Hefei Tianhui Incubator of Technologies will pay Oramed an initial $3m to enter licensing and investment agreements for its oral insulin candidate, ORMD-0801, but milestone and royalties could push the total to $50m.
Oramed COO Josh Hexter told in-Pharmatechnologist.com the deal will give Hefei the rights to the Phase II candidate for both type 1 and type 2 diabetes indications, in China, Hong Kong and Macau, if it reaches commercialisation.
Hefei is partially owned by China’s Sinopharm Group Company and has an insulin facility in Hefei, about 400km west of Shanghai.
“The long-term commercialisation plan is to use their insulin with the firm hopefully manufacturing the API [for ORMD-0801] by early 2016,” Hexter said, adding Oramed could use Hefei for its global API supply in the future.
Oramed will also transfer the formulation technology to the Chinese firm, which will use it to make the drug for the local market. However, while local supply is the focus Hexter said Oramed would look at buying any surplus.
The Israeli firm had been in discussion with Guangxi Wuzhou about launching the pill in China, but these talks collapsed in in July.
Guangxi Wuzhou still owns still a 6.5% stake in the Israeli drug delivery firm.
The worldwide rights outside China, Hong Kong and Macau remain with Oramed, though the firm is keeping its eyes open for a commercialisation deal with a Big Pharma firm.
The challenge with delivering insulin orally, as with other proteins, comes from the degradation within the digestive system and the lack of absorption by the gut wall due to the size of the molecule.
But according to Hexter, Oramed has overcome these issues by formulating a tablet with an enteric coating that protects the API within the low pH of the stomach and is released by the higher pH levels in the intestine.
Meanwhile, protease inhibitors help stop the body from degrading the API and absorption enhancers aid the large-molecules cross the digestive membrane into the bloodstream.
“The API directly hits the liver which is the main organ that stores glucose and regulates it around the body,” Hexter said. “Our candidate blankets the liver with insulin, nipping the problem of increased patient glucose levels in the bud.”
Inhaled insulins too have entered the market, and while Pfizer’s Exubera was pulled in 2007, Sanofi signed a commercialisation deal with MannKind Corporation last year and launched Afrezza onto the US market in February.