and marketing and promotion expenses are borne by Bayer, including any sort of phase IV trials that will be ongoing. They will bear those costs. We don't expect our cash burn to exceed CNY 300 million for 2020. That does not include, think about it, the cash burn does not include any milestone payments that we would expect to receive, from that Bayer of up to CNY 400 million, upon approval of dorzagliatin NDA and also launch of commercialization sales. That kind of gives you the forecast and the financial situation. I will pause there and, let ICA see if there's any questions from those that are attending.
The prepared remarks have ended. We will now move on to Q&A. You can type in your questions in the chat box or the Q&A channel, or verbally bring up your questions with the hand raise function on Zoom. Please indicate your name and organization before questions, and the company's management will provide input on them. You can now raise your questions. We have one question regarding can GLP-1 or SGLT2 induce diabetes remission? If not, why?
Thanks. That's a really very interesting question. I think in the data that are supporting the diabetes remission are threefold. One is the surgical treatment for the gastric sleeve study. In that study, they were showing that improvement of the GLP-1 secretion and then improves the beta cell function. So the connection of the GLP-1, which improved the glucose sensitivity, has been illustrated also in the RISE study here in this left-hand bar in the middle bottom, right? You can see that out of the lines that staggered together, that's the one line lifted up. That's the GLP-1 arm, and showing that acute response to glucose, the C-peptide change, right? But that change was not sustained after the drug gets stopped at 15 months, right?
That's where we see that the effect on remission, at least in the RISE study, was not achieved. Same thing on the central panel of this figure, that blood glucose level. During the treatment with the GLP-1 arm seems that has a very good reduction of the blood glucose within the first 12 months. Then after you stop the drug, they all went back in the 15 months. In that publication, the RISE Consortium suggesting that maybe the treatment of 12 months, one year, is not long enough for the GLP-1 to induce the remission. There are efforts being made continuously to address this GLP-1 induced remission, I believe. The third aspect on the diabetes remission is related to the insulin.
The intensive insulin care in China has brought about the remission for the drug-naïve, but very severe insulin-requiring diabetes. That was the medical practice in China, and it is very important. Now, the underlying theory on this is that by using intensive insulin care, you can let the beta cells rest and then recover so that its glucose-stimulated insulin secretion function can be restored. The bottom line is the remission, while also with the DIRECT, you can see how it's all related to the glucose-stimulated insulin functions. That function restore is required, or what I call essential for the diabetes remission. Now, we have not seen a report on the SGLT2, because SGLT2 does not directly work on the central cause of insulin secretion. It's off the pancreatic pathway.
However, it might provide additional benefits with reduction of blood glucose, reduction of fat, reduction of blood pressure. This will offer a environment to reduce glucose toxicity or lipid toxicity that is harmful for the diabetes remission, right? There's opportunities, I think, as dorzagliatin add SGLT2, right? One work on the essential factor, the other work on the sufficient factor. Two combination will give the best outcome. Those type of studies, we have initial study in the U.S. showing the benefit on the glucose lowering and also in the early phase insulin secretion improvement in the combination of dorzagliatin with empagliflozin SGLT2. We believe for the drug naive patients, we can very likely to see this remission and a very good remission, very solid data.
For the other patients who's already on drug and then the diabetes, you know, history is about, you know, less than five year-ish. The combination of dorzagliatin with sitagliptin or empagliflozin be able to collectively manage in the remission process. Thank you.
I think, Dr. Chen, just one thing to add, you know, this is a key question, right? Can any of the other drugs do it? I think Dr. Chen answered it very, very clearly. I think from a patient perspective and just from an investor perspective, there's a lot of science that was just given. If you just think about it, you know, insulin about 100 years, right? Then now there's eight other classes, and they all have very wonderful benefits. Any day, any one of those patients can actually try the DREAM study by themselves. They can just stop medication and see if their blood glucose go up.
Here you see it in our DREAM study, the patients did it in a controlled observation setting by investigator-initiated study after our SEED study, and they did it for 52 weeks and still well controlled. I think from that perspective, the remission is a super important positioning aspect of dorzagliatin, right? Because Dr. Chen, as you know, has been talking about beta cell and underlying cause.
If you can do that, you should be able to show remission. That's why for S, you know, SGLT2, right, Dr. Chen, we saw some more good data that came out from Eli Lilly on kidney. Well, that makes sense because the drug is designed for kidney, right? So from this perspective, combination would be wonderful. Remember, our drug was designed for underlying cause of type 2 diabetes. We expected to see remission, and we did see it in DREAM. I think we have time for one more question, ICA.
Yes. We received a question from Mr. Matthew Chen. Mr. Chen, you may raise your question now.
Hi. Good morning, Dr. Li Chen and George Lin. I was hoping maybe you could briefly touch on the broad trial design in the U.S. for type 1 diabetes and maybe how that's going to look different to the type 2 that we're so used to hearing from you. You know, maybe kind of the size, other risks like cardiovascular, you know, endpoint. Thank you.
Okay. George, you can flip over to the slides where we have that type 1. For the type one study, right, the most important thing is to understand why we need a, you know, another drug for type 1, right? The type 1 diabetes, the patients have suffered from the autoimmunity, their own antibody target on their own beta cells, and then lead to the dysfunction of beta cells. So type 1 diabetes has a character of antibody against the beta cells. So those are the character to see whether they are type one or type two at an early stage. Over the years, the type 1 diabetes patients were discovered when they were young. They usually, you know, discover that age of 10 to 18.
Those subjects, once they are diagnosed, they already had a very poor blood glucose control, so they were on insulin right away, right? That's the current medical care. There are complaints about the insulin price and so on. That's why they require healthcare reform on the type 1 diabetes treatment. Now, in our case, this is actually a study come up by Dr. Michael Rickels when I visit University of Pennsylvania three years ago. Michael say, "Hey," say, "Li, you know, we have been working on type 1 diabetes, and then we know that the beta cell is in bad shape, but it's not completely done.
What your data is showing is that you can rescue the beta cell, right, from the dormancy and then to come back. That's the study we shown, you know, published in the diabetes research. He said, "That's my uniqueness of rescue the beta cell function in the type one." That's not the only fact he's interested in. He's also interested that our drug also regulates alpha cell and the GLP-1 function, right? The L-cell function. Now with the alpha cell functions really control, right, the hypoglycemia. When the blood glucose is low, the alpha cell senses it and then secretes the glucagon and then act on the liver and then increase the blood glucose. This is improve the fragility of blood glucose fluctuation in type one, because in type one patients, their hepatic liver glycogen storage is really done.
Now, if we use glucokinase activation and then lower blood glucose, you know, storage in the liver goes up, and then that'll reduce the hypoglycemia. That's the idea. Now, our design is two phase design. The first phase is basically take a small group, 2-center, in University of Pennsylvania and the University of Florida and two research institutions to conduct one big study to do a dose ranging for the type 1. Now, we all know we did dose ranging for type 2 in Chinese patients. For the type 1, we need to do a dose ranging. That's going to be a quick, you know, 1-week study. After that, we'll conduct a proof of concept phase II trial, maybe even consider depending on the phase Ib data, whether we're moving to a II-III trial.
Now, during the whole study design, all the subjects will have the continuous glucose monitoring device, and are using that to monitor their blood glucose fluctuation and also importantly to see how our drug be able to reduce the hypoglycemia. That's where to improve the real unmet medical needs for the type 1 diabetes care, right? Because of this you know, artificial pancreas and insulin pump coupling with the CGM, the continuous glucose monitoring, that the closed loop design now you can lower the blood glucose pretty well. The challenge is the hypoglycemia, that the one suffers the lower blood glucose control because lack of glycogen storage in the liver. That's the concept, and that's how we're gonna do that. We'll do the phase I, and then we're gonna initiate this year and then complete next year.
We start phase II, really gearing to the, you know, phase II/III study to show this confirmed efficacy.
Thank you.
I think we're running out of time today for the call, but thank you again for your participation. If you have further questions in the future, please contact Hua Medicine's IR team or ICA. This will conclude our call today. Participants may disconnect now. Thank you.
Thank you.
Thanks, everyone. Stay safe. Thanks.