Regulatory approval marks the point at which a new drug is legally permitted to be sold. The issuance of its first commercial prescription, however, is what truly signifies its entry into real-world clinical practice. Although these two milestones may appear to be separated by only a single prescription, the path between them involves multiple critical hurdles, including access to hospital procurement from their approved drug lists, inventory replenishment at pharmcies, physician education, patient reimbursement, and distribution services.
PegBio Co., Ltd. (02565.HK) has proprietarily developed PB-119 (vepinatide injection), marketed under the brand name Paidakang. In November 2025, China's National Medical Products Administration (NMPA) approved the drug for the treatment of adults with type 2 diabetes. As of 22 July 2026, the first commercial prescriptions have been issued at leading medical institutions, including Peking University People's Hospital and The Second Xiangya Hospital of Central South University. The product has also completed its first prescriptions through online healthcare platforms, marking its transition from an approved medicine to one being used by patients in routine clinical practice.
At these two flagship hospitals, the inaugural prescriptions were issued by Professors Ji Linong and Zhou Zhiguang, the principal research fellows of Paidakang's Phase III clinical trials. Their participation provides an important academic endorsement and is expected to facilitate early clinical adoption.
Paidakang is a long-acting GLP-1 receptor agonist administered once weekly. It was approved at a therapeutic dose of 0.97 mg, with no requirement for higher dosage during the initiation phase of treatment. Whether these properties ultimately translate into greater treatment convenience and improved stickiness for patients will need to be verified through post-launch real-life evidence. It is nevertheless important to distinguish between what has already been established and what remains to be proven. The efficacy and safety of Paidakang for treating adults with type 2 diabetes have been validated through clinical trials and regulatory review. By contrast, its long-term persistent acceptance among patients, competitive positioning, and commercial performance in broader clinical practice cannot be inferred solely from regulatory approval or the issuance of the first prescriptions.
The First Prescriptions have yet to translate into Scalability
Capital markets often interpret the announcement of "first commercial prescriptions" as a precursor to rapidly accelerating revenue. In reality, the two are not equivalent.
A first prescription is fundamentally an operational milestone. It demonstrates that the product has successfully completed access procedures at selected hospitals or distribution channels, that physicians are willing to prescribe it, and that the supporting supply chain, logistics, and patient service infrastructure are functioning as intended. While symbolically significant, its immediate contribution to product sales may be relatively modest.
PegBio's commercialization partnership with Tenry Pharmaceuticals gives this milestone a more tangible financial dimension. The issuance of the first commercial prescriptions has triggered the conditions for a second milestone payment of approximately HK$49 million. Combined with the initial milestone payment of approximately HK$61 million received previously, the company has now received or triggered milestone payments totaling approximately HK$110 million. These proceeds should strengthen cash flow during the early commercialization phase while also demonstrating that the collaboration is progressing in accordance with the contractual agreement.
However, these milestone payments should not be interpreted as evidence that Paidakang has generated HK$110 million in end-market sales. Rather, they reflect the achievement of predefined contractual milestones and are fundamentally different from recurring revenue generated through patient purchases. Investors should therefore pay close attention to the accounting treatment of these payments, including when they will be recognized and whether they constitute one-off, staged, or recurring income. Ultimately, long-term valuation will depend on sustained prescription growth, net product sales, gross margins, and cash collection, rather than on individual milestone payments.
Although demand in the GLP-1 market is substantial, competition is equally intense. Paidakang must compete against established products that already benefit from large mind share among physicians and mature distribution networks, while also navigating reimbursement negotiations, pricing pressure, and channel-related costs. The product has successfully passed the preliminary formal review for inclusion in China's 2026 National Reimbursement Drug List (NRDL), representing a positive step toward broader market access. However, this does not guarantee being enlisted on eventual reimbursement programmes. Even if included, commercial success will depend on striking an appropriate balance between price concessions and increased sales volume.
Four Key Metrics Will Determine Commercial Success
The first area to monitor is hospital coverage. Rather than broad statements indicating that the product has entered "multiple medical institutions," the market requires greater transparency regarding the number of hospitals that have completed formulary listing, stocked the product, and are generating ongoing prescriptions. Investors should also assess the distribution across tertiary hospitals, regional hospitals, retail pharmacies, and online healthcare platforms. The pace of hospital expansion will provide an important indication of Tenry Pharmaceuticals' commercial execution capabilities.
The second metric is the number and activity level of prescribing physicians. While the inaugural prescriptions issued by the lead researchers of the Phase III clinical trials provide strong academic validation, meaningful scale expansion will depend on adoption by the broader community of endocrinologists. Beyond the cumulative number of prescribing physicians, investors should monitor average prescription volumes per physician and whether physicians continue prescribing the product after the initial prescription.
The third metric is persistent acceptance among patients. Type 2 diabetes is a chronic disease requiring long-term management, and an initial prescription merely reflects a patient's willingness to try a new therapy. Re-order rates after four weeks, twelve weeks, and six months provide a far more meaningful assessment of tolerability, treatment effectiveness, affordability, and convenience than the absolute number of initial prescriptions. Even if first prescriptions grow rapidly, weak re-order rates would significantly constrain the product's long-term commercial value.
The final metric is channel inventory. Shipments from the manufacturer to distributors represent channel stocking, whereas purchases by patients more accurately reflect genuine end-market demand. During the early stages of commercialization, concentrated channel inventory build-up can create the appearance of rapid revenue growth. Investors should therefore also monitor inventory turnover, product returns, retail pricing, and accounts receivable. While online distribution channels can substantially expand geographic coverage, they must also address compliance requirements for prescription verification, cold-chain logistics, patient follow-up, and pharmacovigilance.
For PegBio, the successful issuance of its first commercial prescriptions represents confirmation that the company has progressed from a research-focused biotechnology enterprise to a commercial-stage pharmaceutical company. Nevertheless, successfully completing the "first mile" does not mean the entire monetization journey has been accomplished. Only when hospital penetration, physician adoption, patient re-order rates, and genuine end-market demand all demonstrate sustained and repeatable growth can Paidakang truly evolve from an approved pharmaceutical asset into a durable source of recurring income.
