Is Taiwan's Genovate Biotechnology on track to become China's top insulin maker?

Taiwan's Genovate Biotechnology has started construction on an insulin manufacturing hub in China that aims to be the top producer by investing up to $1 billion, putting it toe-to-toe with multinationals such as Sanofi ($SNY), Eli Lilly ($LLY) and Novo Nordisk ($NVO) as well as domestic companies increasingly winning tender business.

Changzhou National Hi-tech District

But the company, in a release, said it is starting small with the $55 million first phase of Genovate Biotechnology's Insulin Ecological Industrial Park in Changzhou National Hi-tech District facility.

The unit will house a one metric ton fermentation production line and is forecast to be online in 2018, the company said in the release.

"With a total investment of US$1 billion, Genovate's biologics project follows a plan based on a strategy that calls for a three-phased investment process meant to assure steady growth following the planning and design phase," the release said, noting the details of the first phase. "Once construction is completed and the facility is put into full production, annual production is expected to reach 10 tons of insulin series products and APIs plus 1 billion bottles of preparations."

More than 100 million people in China have Type 1 or Type 2 diabetes, according to the International Diabetes Federation, with human insulin products the key market and diagnosis a growing factor in control.

In second-quarter earnings calls, multinationals noted changes in tender pricing for insulin and other reimbursed products in China as competition increased with local manufacturers gearing up production levels on the assumption of taking away order from multinationals, often stymied on timely regulatory approvals for newer products in the Middle Kingdom.

In June, China's National Health and Family Planning Committee issued new guidelines on tenders that introduced qualifying guidelines on quality and then suggested that pricing would be key among such companies. The previous system gave credit to both quality and pricing criteria that helped long-running manufacturers like multinationals to an extent.

- here's the release

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