What actually holds second place in China is paperwork. All three of Taixinzan's Chinese indications, erosive esophagitis, duodenal ulcers and Helicobacter pylori eradication, sit on the National Reimbursement Drug List, and it is the only P-CAB approved in China with coverage across all three [8]. The patent extension granted in the first half runs 64 months past the month Takeda's compound patent lapses [7], which is the difference between adding hospitals at your own price and adding them at a procurement price.
For HK inno.N, none of the Chinese end-market number lands on its own income statement. Royalties from Taixinzan were 4 billion won in the first quarter and 5 billion in the second, an estimated 9 billion for the half, with the full year projected near 21 billion won and up roughly 50% [6]. That growth rate implies about 14 billion won last year [1], against Chinese sales of roughly 180 billion won in the same period [5], for an implied royalty rate close to 8% [2]. The full-year projection implies 12 billion won in the second half, a third more than the first [3]. With China at 70% of K-CAB's global sales [7], the whole global book is around 257 billion won [4].
The growth is also changing character. The 402 additions in the first half sit on a base of about 2,500 institutions, so roughly 16% in six months, close to the pace of the previous year's 30%-plus expansion [5]. Sales growth, though, has come down from about 140% year-on-year to just over 30% [6]. The hospital count is compounding at the same rate; the revenue base it compounds against is bigger.
The next step change is a formulation, not a country. Luoxin is running a Phase 2 trial of LX22001, an injectable version of K-CAB, into a market where injectables are about 40% of peptic ulcer treatment [11]. Jung Jae-won of iM Securities expects share and royalties in China to keep climbing on broader reimbursed indications and the injectable programme [12]. Both of those levers belong to the partner: Luoxin runs the trial, the hospital listings and the sales, and reports the digestive line that grew 28.1% to 683.4 million yuan in the half [4].
That is the shape of the exposure. Daewoong's Fexuclue carries a single approved Chinese indication, erosive esophagitis, from September last year, and only filed for insurance listing in June [13]. Livzon's Zastaprazan filing covers erosive gastroesophageal reflux disease [15]. A third Korean approval would start where K-CAB started rather than where it now sits, and the only Korean product with a reimbursed footprint across three indications is one whose Chinese revenue, trials and hospital access are all executed by someone else. The royalty line is the company's read on Luoxin's performance and on the NRDL renewal cycle, and until the injectable arrives, there is not much else in it.
