The recent market rotation has seen the spotlight shift from AI to the pharmaceutical sector, with innovative drug stocks capturing investor attention. Some have quipped that healthcare stocks only rally when there's a lack of other market themes, but recent developments suggest more substance. Following multiple policy announcements from the National Healthcare Security Administration on June 22nd and new drug approvals for several domestic companies, the sector has garnered positive momentum. Amid this backdrop, Gan & Lee Pharmaceuticals. (SHSE: 603087) has announced the approval of its insulin glargine in the United Arab Emirates, just before the Dragon Boat Festival.
Building a Global Presence
While the innovative drug space faces intense competition, Gan & Lee Pharmaceuticals. is making significant strides internationally with its biosimilar insulins. The company has been steadily expanding its overseas footprint. Its insulin glargine gained market access in the EU, Iceland, Norway, and Liechtenstein in January, followed by approvals for insulin aspart and insulin lispro in the EU in May. Following its entry into Brazil last year, the US market remains a key target for the company.
Insulin is no longer considered a high-margin business. Since the introduction of the first insulin glargine biosimilar by Boehringer Ingelheim and Eli Lilly in 2015, prices have declined sequentially across Europe, China, and the US. A 300-unit pen of insulin glargine now costs under 100 RMB in most markets outside the US, making it a low-price, low-margin product. However, the global insulin market is still substantial, valued at nearly $30 billion. Gan & Lee Pharmaceuticals. is now beginning to demonstrate its performance in this arena.
A Cost Advantage Formula
The prevalence of diabetes correlates with socioeconomic development, creating stable, long-term demand for insulin. The UAE market, with a high GDP per capita and diabetes prevalence, presents a clear opportunity. While Sanofi currently dominates this market, Gan & Lee Pharmaceuticals. holds a critical advantage: significantly lower production costs.
Sanofi's manufacturing cost for a 300-unit insulin glargine pen in its German facility is estimated between $4.50 and $6.00. In contrast, Gan & Lee Pharmaceuticals. can produce 100 IU of insulin for just $0.56 to $0.70, thanks to lower land, labor, and energy costs in China. This cost edge extends to injection devices; while Sanofi and Novo Nordisk rely on expensive pens from suppliers like Ypsomed, Gan & Lee Pharmaceuticals. sources components like pistons from domestic suppliers such as Hualan Biological Bacterin, keeping overall costs down. This allows its total insulin glargine cost to be half or even one-third of Sanofi's, providing a strong competitive position in markets like Europe.
The Power of Partnership
A major factor in Gan & Lee Pharmaceuticals. international strategy is its partnership with Sandoz, signed in late 2018, which grants Sandoz commercialization rights for key insulin products overseas. As a pioneer in biosimilars with a strong European presence, Sandoz is an ideal partner. The company has expressed strong enthusiasm for adding insulin glargine to its portfolio, seeing it as a step toward its long-term biosimilar sales goals. Sandoz's motivation is underpinned by Gan & Lee Pharmaceuticals. low supply price, which provides ample room for pricing and marketing. Sandoz aims for a full European rollout by early 2027, positioning it to challenge competitors like Viatris and Eli Lilly.
The Crucial US Hurdle
The real challenge lies in the United States, which accounts for roughly 44% of global insulin sales. While patient out-of-pocket costs are capped, product prices remain the highest globally. Sandoz's US sales network and relationships with Pharmacy Benefit Managers (PBMs) are well-suited for insulin promotion. However, Gan & Lee Pharmaceuticals. faces a significant delay. Its insulin production facility has been under remediation following an FDA inspection in 2024, and management has stated that US approval progress has not met expectations.
This delay was highlighted when Dongyangguang Pharmaceutical's insulin glargine received FDA approval in early May, becoming the first Chinese insulin to launch in the US. This has created uncertainty, making the FDA approval process a critical factor for Gan & Lee Pharmaceuticals. market valuation.
Future Growth Prospects
Gan & Lee Pharmaceuticals. reported overseas revenue of 530 million RMB in 2025 with a 43% gross margin. The European market offers clear potential. If Sandoz successfully captures a market share similar to Viatris's current ~8% in Europe for insulin glargine, it could translate to terminal sales of around 150 million euros for that product alone. Adding sales of its short-acting insulins could significantly boost overseas revenue. Securing US approval within the year would further improve the company's revenue outlook for the coming year.
In the era of GLP-1 drugs, insulin may seem like a smaller business, one that giants like Eli Lilly and Novo Nordesk are scaling back. However, in clinical practice, insulin and GLP-1 therapies are often used in combination. The market opportunity for Gan & Lee Pharmaceuticals. is in the coming years, presenting a chance to capitalize on a niche yet essential segment of diabetes care.
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