In recent years, China's biomedical industry has been accelerating its development, with pharmaceutical companies signing major overseas Business Development (BD) deals. Among them, Gan & Lee Pharmaceuticals recently secured a licensing agreement with a total upfront and milestone payment of up to €726 million, drawing significant market attention to this veteran insulin giant as it accelerates its transformation into an innovative drug company.

On August 10, after the market closed, Gan & Lee Pharmaceuticals announced it had reached an exclusive licensing agreement with Italy's leading pharmaceutical company, Menarini. The deal grants Menarini the rights to develop and commercialize Gan & Lee Pharmaceuticals' self-developed drug, Bofanglutide, for the indication of overweight or obesity, in 39 European countries and regions. The announcement stated that Menarini will pay a non-refundable upfront payment of €62 million to Gan & Lee Pharmaceuticals, with the potential for cumulative milestone payments of up to €664 million. After the product achieves commercial sales, Menarini is also required to pay royalties to Gan & Lee Pharmaceuticals. In the Chinese innovative drug industry, a total upfront plus milestone payment of €726 million is not exceptionally high, but for an insulin-focused company like Gan & Lee Pharmaceuticals, whose performance has not matched its peak in recent years, this overseas deal carries significant positive implications. Following the announcement, Gan & Lee Pharmaceuticals' stock price hit the daily limit up on August 11, and continued to rise over the next two trading days, reaching a market capitalization of ¥46.3 billion by the close on August 13. Can Gan & Lee Pharmaceuticals achieve a performance turnaround with this major weight-loss drug deal?

Before gaining market attention with Bofanglutide, Gan & Lee Pharmaceuticals was best known as a domestic leader in insulin. In 1974, Gan Zhongru graduated from the Biology Department of Peking University and stayed on as a teacher before pursuing studies in the United States. He earned a Ph.D. in Biochemistry from Michigan State University in 1987 and worked as a Senior Biochemist at the pharmaceutical giant Merck. Motivated by the development of China's pharmaceutical industry, Gan Zhongru founded a small company in the U.S. in 1994, collaborating with Tonghua Dongbao, founded by his Peking University classmate Li Yikui, to conduct research in China. Four years later, Gan Zhongru's team successfully developed second-generation recombinant human insulin and sold the patent to Tonghua Dongbao, which launched it as "Gansulin". Subsequently, Gan Zhongru and Tonghua Dongbao jointly established Gan & Lee Pharmaceuticals to develop third-generation insulin. In 2005 and 2007, Gan & Lee Pharmaceuticals launched "Changxiulin" and "Suxiulin", targeting long-acting and ultra-short-acting effects, respectively. In its early days, Gan & Lee Pharmaceuticals was a research-oriented company with limited funds and market experience, remaining in a loss-making state until 2008, despite its products being on the market. The company only achieved profitability as its insulin products rapidly gained volume. After a performance surge, Gan & Lee Pharmaceuticals sought an independent listing, but its second-largest shareholder, Tonghua Dongbao, which also produced second-generation insulin, presented a conflict of interest that violated listing regulations. After negotiations, in 2011, Gan & Lee Pharmaceuticals transferred its third-generation insulin technology to Tonghua Dongbao in exchange for its full exit, thus removing the obstacle to listing. Gan & Lee Pharmaceuticals first attempted an IPO in 2013, but the application was terminated for review in 2014. Four years later, it restarted the IPO process and successfully passed the review in April 2018, eventually listing on the main board of the Shanghai Stock Exchange in June 2020. At that time, Gan & Lee Pharmaceuticals' main products were still insulin analogs, including recombinant insulin glargine injection (Changxiulin), recombinant insulin lispro injection (Suxiulin), and insulin aspart injection (Ruixiulin), with gross margins exceeding 90%. In the domestic third-generation insulin market, besides the three major foreign companies Novo Nordisk, Sanofi, and Eli Lilly, Gan & Lee Pharmaceuticals held the highest market share, establishing itself as the domestic leader. After listing, Gan & Lee Pharmaceuticals' stock price surged rapidly, with its market capitalization once exceeding ¥110 billion. In 2021, Gan & Lee Pharmaceuticals' net profit reached its historical peak. That year, its revenue grew by 7.44% to ¥3.612 billion, and its net profit attributable to the parent company reached ¥1.453 billion, a year-on-year increase of 18.04%. However, 2021 also marked a critical turning point for the company. In November 2021, the sixth round of China's national centralized drug procurement (specifically for insulin) was held. All 11 bidding companies were awarded contracts. Gan & Lee Pharmaceuticals adopted an aggressive pricing strategy, with its second and third-generation insulin products experiencing an average price reduction of over 50% compared to pre-procurement market prices, with most reductions in the 52%-67% range. Affected by the price cuts, Gan & Lee Pharmaceuticals' revenue halved to ¥1.712 billion in 2022, and the company recorded its first-ever loss, with a net profit attributable to the parent company of -¥440 million. In 2023, based on a low base, Gan & Lee Pharmaceuticals saw a significant performance recovery. In the 2024 follow-up centralized procurement for insulin, the winning bid prices for Gan & Lee Pharmaceuticals' six insulin products increased compared to the previous round, with an average rise of 31%, which contributed to the company's accelerated performance recovery. In 2025, Gan & Lee Pharmaceuticals' revenue reached ¥4.052 billion, exceeding the 2021 level, but its net profit attributable to the parent company was ¥1.144 billion, still far from the ¥1.453 billion achieved in 2021. In the first quarter of this year, both revenue and net profit attributable to the parent company declined again, with the latter dropping nearly 40% year-on-year. However, beyond its financial performance, Gan & Lee Pharmaceuticals also gained significant opportunities from the centralized procurement. During the 2024 procurement renewal, Gan & Lee Pharmaceuticals' market share increased from 8% in the first procurement to 17%, second only to Novo Nordisk. In the third-generation insulin market, which accounts for 70% of procurement volume, Gan & Lee Pharmaceuticals' share rose to 24%, still second to Novo Nordisk but significantly ahead of other competitors. From a market share perspective, Gan & Lee Pharmaceuticals' strategy of "exchanging price for volume" through centralized procurement has been successful, but its performance has yet to return to its peak. Since its listing, the company has also been actively developing innovative drugs, with Bofanglutide being one of its key pipeline products. Can this insulin giant return to its peak by leveraging Bofanglutide?

The capital market's relatively positive reaction to Gan & Lee Pharmaceuticals' major overseas deal is not difficult to understand. Bofanglutide belongs to the GLP-1 receptor agonist (GLP-1RA) field, which is currently the most commercially valuable therapeutic area globally, covering two major areas of high demand: blood sugar control and weight loss. This field has produced two blockbuster "drug kings": Tirzepatide and Semaglutide. In this competitive landscape, Gan & Lee Pharmaceuticals' investigational drug Bofanglutide possesses clear differentiated competitive advantages. According to company announcements, the indications under development for Bofanglutide include type 2 diabetes and obesity/overweight management. Its key feature is a bi-weekly dosing regimen, which clearly differentiates it from the currently popular weekly injectable drugs Semaglutide and Tirzepatide. Clinical data for Bofanglutide has been promising. In a Phase IIb clinical study for the diabetes indication, patients treated with Bofanglutide for 24 weeks showed greater reductions in HbA1c (glycated hemoglobin) and body weight compared to the group receiving once-weekly Semaglutide (Novo Nordisk's product), with good safety and tolerability. For the overweight/obesity indication, Bofanglutide is the first single-target GLP-1RA in the world to be evaluated in a head-to-head study against Tirzepatide for weight loss efficacy. Bofanglutide is currently in Phase III clinical trials in China for both the obesity/overweight and type 2 diabetes indications. In the history of GLP-1 receptor agonists, long-acting properties have been a significant advantage, and Bofanglutide has garnered significant attention for this reason. Data indicates that the total market size for GLP-1 receptor agonists in the first half of this year was approximately $47.5 billion, suggesting immense potential if Bofanglutide is successfully launched and gains market recognition. Leveraging its differentiated advantages, Bofanglutide has already achieved several breakthroughs in overseas licensing. In 2025, Gan & Lee Pharmaceuticals signed licensing agreements with the Latin American pharmaceutical company PC and India's Lupin Limited for Bofanglutide, though the amounts were not disclosed. In April of this year, Gan & Lee Pharmaceuticals reached a licensing agreement with South Korea's JW Pharmaceutical, involving a non-refundable upfront payment of $5 million and milestone payments of $76.1 million, along with tiered royalties based on net sales after commercialization. The deal with Menarini has set a new record for the licensing value of Bofanglutide. However, it is crucial to note that while the GLP-1 market is vast, competition is also exceptionally fierce. The current market is a duopoly, with Eli Lilly's Tirzepatide and Novo Nordisk's Semaglutide collectively holding over 95% of the market share, leaving relatively limited space for other competitors. Domestic company Innovent Biologics has also made a strong showing with Mazdutide, the world's first approved GCG/GLP-1 dual receptor agonist. Additionally, Hengrui Medicine's Rupopetide has had its marketing application for the weight loss indication accepted by the drug regulator in 2025, with a submission for the diabetes indication planned soon. Beyond injectable GLP-1 drugs, various pharmaceutical companies are accelerating the development of oral GLP-1 formulations. In September 2019, oral Semaglutide for diabetes was approved in the U.S., followed by approval in China in January 2024. In December 2025, oral Semaglutide for weight loss was approved in the U.S. In the first half of this year, oral Semaglutide for diabetes generated approximately $1.531 billion in revenue, while the oral version for weight loss contributed about $855 million, demonstrating strong sales performance. Eli Lilly's oral GLP-1 product was also approved in the U.S. in April of this year for obesity treatment. This Lilly product is slightly less effective than oral Semaglutide but offers greater convenience, as it can be taken at any time of day without fasting or fluid restrictions. In contrast, oral Semaglutide must be taken early in the morning on an empty stomach with a small amount of water, and patients must wait at least 30 minutes before eating. Oral GLP-1 products from Hengrui Medicine, Huadong Medicine, and Hansoh Pharma are also under development. Compared to injectable products, oral drugs have a lower barrier to use, and their administration methods are becoming more convenient, aligning more closely with patients' conventional medication habits. This could potentially impact the long-term prospects of injectable products like Bofanglutide. Currently, Bofanglutide has not yet completed Phase III clinical trials, and some risks remain. Even if it is approved for marketing, whether it can successfully navigate the competitive landscape dominated by Eli Lilly and Novo Nordisk, along with other players, remains to be seen. This uncertainty introduces significant variability into the value of the current deal. Besides the non-refundable upfront payment of €62 million, the subsequent milestone payments of up to €664 million from Menarini are contingent upon specific development, approval, and sales milestones, making them highly uncertain. Royalties will only be realized after commercial sales begin. In summary, while Gan & Lee Pharmaceuticals has secured the €62 million upfront payment from this major overseas deal, the remaining payments are closely tied to factors such as the progress of research and development, regulatory approval, and sales performance. Whether Bofanglutide can be successfully approved and achieve a differentiated competitive advantage to drive volume in both domestic and international markets will directly impact Gan & Lee Pharmaceuticals' future performance. Whether this insulin giant can return to its peak with this GLP-1 product is worth watching.