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2023
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Biopharmaceutical planning is coming your way.
With news that the 12th Five-Year Plan for the pharmaceutical industry is about to be released, the biopharmaceutical sector has shown exceptionally strong performance
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With news that the 12th Five-Year Plan for the pharmaceutical industry is about to be released, the biopharmaceutical sector has shown exceptionally strong performance, frequently outpacing other sectors and demonstrating a trend of rising against the market’s overall downward momentum—a development that has added considerable vibrancy to an otherwise adjusting market.
From the perspective of market news, a relevant official from the Consumer Goods Division of China’s Ministry of Industry and Information Technology revealed at the 2011 China Pharmaceutical Retail Industry Information Conference on August 19 that the “12th Five-Year Plan for the Pharmaceutical Industry” is expected to be officially released in September. The key areas of technological innovation mentioned above include biopharmaceuticals, modern Chinese medicines, advanced medical devices, novel pharmaceutical excipients, pharmaceutical equipment, and packaging materials. Meanwhile, a series of supporting policies aligned with the 12th Five-Year Plan are also expected to be rolled out one after another. As a result, the biopharmaceutical industry is entering a period of policy-driven benefits, and as a consequence, this sector has attracted increased attention from investors.
From an industry perspective, the biopharmaceutical sector is one of the key sub-sectors within the broader bio-industry. In recent years, the pharmaceutical industry has placed unprecedented emphasis on technological advancement and innovation. Looking at the rapidly growing market for monoclonal antibody drugs, the global market reached US$44 billion in 2010, with a compound annual growth rate (CAGR) of 40% from 2000 to 2010—far exceeding the 21% CAGR of the biopharmaceutical sector during the same period. Moreover, five blockbuster drugs with sales exceeding US$5 billion have emerged, and the momentum behind monoclonal antibody development is simply unstoppable. Currently, nearly all major pharmaceutical companies have monoclonal antibody research and development programs underway. Examining the historical development of monoclonal antibody drugs worldwide, we find that China’s monoclonal antibody industry shares many similarities with the global industry. China is now at the very beginning of a major boom in monoclonal antibody development and is poised to enter a golden two-decade period of rapid growth. The time is ripe for companies to strategically position themselves in this burgeoning industry. At present, monoclonal antibodies account for only a small share of China’s cancer and rheumatoid arthritis drug markets, leaving vast room for growth. Globally, monoclonal antibodies currently account for about 17% of the cancer drug market; in Europe and the U.S., their share in rheumatoid arthritis treatments reaches around 50%. By contrast, China’s overall monoclonal antibody market size stands at roughly just over 1 billion yuan—about 1/40th of the total Chinese cancer drug market. Given factors such as the rising incidence of cancer in China and the large number of patients suffering from rheumatoid arthritis, we believe that China’s monoclonal antibody market has enormous growth potential and boasts a promising outlook. Furthermore, monoclonal antibody products have already been included in the medical insurance systems of multiple provinces, and it is highly anticipated that they will soon be covered by national medical insurance as well. The massive market for monoclonal antibodies is about to open up. Although foreign companies still dominate the Chinese market, in the next 2 to 10 years, several blockbuster monoclonal antibodies sold globally by foreign firms will enter the post-patent period, presenting domestic companies with exceptional growth opportunities. Meanwhile, it is reported that domestically, companies such as Baitai Bio and CITIC Guojian have already begun exporting their monoclonal antibody products, thus opening up new markets for Chinese monoclonal antibody drugs. In the future, China’s monoclonal antibody industry is expected to gain entry into international standardized markets, achieving dual-wheel-driven growth both domestically and internationally.
From an investment perspective, given the promising outlook for biopharmaceuticals and the currently relatively low valuations across the pharmaceutical sector, investors might want to pay closer attention to pharmaceutical stocks such as Jincheng Pharmaceutical, Zuoli Pharmaceutical, Sinovate, Lansheng Shares, Haizheng Pharmaceutical, Lizhu Group, and Yiyi Pharmaceutical.
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