China's Wuzhou says it will take 10% stake in oral insulin specialist Oramed for $52M

China's Guangxi Wuzhou Zhongheng Group disclosed that it intends to purchase a 10% stake in Israeli pharma company Oramed for $52 million, in return for exclusive Chinese distribution rights to its oral insulin following regulatory approval, according to a briefing from Reuters.

Oramed ($ORMP) aims to deploy its Protein Oral Delivery platform to commercialize oral insulin capsules for Type 1 and 2 diabetes, as well as an oral Glucagon-like peptide-1. Both insulin and GLP-1 are mainly available in injectable form at the moment. The company says its drug delivery technology protects orally administered proteins from acids and enzymes within the gut, and has an enhancer that improves absorption across the intestinal wall.

Wuzhou's intention reflects the rapid rise of diabetes in China, where more than 100 million adults already have the disease, according to the Lancet, which states the population is particularly vulnerable to Type 2 diabetes.

Wuzhou previously purchased Oramed shares in November, when it paid $5 million in to buy 696,378 shares for $7.18 apiece. "China offers a substantial market opportunity for our diabetes focused pipeline and we are delighted to have Wuzhou as a supportive shareholder, as they can help strategically guide our development and commercial entrance into China," said Oramed CEO Nadav Kidron in a statement made at the time.

Other Chinese investors have shown an appetite for the diabetes market as well. In May, China's Sinocare and state-owned investment company Citic Group reportedly made a made a joint bid of about $1 billion for Bayer's blood glucose monitoring business. Private equity backed Panasonic Healthcare later won the unit for about $1.2 billion.

Meanwhile, Oramed suffered a setback in April 2014, when one-third of the patients in its Phase IIa trial of oral insulin for Type 2 diabetes absorbed less than half of the intended dosage due to a formulation issue. That knocked the stock price from a high of $26 earlier that year to around $10, and it hasn't bounced back since, making the potential $52 million in funding even more important.

Oramed just announced that it is pushing the candidate forward anyway and recently enrolled the first patient in the med's Phase IIb trial.

Mannkind ($MNKD) and Sanofi's ($SNY) inhaled Afrezza is a current alterative to injectable insulin. It's off to a slow launch, but showing some signs of gaining traction, if social media and doctors' surveys are to be believed. An oral insulin would offer an even bigger upgrade over injections compared with the inhaled option, at least in terms of convenience as an administration pathway.

- here's the news from Reuters

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