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Lotus Pharmaceuticals, Inc. (LTUS.OB) Subsidiary Receives Patent for Controlled-Release Diabetes Treatment

|Includes: Lotus Pharmaceuticals, Inc. (LTUS)

Yesterday, profitable medicine and drug manufacturer Lotus Pharmaceuticals, Inc., announced that the State Intellectual Property Office of the People’s Republic of China issued a patent to its wholly owned subsidiary, En Ze Jia Shi Pharmaceuticals. The patent, issued for controlled-release oral gliclazide, covers the composition and preparation methods for the drug through 2030.

Gliclazide is commonly used to control mild to moderate adult-onset Type 2 diabetes. Lotus’ innovative controlled-release tablet is formulated using osmotic pump technology, encasing the drug in a semi-permeable framework for a gradual, sustained release. As per the design, pH, gastric acid and food intake will have a minimal effect on the release. In preclinical studies, the tablets demonstrated a similar rate of drug release in both in vitro and in vivo models.

According to the Company’s proprietary market research, the worldwide diabetic population is expected to reach 239 million people by 2010. China currently has about 40 million diabetic patients, with an additional 1.5 to 2 million patients diagnosed each year. Gliclazide accounts for approximately 28% of the sulfonylurea market in China. China’s diabetes drug market is expected to surpass RMB 10 billion (US $1.5 billion) in four years

Chairman and Chief Executive Officer Mr. Zhongyi Liu stated, “We believe our controlled-release gliclazide tablet will have a meaningful impact on the clinical treatment of diabetes. The drug release rate of conventional oral gliclazide is uncontrolled, which can lead to unpleasant side effects due to quick drug release. Our controlled-release formulation has the potential to provide a more stable and sustained drug delivery compared to conventional gliclazide, resulting in fewer side effects, greater efficacy and an improved safety profile. In addition, the controlled-release tablet could potentially reduce dosing frequency. This is a significant benefit for diabetic patients, who generally require long-term daily medication.”

Mr. Liu continued, “We expect to start clinical trials in 2012 after receiving authorization from the State Food and Drug Administration, with regulatory approval expected in 2014. Our market research indicates that the global gliclazide market will reach RMB 1.5 billion, or approximately $225.7 million, by that time. We aim to capture nearly one-tenth of this market, achieving peak sales of approximately $15 million per year. We expect a gross margin of about 60 percent and a net profit of about 30 percent for this product. The demand and market potential are significant, and given our 20-year patent protection, we expect to enjoy market exclusivity for controlled-release gliclazide through at least 2030.”

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