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Shares of Everest Medicines declined after the successful replication of their immunoglobulin A nephropathy treatment, highlighting ongoing issues surrounding patent protection for innovative drugs in the industry.
The company’s stock in Hong Kong closed down 2.3%, falling to HKD36.98 (roughly USD4.75) per share. Since December 18, the stock has dropped approximately 26%.
The patent for Everest Medicines’ flagship drug, Nefecon—a capsule composed of enteric-coated beads of budesonide—is set to expire on May 7, 2029. The company has stated it reserves the right to pursue any necessary legal actions in response to the approval of similar treatments in China. Nefecon generated sales exceeding CNY1 billion (about USD140 million) during the first three quarters of this year.
Recently, the National Medical Products Administration approved a generic version of budesonide for kidney disease from Herui Pharmaceutical on December 16. However, due to the specific patent type, this generic cannot be launched until Everest Medicines’ patent expires.
Meanwhile, CSPC Pharmaceutical Group and Qilu Pharmaceutical have also submitted applications for approval of similar generic drugs, but with different patent claims, potentially avoiding infringement of Everest’s patents.
Market analysts suggest that these firms may have developed alternative formulations or employed different technological approaches that do not violate the primary patents, allowing them to bring their products to market before the May 2029 patent expiration. If approved, these generics could potentially be sold starting prior to that date.
Industry insiders believe that the patent system is designed to strike a balance between protecting innovation and encouraging patent challenges. While patent holder companies strive to secure comprehensive protection, extending their patent rights and increasing barriers to entry, challengers often explore inventive ways to circumvent existing patents—contributing to a dynamic balance that benefits both innovation and public access.
In June 2019, a pharmaceutical company based in Stockholm granted Everest Medicines the rights to distribute Nefecon in China and Singapore. The drug was approved by Chinese regulators in November 2023 and is indicated for treating adults with primary IgA nephropathy at risk of disease progression.
Nefecon was introduced in mainland China in May of the previous year and has since been included in the country’s national medical insurance reimbursement list.
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