[Edaily Reporter Kim Jinsoo ] HK InnoN’s new drug “K-Cap” for gastroesophageal reflux disease (GERD) has begun to gain significant market share in China and has entered a phase of generating royalty revenue. Unlike Takeda Pharmaceutical’s “TakeCap,” a market leader whose patent has expired, K-Cap remains under patent protection and has thus avoided the impact of China’s Voluntary Buying Program (VBP).

Furthermore, with reimbursement coverage for its three main indications and the development of an injectable formulation tailored to the Chinese market, K-Cap’s market share and royalty revenue in China are expected to grow rapidly.

According to the pharmaceutical and biotech industry on the 5th, as China’s anti-ulcer drug market grows rapidly, competitive potassium-based proton pump inhibitors (P-CABs) are also actively entering the market. Global market research firm IMS estimates that China’s anti-ulcer drug market was worth approximately 3 trillion won last year, making it the second-largest in the world after the United States.

Currently, the P-CAB drugs approved in China include: △Takeda Pharmaceutical’s Takecap (active ingredient: bonoprazan); △HK InnoN’s “K-Cap” (Chinese product name: Taixinjan, active ingredient: tegoprazan); △Carephar Pharmaceuticals’ “H008” (code name: keverprazan); △ Synclus Pharma’s X842 (code name: linaprazan) △ Daewoong Pharmaceutical’s Pexuclu (pexuprazan). In addition, Onconic Therapeutics’ Jacubo (zastaprazan) is currently undergoing the approval process through its local partner, Livzone Pharmaceuticals, and the competitive landscape is expected to expand to a six-way race.

K-Cap’s Competitive Edge:

In the Chinese pharmaceutical market, inclusion in the Value-Based Payment (VBP) program has recently emerged as a key criterion for assessing competitiveness. This is because, while products must survive in a large-scale, generic-dominated bidding market once their patents expire, those still under patent protection can be sold as premium, brand-name products.

TakeCap, the leading product that once held about 60% of the market share, is facing an inevitable decline in sales as numerous generics have been approved. In the VBP held last month, more than 40 TakeCap generics met the eligibility requirements, making it the most competitive product category, and around 10 products were selected as preliminary winning bidders.

In contrast, K-Cap maintains its status as a patented new drug and is therefore excluded from the VBP bidding process. Instead of bidding, it can defend its drug price through negotiations for inclusion in the National Reimbursement Drug List (NRDL) and establish itself as a premium product. This means that, for the time being, K-Cap is immune to the impact of drug price reductions under the VBP.

In terms of reimbursement, K-Cap also outperforms its competitors. HK InnoN’s Chinese partner for K-Cap, Luoxin Pharmaceutical, has sequentially secured three indications—starting with erosive esophagitis, followed by duodenal ulcers, and finally Helicobacter pylori eradication therapy—all of which are listed on China’s NRDL and covered by insurance. Among the five P-CABs approved in China, TakeCap and H008 are covered for only two indications, while K-Cap is the only product covered for all three indications.

This expansion of coverage is translating into increased prescription volumes. According to Luoxin Pharmaceutical’s business report, annual orders for K-Cap exceeded 10 million boxes last year, marking an increase of more than 60% compared to the previous year. Furthermore, according to a recent report by Minemang, a Chinese pharmaceutical market research firm, K-Cap ranked first in sales among brands of treatments for gastric acid secretion-related diseases in Chinese public medical institutions during the first quarter of this year.

HK InnoN secured approximately 5 billion won in royalties from K-Cap sales in China during the second quarter and is projected to secure annual royalties of around 20 billion won this year, driven by the expansion of insurance coverage.

An HK Innoen official stated, “K-Cap is currently covered by Chinese health insurance for all three of its indications, and its local sales base is expanding thanks to its rapid onset of action and ease of administration,” adding, “Royalty revenue is also on the rise due to increased usage in China.”

Strategy to Secure Additional Competitive Edge: Clinical Trials for “Injectable Formulation” Underway

HK InnoN is also accelerating the development of an injectable formulation to enhance K-Cap’s competitiveness. According to industry sources, injectable prescriptions account for around 40% of the Chinese market for peptic ulcer treatments. Since injectables form a separate market within the VBP structure—which is dominated by oral formulations—diversifying dosage forms is expected to not only expand sales but also serve as a means to defend against drug price cuts.

HK InnoN’s partner, Luoxin Pharmaceutical, is currently conducting a Phase 2 clinical trial in China to secure approval for the injectable formulation of K-Cap. The injectable product “LX22001,” currently under development by Luoxin Pharmaceutical, is targeting the treatment of bleeding from peptic ulcers and the prevention of stress-induced ulcer bleeding in critically ill patients. Luoxin Pharmaceutical is also preparing to advance to a Phase 3 trial.

Among competing products, Jacubo’s injectable formulation is in the Phase 1 clinical trial stage, meaning K-Cap’s injectable formulation is further along in R&D; K-Cap is expected to secure a leading position in the injectable market.

An official from HK InnoN stated, “Competition for P-CAB-class drugs in the Chinese market is expected to intensify, but K-Cap will increase its market share and sales through differentiation strategies such as the widest coverage under national health insurance and its injectable formulation.”