(Yicai) Dec. 31 -- Shares of Everest Medicines dropped after the Chinese biopharmaceutical company's immunoglobulin A nephropathy treatment was successfully replicated, with patent protection of innovative drugs becoming a significant issue in the industry.

Everest Medicines [HKG: 1952] ended 2.3 percent lower at HKD36.98 (USD4.75) a share in Hong Kong today. The stock has plunged 26 percent since Dec. 18.

The patent for Everest Medicines' Nefecon, a capsule containing enteric-coated beads of budesonide, will expire on May 7, 2029, with the company reserving the right to take any necessary legal actions moving forward, it said in response to the approval of similar treatments in China. The drug sales topped CNY1 billion (USD140 million) in the first nine months of this year.

The National Medical Products Administration approved Herui Pharmaceutical's generic budesonide kidney disease treatment on Dec. 16. But based on its patent type, it cannot be launched until the patent of Shanghai-based Everest Medicines expires.

However, CSPC Pharmaceutical Group and Qilu Pharmaceutical have also applied for marketing approval of such generic drugs, but with different types of patent declarations, placing them outside the scope of Everest Medicines' patent protection.

CSPC Pharma and Qilu Pharma may have developed generic solutions that do not infringe on the core patents of Everest Medicines' drug by altering the formulation process or adopting different technological approaches during their application, according to market speculations. If the pair's treatments get the green light, they would likely be able to start marketing their products before May 8, 2029.

The patent system balances the protection of innovation with the encouragement of patent challenges, Zhou Liyun, chairman of PharmCube, told Yicai. Innovative drugmakers aim to fully protect their patents, enhance protection barriers, and extend patent duration, Zhou pointed out.

From the perspective of challenging patents, finding ways to overcome patent protection also requires considerable effort and creativity, according to Zhou, noting that competition ultimately achieves a balance between innovation incentives and public interests.

Stockholm-based Calliditas Therapeutics granted Everest Medicines the rights to Nefecon in China and Singapore in June 2019, with the drug approved by the NMPA in November 2023. The capsules are intended for the treatment of adults with primary IgA nephropathy who are at risk of disease progression.

Nefecon launched in the Chinese mainland in May last year. It was subsequently included in the national medical insurance reimbursement list.

Editor: Martin Kadiev