Good day, everyone. Thank you for attending Hua Medicine's 2021 Interim Results Conference Call hosted by Institutional Capital Advisory, the company's investor relations advisor. Today's call is being recorded. On the call today are Dr. Li Chen, Founder, Chief Executive Officer, Chief Scientific Officer, and Executive Director, and Mr. George Lin, Chief Financial Officer and Executive Director. Dr. Li Chen will start the call with an overview of the company's highlights, including clinical trials and recognitions, followed by a pipeline update. Mr. George Lin will give his thoughts on the numbers and the updated guidance before we open up the call for Q&A. Management will be available to answer your questions during the Q&A session that follows. During the presentation, we will be able to submit your questions in written format in Zoom's chat box or Q&A channel.
Alternatively, you could virtually raise your hand on Zoom for an opportunity to speak with the management team during the Q&A session. For your information, 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.
Thank you. Good afternoon, good morning, and good very early morning. Thank you very much for participating Hua Medicine's interim result report. Hua Medicine is a clinical-stage company working on the innovation solutions for the diabetes and the neurodegeneration diseases. This is the area we set forth to work on because we are facing an aging world and much needed cares in the diabetes neurodegeneration area is require innovations and then come up with new standard and a new medicine. In the next slide, I give you the overview of recent progress on our endeavor to discover the world first in class glucokinase activator for diabetes. This is the dorzagliatin, and its NDA has been filed to the China regulatories, and then for the indication of monotherapy for drug-naive type two diabetes patients and add-on to metformin for the metformin failed type two diabetes patients.
This is a very important milestone, not only for Hua Medicine, but also for the medical care community, that in the diabetes care, after the approval of this drug by the regulatory agency in China, it has become the first in class new diabetes drug. With five very important characteristics that are going to change the healthcare in the diabetes. First of all, this drug have a very novel concept by treating diabetes for the underlying cause of the disease through rescuing the early-phase insulin secretion. This is a very important fact that the type two diabetes is initiated by loss of the phase I insulin secretion functions. Developing to the disease as we prolong with the drug indication. The second area will be the new mechanism of action using the allosteric activation process to regulate the glucokinase enzyme.
That is very important to provide the sustained efficacy and the safety profile, and then making dorzagliatin as the cornerstone therapy for diabetes care. Of course, it is a novel chemical entity and also with a new formulation. Most importantly, it's bringing the novel benefit in improving the beta cell function and the reduction of insulin resistance, and which is very important for the sustained glycemic control and a remission in the diabetes. Those five characters differentiated with the new drugs people really talking to, especially for the me-too class, where they only have the novel chemical entity. However, the novel concept, novel mechanism of action, novel formulation, and additional benefit to the clinic use will be very important for this first-in-class novel anti-diabetics.
After the submission of our NDA to the NMPA in China, the regulatory agencies have the subsidiary divisions in CDE, CFDI, CPC, and then CFDCs are all engaged in full-blown inspections and a reviewing process. Hopefully that will go through this process and then get a drug approved in the near future. In respect to preparation for the approval of NDA and also the launch of this new drug, our manufacturing capability, currently run by CRO and CDMOs, has fully validated and is ready for the commercial production. Adding on this, in anticipation in the future market growth and product needs, we have established a new manufacturing company at the Lingang, Shanghai area, and to run this operations in 2025 timeframe and provide drug supplies in China and the rest of the world.
We have also established the commercial team, which will engage in our product distribution management and in market entry. In China, as you know, it's very important to have an efficient drug distribution network that will be able to send our drug to the different regions and provinces and cities. This work has been established with our internal team in partner with the major distribution channel companies. We are also working on the market entry, dealing with the drug price, and then the NRDL entries, together with our payers, medical, and the marketing team engaging on the product launch readiness.
As we're moving along, you can see in the next slide, Hua Medicine is also building up our product pipeline and R&D focus with dorzagliatin as a cornerstone therapy, and then adding on the existing anti-diabetic medicines to create a portfolio of the drugs that with different indications in the type two diabetes care treatment, which is a part of the agreement with our Bayer colleagues, that upon we achieve the approval for the new indications, it's a new milestone payment that will be received by Hua Medicine, and then Bayer will be also responsible for commercialize and then promote those products into China market. On top of the anti-diabetic medicines, using dorzagliatin and other combinations, and then we're also expanding our capability in the areas of neurodegeneration, metabolic diseases using dorzagliatin platform, and additional project, mGlu5 and fructokinase inhibitors.
We are very pleased to let you know that following the phase III study, the SEED and the subject who engaged in the DREAM study has come to the end. The top-line data will be presented by our leading investigators in the sixth China BioMed Innovation and Investment Conference to be held in September 25-27 in Suzhou, China. This is very important milestone to demonstrate that after dorzagliatin treatment, our subject can sustain, maintain their blood glucose level without further drug treatment. This reach to a very important control aspect and also be leading the change of the standard of diabetes care. We are looking forward to see you in Suzhou at that time. Now, with moving forward on the diabetes and medical care, and we have discovered the connections about the diabetes glucose homeostasis in connection with glutamate homeostasis.
mGlu5 as the glutamate regulator is actually contributing to the neurodegeneration diseases, not only as in the PD-LID we're having studied, but also recently discovered in the Alzheimer's diseases. In addition to this, we also have discovered that GLP-1 has a natural connection from the pancreatic and the intestinal function to the central nervous system that regulates the neurodegeneration process. We call the neuroendocrine regulation. The next slide shows that in the clinical studies that we have demonstrated that dorzagliatin is involved in the GLP-1 regulation in the type two diabetes patients. We're actually showing that the type two diabetes patients upon receiving dorzagliatin have a significant increase of the total GLP-1, which is very important in the signaling pathway to managing not only the peripheral network, but also important in the central nervous system management.
On top of this, we also see the synergistic effect of the DPP-4 inhibitors with dorzagliatin, which significantly increase the active GLP-1. The active GLP-1 is very important in the regulation of beta cell function and insulin secretions. This finding certainly is very important to support our future expansion in the disease indication and the diabetes care and neurodegeneration cares. In next slide, we're going to briefly show you why we take diabetes as a major area that Hua Medicine put us the last 10 years of work on. Actually, if you look at what happening in the diabetes field, even till today. The current treatment paradigm for type two diabetes is not satisfactory because it cannot contain the disease progression, it cannot prevent diabetes complication. We have to focus on the diabetes complication because this costs much more medical care expenditures, because we cannot control the blood glucose.
In order to better control blood glucose, ADA and CSCA are the two major diabetes academic and society, and community provide guidelines to regulate the blood glucose fluctuation using time in range. Also asking the physicians to use SGLT2 or GLP-1 receptor agonist to control the diabetes complications. With this, we can see in the next slide the impact of the diabetes in the global medical expenditures, and also the cost in China related to the diabetes and diabetes complication. All these complications is clearly related to the time in range for the blood glucose post-meal and under the fasting below the range. The time in range lost in the diabetes is the very important factor to lead to the diabetes complication. The dorzagliatin is here to correct that.
That is, dorzagliatin, through regulating the glucose homeostasis and then put the blood glucose fluctuation into the healthy range so that we can prevent the diabetes complication and then contributing to the global market. Next slide was showing why we think glucokinase activator can address the underlying cause of the diseases and become the cornerstone therapy for treating diabetes. Diabetes have four major factors that contributing to the disease onset. Genetically, environmental inflammation as an epigenetic factor, and also insulin resistance. At the end of the day, they all contribute to the final common denominator, which is loss the beta cell secretory function or beta cell mass. That is, in the clinic, we lost the first phase insulin secretion. With existing therapy, metformin or GLP1 plus metformin or insulin plus metformin cannot rescue this defect.
In this process of the beta cell secretory dysfunction, GK played a major role in this whole process. That is, if we do not fix and repair glucokinase as the glucose sensor function, we'll not be able to address the underlying cause of the type two diabetes, which will lead to the complications and unsustained treatment. Next slide basically showing that over the years, after 17 clinical studies and many pre-clinical studies, we have demonstrated dorzagliatin as a dual-acting glucokinase allosteric activator, be able to remodel the glucose homeostasis. It improves the beta cell secretory function and it immediately acting upon the pancreatic islet function.
On the right side, you can see the most recent study from the godfather of glucokinase, Franz Matschinsky, showing in a study using the islet from type two diabetes patient, that dorzagliatin dose-dependently improved the insulin-secreting function in the type two diabetes patients. This is a further evidence in supporting that glucokinase activator, dorzagliatin, acted on glucose sensor GK in the pancreas and also driving the insulin secretion to the next level, where it will help to repair the glucose sensing function for the type two diabetes patients.
Next slide, basically showing and updating you what we have discussed and assured at ADA on the most recent work that dorzagliatin in the SYSTOLY study will be able to effectively not only control the blood glucose, A1c, and the two hour postprandial glucose, but also controls very well in the beta cell function improvement and the reduction of insulin resistance. Next slide, showing in the DAWN trial where add-on metformin to treat metformin failed patients that blood glucose control has done very well. At the same time, with the improvement of the beta cell function and the reduction of insulin resistance, the root cause of type two diabetes. Next slide. Basically showing that in the combination study of dorzagliatin with sitagliptin and empagliflozin, we're showing that in both combinations, dorzagliatin adding to sitagliptin or empagliflozin improve the beta cell functions over either single drugs.
Next slide showing the benefit of improving the beta cell function lead to the improvement of the glucose reduction. You can see that in the combinations, the glucose reduction is also not only in the total glucose of the AUC represented, and also the C-max of blood glucose, which is very important to contribute to what we call the timing and range in a study. With this, you can see that dorzagliatin as a important therapy target on the underlying cause of the type two diabetes and be able to informally contribute to modifying the disease conditions.
Therefore, in the next slide, we're basically showing that with this cornerstone therapy, we'll be able, working with metformin, SGLT2, DPP-4, GLP-1, or insulin, to treat type two diabetes with different patient populations and indications, also bring us into the new territory of the NASH and the type one diabetes, as we indicated that the discovery work and clinical design work has been initiated. The areas that we've been working on will offer a much important indication in the disease treatment communities. In the next slide, you can see that we have continuing a lot of work to do. Our partner, Bayer, we have a anniversary for announce our collaborations, we are marching toward the next milestone that the NDA approval and the product launch.
We have joint efforts for many medical community educations and then KOL discussions to how to position this drug into China market and then best help the patients in China. We are work optimizing our manufacturing capabilities, working with WuXi STA, Tigermed, Desano, and so to improve our capabilities and the cost of goods for the dorzagliatin and then bring a better benefit to the company and investors. We are also working on the new drug discovery, as I mentioned that mGlu5, NAM, and the SAM are the very important regulators within the neurodegeneration diseases in PD-LID and the potential AD. The preclinical work and the basic science discoveries has been conducted within Hua Medicine and our academic collaborators. Hopefully in the near future, I can report you a breakthrough paradigm for managing the neurodegeneration diseases through glutamate homeostasis.
Fructokinase is a very important enzyme in the metabolic diseases and the dyslipidemia. Hua Medicine has a long time investigations in the fructokinase area, and then now very engaging the fructokinase inhibitor discovery in collaboration with partners and so on. We'll hope to bring you the benefit in this area. Now, we are very well-positioned financially. We have a very strong balance sheet with CNY 800 million in cash. That's CNY 800 million in cash. Also additional milestone payment will be received upon the NDA approval and the product launch in 2022. With this, I will invite my dear colleague and company CFO, George Lin, to give you a update on the financial review. George?
Great. Thanks, Dr. Chen. As is customary, this section will be very short. I think you guys have heard this through before. Very quickly, let me take you through our cash balance and our spend for this last reporting period. To be very specific, we had cash balance RMB 846.9 million of cash at the end of June versus just slightly over RMB 1 billion last period, 06/30/2020. The total cash decreased RMB 185 million of which most of the amount was in operating activities. As some of you know, we did move into a new headquarters and we'll explain some of the expenses, but the remaining expenses, fairly nominal, around RMB 10 million was for that. You can see the financing activities, RMB 5.8 million, and exchange rates as the RMB strengthened also caused a net exchange rate change of about RMB 5 million. Next slide.
For the loss before tax, CNY 165.3 million in the first half of 2021 versus CNY 173.5 million in the same period last year. Our research and development expenses were approximately CNY 98 million in the first half of 2021 versus CNY 112.3 million. CNY 98 million of the CNY 165 million is from R&D. Most of the expenses, as you can probably surmise, the decrease was due to the completion of the two phase III trials in 2020. That amounted to a total of about CNY 28 million. An increase in CNY 2.8 million for CMC work related principally to the chemical and process search for our fructokinase inhibitor. I can tell you that this is a fraction of the cost that Pfizer has actually spent on this program, and we are moving very quickly on finding a lead candidate for this. That's very exciting.
An increase of CNY 3 million for dorzagliatin on clinical studies, as you all know, principally related to the NDA filing and also FDC efficacy studies in combination, along with animal studies for cognitive disorder, as Dr. Chen was talking about neurodegenerative. Next slide. The R&D expenses an increase of CNY 10.2 million for others. This was primarily attributable to the allocation of rental fee moving out and then moving into our new headquarters as we had discussed. You can see the comparison here from the previous year, which is CNY 112 million. We actually decreased that in this period. Next slide. Administrative expenses, again, pretty much the same this year compared to last year. CNY 63.5 million in the first half of 2021 versus CNY 64.2 million in the first half of 2020.
A decrease in labor costs attributable to share-based payments of about CNY 4 million under the accelerated amortization method and a decrease of CNY 4.7 million as we got very favorable rates going forward with our new headquarters, even though it's much larger space and brand new. We're hoping that this also extends to our further link gang showing the Shanghai government support of our company. Adjusted for the increase of CNY 2.6 million in D&A mainly due to again, new headquarters, more meetings compared to last year, which was lockdown. This year we're definitely moving about and especially with the commercialization team and also additional work related to DREAM, et cetera. A lot more activity has increased. That's the financial situation. I'll summarize it up with the next slide. With a summary. We have global rights to dorzagliatin.
That includes the composition of matter, process, formulation, and then multiple products in an FDC with other OADs. Those FDC patents and formulation go all the way out, some of them to 2039. We have a commercialization partner we consider to be the best, and for the last 20 years was number one in China with Bayer. We've met our primary endpoints and submitted our NDA, which was accepted in April 2021. As a reminder to people, the technical rule is 200 working days. We're presuming about one year from a timeline perspective as kind of a target. As people know, the NMPA can do what they do, but this is what we've been giving guidance. A first-in-class drug to significantly and sustainably reduce HbA1c, which targets the underlying cause. That's the first novel concept.
I think what's really exciting, as Dr. Chen mentioned, for the first time ever in type two diabetes, we'll get to see some controlled, sustained rate of glucose control without our drug after treatment of our drug, which is going to be a new indicator and will cause people to think, how exactly are we leaving this very lengthy lasting effect on patients? That's very exciting for us. The combination with DPP-4 and SGLT2 is very exciting, especially with the new data on SGLT2. That's going to definitely have a long-term space, especially as it relates to heart. DPP-4, our excitement with the GLP-1 secretion with our drug combined with DPP-4 could be a very formidable potential oral GLP-1 competitor. That's exciting. Then our drug is suitable for type two patients with chronic kidney disease across all stages. Very large market.
In anticipation of our commercialization, as Dr. Chen mentioned, we've established a new drug manufacturing company to support really the commercial supply that we expect to receive once the drug gets rolling, starting within the third year. Third to fourth year, we could expect up to 1 billion pills of requirements is kind of our current modeling. Who knows whether that will be, but that's our current anticipation, and we must be prepared for it. Then, of course, very strong balance sheet of RMB 846.9 million cash as of June 30, 2021. With that concludes our presentation. We're open for Q&A.
Okay. This concludes our prepared remarks. We will open the call up for Q&A. Dear investors and analysts, feel free to submit your questions in written format in Zoom's chat box or Q&A channel. Alternatively, you could virtually raise your hand on Zoom for an opportunity to speak with the management team during this Q&A session. Now we will open the floor up for questions. First, we have an investor, Luming Gao. His first question is latest progress in HMM0303 comparison against sulfonylurea and DPP-4 inhibitor and HMM0304 comparison against α-glucosidase inhibitor.
Very interesting questions. I think one of the questions that you're talking about in the comparison against sulfonylurea and the DPP-4 inhibitors, those are the previous discussions in prior the Bayer collaboration. After the Bayer collaboration, our pipeline has been updated, geared toward the common interest in our future pipeline and milestone development. We're currently focusing on developing our combination with DPP-4 inhibitors and also not developing a direct comparison with the alpha-glucosidase. The decision from the alpha-glucosidase, the acarbose is a major product from Bayer, it has been a big sales in China over the last 10 years before they entered into the new procurement regime. The Bayer team consider dorzagliatin as a super acarbose.
They would like to replace the acarbose in the market and then really considering how acarbose and dorzagliatin will eventually working together is a separate approach where we're considering in the longer term dorzagliatin while moving to the disease prevention to prevent the pre-diabetics IGT patients developing into the diabetes. That's where I think the acarbose α-glucosidase inhibitor will be beneficial in working with dorzagliatin. Thank you. The second progress in the global license out, there is several discussions ongoing with companies around global license out, and George has been working very hard on this. George, you have comments on this?
No, nothing material to report except for what Dr. Chen said is that we continue to have conversations with various parties, including Belt and Road countries. I think just to give people a sense of kind of some of the navigation routes is having done our phase III registrational trials in China. China has never had a first-in-class drug. It's not a reference country for most of these other countries. As people saw with the COVID and vaccine, we're seeing new precedent. From that perspective, we are getting some traction in these other countries. We will continue having these discussions. We expect with more data and with more time as we see with things like DREAM, there will be more creative ways to potentially get accelerator approval in some of these other more mature markets that have very high impediments.
That's pretty much all we can disclose right now.
Okay, great. We have Matthew. Hi, Matthew. I see your question here. This is a question, wants to know how quick the manufacturing capability can scale up, and then what's the cost curve might look like. This is the manufacturing, as you all know, we have been working with WuXi AppTec, WuXi STA, and Desano in the drug development stage. Based on the MAH process and the current China Drug Administration Law, our drug launch is based on our CDMO partner, WuXi, Desano. Their capability at this moment is getting up to 800 million pills. I got to get this thing straight. 800 million pills, that's the current capacity, which was projected at the t hird year in the commercialization. In fourth year, then we'll get into 1 billion pills, and that's where our new manufacturing sites will enter into.
This will be in the investment of the land and then in the equipment at this moment. That will be involved during the investment in the next couple of years for establishment of this new facility.
Okay. Thank you, Dr. Chen. We have another question coming from investor Lu Bing Gao. His question is, any progress in dorzagliatin global license out?
I think we have answered that already.
Yeah, I think Li Zhen Chu has a question, right? A hand raised.
Yes. From Goldman.
Oh, it's another one. Okay. Hand raised.
Hi, can you hear me?
Yeah.
Yeah. Thank you for taking my question. I have a few. Maybe just first follow on the manufacturing side, how do we plan to fund the construction, what's the CapEx for this one?
The detail of the CapEx plan was in the development. I think overall that's a CNY 1.9 billion investment total over the next five years.
You say RMB 1.9 billion in total?
RMB. Right.
Of which a substantial amount would be subsidized through loans by the government as well, right, Dr. Chen?
Yes.
Up to 50%-60%.
How do we plan to fund the CNY 1.9 billion investment for the manufacturing site?
The finance, as George mentioned, that one is that from the government subsidized loan, bank loans, and then the banks, and then some investment from the Hua Medicine Global.
Also Bayer milestone specifically linked to manufacturing as we validate the manufacturing as well.
The milestone payment from Bayer.
As it relates specifically to manufacturing, yes.
How much roughly is that?
We haven't disclosed that, but it won't be an issue once we are building that. As Dr. Chen said, this is over a five year period time, which is very actually back-end loaded. In terms of the land, it's not a significant amount. The actual factory being built, a lot of that will be funded by the government. By then we would have good visibility as to the actual need.
Okay. Maybe just putting another angle, we have about CNY 800 million cash, right? We have a CapEx of CNY 1.9 billion for the manufacturing side. I just want to get a little color, how do we plan to use our cash on hand? If that's the case, do we plan to maybe raise additional money either through debt or through equity? Just we want to have a little more color on this.
Yeah, I guess one of your key assumptions is this drug won't be approved and we won't have revenue and we won't get any milestones. We need to raise money through equity. That's not our operating basis, right? If you look at our Bayer contract a year ago, we have over CNY 3 billion of milestones still to be collected, of which some are off of clinical development, but others are based off of sales milestones. We also get revenue as well. Some of this will be equity finance potentially. As Dr. Chen mentioned, the first three to four years of supply comes from our CMOs, which is WuXi, STA, and Desano. Right? We've got Zhuozhou as a backup, which we've indicated in the press release.
Where the factory really comes into play is actually to, I think Matthew's question, is that it would significantly drop our COGS, and especially by that time, ideally, the drug supply would be needed for ex-China as well, which then would come from this factory. It is not like today we need to come up with CNY 1.9 or tomorrow we need to come up with CNY 1.9. I think that's a big number that Dr. Chen has in his budget, but we actually would not need a lot of that payment until probably the fourth or fifth year. A lot of it is funded initially by the government. They have our plans as well, which is why they would either agree to let us be in Lingang, which is the same area as Tesla, rather than anybody else.
Got it. What do you think the CapEx?
1.9 is the total investment. I think the CapEx is around half of that. 70% of that will be in the bank loans and government subsidy. That's where the plans are going. Obviously, what George mentioned is that additional milestone bonuses, not bonus, payment from Bayer related to the drug approval, product launch, and also our capacity in the manufacturing. All those are part of the incomes that in line with the development of this manufacturing capability. You may ask, then why do we need to have this own manufacturing capability? This is really the pure factory, right? For the solid dosage, not only for the drug item, but also for the fixed dose combinations that come in line in the time of 2025, 2026.
Additional research and development and also process development going to be engaged in the future manufacturing needs. Overall, I think that's one part. The other part is the security for the drug supply chain. We, as the primary drug providers, and once we get launched, we will need multiple sites to manage the drug supply. Desano is one of them, and then we need yearly internal capability to have the supply around 50% of the overall drug supply. At the same time, really be able to, using our internal practice, drive down the overall cost of this cost of goods. That will bring us additional benefit, and then the profitability will be significantly improved when this product manufacturing factory gets online.
Understood. Yeah, that was helpful. Maybe just follow up on the latest update on the regulatory side. What's the latest status now, and when do we expect potential approval?
The latest update is that the regulatory agency, as I listed, is all very busy doing their work. First of all, we have getting the CDE's request with different type of documents for their internal review. Also we get CFDI, which is the drug site, manufacturing site inspection, clinical site inspection, central labs, and also the research and development facility inspections ongoing. This is also part of this drug approval process. On top of this, there are the drug name validation approval from CPC, the methodologies for validating our quality control and analytical methods and so on is also under the evaluation of the National Institutes for Food and Drug Control.
On our yard of the activities is current ongoing, with the China new regulations effective from last July, is that for our drug, there's an expected giving feedback, the regulatory feedback approval in 200 working days, roughly a calendar year if you have time. The caveat is whether the COVID will pose a pressure for the regulatory agencies conducting the work in the five areas. I think the site inspection certainly is something that may be impacted, so far, everything's moving smoothly. We continue expecting that the drug getting approval sometime next year, we'll update with you guys when we have more definitive answers on the dates.
Great. What's the commercial preparation right now in collaboration with Bayer?
Commercial collaboration is very important as Hua Medicine transitions from an R&D biotech into a biopharma, as everybody talks about. Internally, we need to have our commercial team established to manage the national distributor companies who move our drug from our pill factory to each province or city. That's one thing. The team is in place, partnership with the four major national distributors is ongoing discussions. The second area is working with the experts and then the KOLs, and then determining our price, and then NRDL strategies, and then those sort of things with the team now within Hua Medicine, and then working with Bayer and then developing that to prepare for launch. The third thing obviously used to be part of Hua Medicine's work, and then now is the major efforts from Bayer, is the marketing and the medical education.
Where Bayer now joins force with Hua Medicine on the medical education conferences, meetings with KOLs, and discussing the market entry and then best practice treatment with dorzagliatin in the clinic. Those are the three areas that are ongoing. However, with Bayer's major efforts is in the marketing, is down the medical education, and preparing the sales force, and getting engaged for the commercialization.
Thank you. Maybe just last one from me. What's our data presentation or publication plan for our two phase III study, the 01 and 02?
I can tell you that we have submitted our manuscript to the leading journals, now received the reviewers' comments, then we are doing the revision. This is one very important progress, obviously. Then there are additional publications on the pipeline related to the AI-driven data mining, additional learnings from the subgroup analysis, and as well as the additional clinical trials, where we have this metformin add-on, we have this sitagliptin add-on, we have empagliflozin add-on. These are all add-on trials that have learned very important information on the pharmacokinetic and pharmacodynamic relationship, which help us to better position dorzagliatin to the patients with more precision then with more personalized approach. Yeah, that's a handful of papers now in either drafting or in reviewing or in the preparation.
We're going to see the detailed data from the two phase III first in the publication rather than present at a medical conference. Is that the plan?
Yeah.
Okay
well, we're going to have more data in the publications, and this is actually, as you know, in those leading journals, and then you can't just publish the things you already disclosed, right? There are things that we'll share with you. Where I think the point that I've gave you on dorzagliatin, the five characters as the first-in-class drug, the concept, the MOAs, the mechanism of actions, right? The benefits in the PK for the renal impair patients related to the structure, and then additional efforts in the formulations, and really be able to let the drug reach to the three target organ, where GK stay there, and then managing the glucose hemeostasis in a systematic work. All those aspects will gradually be released through the publication.
Thank you. That is all from me. Thank you.
Yeah, great. Thank you.
Thank you, Dr. Chen. We have a question from Vinci Ip. The question is, "Any updates on the plans of U.S. phase I trial to test fixed-dose combinations? Are we on track to find a global partner to co-develop dorzagliatin?
The global partner thing is ongoing, as George and I have discussed that we are working with the appropriate partners that, first of all, really have the capability to help and then develop dorzagliatin in the region, and then have the muscle to launch that. On the other questions is that as the type one diabetes, we have identified the key investigators and the KOL who we are working very closely to developing the protocols, we'll soon announce our IND filing in the Q4 in the U.S. That's the new indication. What we believe in working with all KOLs is that, because dorzagliatin work on the sensory function in the pancreas and in the intestinal, and also working on the liver, be able to improve the glycogen storage.
In this way, it will reduce the post-meal blood glucose and also reduce the hypoglycemia under the fasting conditions, especially for the type one diabetes. For the type one diabetes, the major need is not get the blood glucose down, it's to prevent the hypoglycemia. That means the blood glucose goes too low when you use insulin, and then the current insulin pump will not be able to help to respond quickly enough to maintain the blood glucose go below the standard. With the improvement of the pancreatic and also the liver function, dorzagliatin has the potential with the prevention of the hypoglycemia. You have seen this anti-hypoglycemia effect in the type two diabetes, and also the mechanism action has suggested that the improvement of the post-meal glucose reduction has clearly related to the glucose uptake and the storage in the liver.
That's important for the type one diabetes, and we hope that we'll be able to come up with a new paradigm for the treatment of type one diabetes in combination with dorzagliatin. At the same time, we'll have the opportunity to testing dorzagliatin in working on the type two diabetes in combination with insulin in China. That's two separate trials. In both trials, we'll work on the subject has a relatively poor pancreatic beta cell functions, but we would like to understand how dorzagliatin to improve the GK function in the pancreas and in the liver that able to restore the homeostatic control. This is a very important aspect. The timeline for the type one work will be file IND U.S. and then initiate a study early next year.
Thank you, Dr. Chen. Due to time constraint, we're going to take one last question from David Luo.
Hi, both. I have a really quick question. I think last time when we talked, you guys mentioned there was a investigator-initiated study regarding the study for clinical remission. I understand that we're actively looking for that subpopulation where we're able to see that specific benefit from dorzagliatin. I wanted to get an update in terms of when we'll be able to see data from that and what further steps we will take after we have the data.
Yes. We have received the top-line data from the investigators, because this is investigator-sponsored trial, the investigator is planned to give a talk at one of the biomedical conferences in the slide five, I believe. If we can go to the slide five, the information for the conferences. This is the conference run by Chinese Pharmaceutical Association. It is the 6th conference, in that conference, we have engineered a session we called Global First Release of the Clinical Data. The DREAM study, that's the study you just mentioned, will be the first around the presentation in that session. The investigator, Professor Jianhua Ma, will be representing the other investigators from four other hospitals, give a talk on that.
This is basically, as George also mentioned, for the first time as the oral agentsIs able to show that after a period of treatment, and then the patients who reach the glycemic control point, and then sustain that for a year without further medication. That's a very important conference that if you are interested, we can provide you the more detailed informations from IR network.
Yeah. Just to supplement that, if you go on their website, they've already indicated the conference dates. As Dr. Chen mentioned, dorzagliatin will be presented by our principal investigators. This is their trial. Our trial ended at 52, 53 weeks, with both SEED and DAWN. DREAM study is their observation without our drug, without any other drug for a fairly long period of time. They will finally be able to release that data after full validation.
Okay, thanks.
Okay. Thank you very much. In closing, on behalf of Hua Medicine's entire management.
Hello? I'm sorry.
team.
Go ahead.
Sorry, is there?
Yeah, I had a further question. Really quick, I'm sorry. In terms of how do we plan to utilize the investigator-sponsored data, going forward?
Please, the question again.
How do we plan to utilize the data from the DREAM study?
Okay. There's a threefold of significance on this. First of all, as we have been looking into the literature, any antidiabetics and so-called blood glucose-lowering drug, through the intensive blood glucose lowering control, and then be able to control the blood glucose A1c around six percent, which is in the safe, healthy range, healthy people range. We saw that, the blood glucose level rebound back to before the treatment. That's what we have learned. In one of the slides showing that using metformin or using metformin plus GLP-1 or insulin plus metformin, we cannot get this remission. That's very important for a new class of drug. When it fits the sensor, you're able to bring the benefit to control the disease progression. That's one thing.
Yeah. Dr. Chen, more specifically, right? What we talk about, we are the only drug that targets the underlying cause, the root cause. People ask for a biomarker. I can't think of a better biomarker than getting our drug and then stopping all drug treatment, and then seeing the lasting effect for, say, one year. Right? That will definitely change the paradigm of how patients and medical doctors are.
This is one part, right? From the clinical practice in the type two diabetes area, and then it's a very heterogenic disease in the spectrum of type two diabetes. You get Caucasian type, you get Eastern type, you get IGT-driven and impaired fasting, IFG-driven, and then GOS-driven, or you get obesity-driven, right? The complications offers you a very different picture on how to treat them. With the SEED, and then we see the signature of the subject who has performed well in the SEED study, which means in the drug-naive patients, they responded well in this 52-week treatment by dorzagliatin. Right? That's one information. This group, the subgroup of those, roughly about 60, 70 of those are followed up by the investigators. That means this group respond well and then continue respond well. Their disease get control.
They do not relapse. That's very important to help us. Validating part of our algorithm we're developing for subclassification of type two diabetes patients, and then looking for a targeted therapy. That's number two. Number three is, this is for the drug-naive patients. There's also metformin-treated, tolerated patients. There's also metformin plus other therapy-treated and tolerated patients. Right? Those are the patients who would probably require a different paradigm with metformin. Adding together with the existing therapy, looking for a sustainability, and then prevent the disease progression, and so that we can eventually prevent the type two diabetes complications. That 10 miserable diseases associated with organ damage that come from diabetes. That's the three areas, very important for us to decide what are the disease patients that dorzagliatin can effectively treat and also achieve the prevention disease development into later.
Obviously, this is also telling us that, for diabetes treatment, we will, and the likelihood through combination with dorzagliatin, with existing therapy, getting to the early stage, relatively intensified blood glucose control. Making that available to the patients and then helping them to control and sustain the disease without further medication. That will giving us a different standard of the diabetes care.
I would just supplement that. Probably, Dr. Chen, we should probably not speak any more about the principal investigators, what he's going to present, because we don't know.
Right.
Definitely try to attend this conference. As soon as this comes out, David, just mechanics-wise, as soon as it is published, as soon as he's presented it becomes in the public domain, we will definitely put out a press release. My understanding is the PIs are very excited about writing something for a medical journal, and that will follow as well.
Okay, great. Thank you very much.
Great.
That should be a very exciting milestone.
Yes.
Dr. Chen?
At the end of the day, it's basically showing that how important to fix the sensor. In the past, a lot of therapy can control the blood glucose very well. If you take the drug off, the disease relapse. Here we see the sign of retain the drug effect and without the drug. That's exciting.
Okay, great. Thank you, Dr. Chen. Thank you, George. In closing, on behalf of Hua Medicine's entire management team, we'd like to thank you again for your participation in today's call. If you have any further inquiries in the future, please feel free to contact Hua Medicine's IR team or ICA. Thank you. This concludes today's call, and you may now all disconnect.