SHANGHAI (Reuters) - Novo Nordisk is facing the prospect of intensifying competition in the promising Chinese market where drugmakers are developing at least 15 generic versions of its diabetes drug Ozempic and weight loss treatment Wegovy, clinical trial records showed.

The Danish drugmaker has high hopes that demand for its blockbuster drugs will surge in China, which is estimated to have the world's highest number of people who are overweight or obese.

Ozempic won approval from China in 2021 and Novo Nordisk saw sales of the drug in the greater China region double to 4.8 billion Danish Krone ($698 million) last year. It is expecting Wegovy to be approved this year.

But the patent on semaglutide, the active ingredient in both Wegovy and Ozempic, expires in China in 2026. Novo is also in the midst of a legal fight in the country over the patent.

An adverse court ruling could make it lose its semaglutide exclusivity even sooner and turn China into the first major market where it is stripped of patent protection for the drugs.

Those circumstances have drawn several Chinese drugmakers to the fray. At least 11 semaglutide drug candidates from Chinese firms are in the final stages of clinical trials, according to records in a clinical trial database reviewed by Reuters.

"Ozempic has witnessed unprecedented success in mainland China ... and with patent expiry so close, Chinese drugmakers are looking to capitalise (on) this segment as soon as possible," said Karan Verma, a healthcare research and data analyst at information services provider Clarivate.

Front-runner Hangzhou Jiuyuan Gene Engineering has already developed one treatment that it says has "similar clinical efficacy and safety" as Ozempic and applied for approval for sale in April. The company has not published efficacy data and did not respond to a request for the information.

The company said in January that it expected approval in the second half of 2025, but cautioned that it will not be able to commercialise the drug before Novo's patent expires in 2026, unless a Chinese court makes a final ruling that the patent is invalid.

The Danish company's semaglutide patent is expiring in China far ahead of its expiry in other key markets such as Japan, Europe and the U.S. Analysts attribute variations in patent expiry timelines to term extensions Novo has won in specific regions.

Even more pressing for Novo is a 2022 ruling by China's patent office that the patent is invalid for reasons related to experimental data availability, which the company has challenged.

China's top court said it was not able to say when verdicts are likely ready.

A Novo spokesperson said it "welcomes healthy competition" and was awaiting a court decision on its patent case. The spokesperson did not answer follow-up queries on the matter.

Other Chinese drugmakers who are running the final stages of clinical trials for Ozempic generics include United Laboratories ( ULIHF ), CSPC Pharmaceutical Group ( CHJTF ), Huadong Medicine and a subsidiary of Sihuan Pharmaceutical Holdings Group ( SHPHF ).

CSPC said in May it expected approval for its semaglutide diabetes drug in 2026.

Brokerage Jefferies estimated in an October report that semaglutide drugs from United Laboratories ( ULIHF ) will be launched for diabetes in 2025 and obesity in 2027. United Laboratories ( ULIHF ) did not respond to a request for comment.

IMPACT ON PRICES

The number of adults who are overweight or obese in China is projected to reach 540 million and 150 million, respectively, in 2030, up 2.8 and 7.5 times from 2000 levels, according to a 2020 study by Chinese public health researchers.

If shown to be as safe and effective as Novo's, Chinese drugmakers' products will increase competition and bring down prices, analysts say.

Goldman Sachs analysts estimated in an August report that generics could lead to a price reduction of around 25% for semaglutide in China. The weekly Ozempic injection costs around $100 for each 3mL dose through China's public hospital network, Clarivate's Verma said.

Novo acknowledges the intensifying competition.

"In 2026 and 2027 we might see a few more players showing up due to the clinical trials" in progress, Maziar Mike Doustdar, a Novo executive vice president, told investors in March, referring to the China market.

But he also questioned the capability of some of the players to provide meaningful volumes, adding "we will watch it as we get closer".

Novo also faces competition from internationally well known firms including Eli Lilly ( LLY ) whose diabetes drug Mounjaro received approval from China in May. HSBC analysts expect China's approval this year or in the first half of 2025 for Lilly's weight loss drug with the same active ingredient.

Eli Lilly ( LLY ) did not reply to a request for a comment on Chinese approval of the drug, which in the U.S. is called Zepbound.

Supplies of both Wegovy and Zepbound remain constrained but the companies have been increasing production.

Zuo Ya-Jun, general manager of weight loss drugmaker Shanghai Benemae Pharmaceutical, said a product being competitive would depend on distinguishing features such as efficacy, durability of the treatment and a company's sales abilities.

"It will be a market with fierce competition, but who will be (the leader) is hard to say," she said.