To build a successful publically-traded company of any nature can be a long and tenuous task. There are products to develop, manage and market. A successful team must be at the helm to give structure and to lead the company smoothly through all transitions and deal with shareholders who, let’s face it, may not be the most patient at times. That’s for a typical company.
In the world of biotechnology, the process can be very slow as, quite simply, there is no rushing the development of a drug through the process of it reaching the market. In the case of Lotus Pharmaceuticals Inc. (OTCBB:LTUS), a fast-growing, profitable developer, manufacturer and seller of medicine and drugs in the People's Republic of China, the process is rolling along smoothly and systematically. Over the past couple of months, Lotus has announced the announced changes in senior executives to maximize efficiency and further structure the organization.
Lotus has drugs in development including R-Bambuterol® in Clinical Trial I, which is on schedule to be completed in the next four months. In pre-clinical trials, R-Bambuterol® Hydrochloride Tablets showed significant efficacy and less toxicity as an anti-asthma drug than Bambuterol, currently the drug of choice available in the market.
For any bulletin board company to have any drug in any clinical trials sets the owning company apart from most others listed on the exchange. In the case of Lotus, the Company announced today its wholly owned subsidiary, En Ze Jia Shi Pharmaceuticals, has received a new patent for controlled-release oral Gliclazide by the State Intellectual Property Office of the People's Republic of China.
Gliclazide is commonly used to control mild to moderate adult-onset Type 2 diabetes. The drug belongs to the second generation of sulfonylureas, a class of anti-diabetic drugs that stimulate the pancreas to release more insulin. Lotus' novel controlled-release Gliclazide tablet is formulated using osmotic pump technology, which encases the drug in a semi-permeable framework for a gradual, sustained release. The drug release is designed to be minimally affected by pH, gastric acid and food intake. In preclinical studies, the tablets demonstrated a similar rate of drug release in both in vitro and in vivo models.
Diabetes has reached pandemic proportions as is estimated to affect nearly a quarter of a billion people worldwide. In China alone, there are approximately 40 million diabetics with the community of those afflicted with the disease adding 1.5 to 2 million diagnosed new members each year. The diabetic drug market in China is estimated at a whopping $1.1 billion dollars annually and, at its current pace, will exceed $1.5 billion by 2015. Of the $1.1 annual diabetic treatment revenues, Gliclazide accounts for approximately 28%, or nearly $200 million, of the sulfonylurea market in China.
Now that the patent process is behind Lotus, moving forward and performing clinical trials will be the next goal. Lotus expects to start human trials in 2012 after receiving authorization from the State Food and Drug Administration, with regulatory approval expected in 2014. Due to the fact that the Lotus product is time-released, they feel that the product is superior to the current Gliclazide drug, which is uncontrolled and can lead to unpleasant side effects due to quick drug release. Management believes that Lotus should be able to capture at least one-tenth of the industry revenues. At that time, that should equate to approximately $15 million per year.
Many in the industry feel that Lotus has extreme potential because of the quality of its drugs in development. Shares of LTUS are trading nearly ten times above their two-year lows, but are still in a consolidation after the last run and are sure to get the attention of some long biotech investors at their current level of $1.13 and a market cap of only $60 million.
