NEWS

1.1. In vitro diagnostics has gone through three major stages of development and is now in a period of rapid expansion.
In vitro diagnostics can be traced back to the early 19th century and has gradually matured through three major stages. The development process of IVD can be roughly divided into three stages. The first stage was in the 19th century, when the invention of the microscope enabled doctors to use chemical reagents and microbial microscopy for disease diagnosis. The second stage was from 1900 to 1950. The development of modern medicine and the discovery of enzyme-catalyzed reactions and antigen-antibody reactions laid the foundation for biochemical diagnosis and immunodiagnosis, and in vitro diagnosis gradually emerged. The third stage is from 1950 to the present. Benefiting from the accumulation of related technologies and academic research, applications such as DNA double helix structure, single antibody cloning technology, and macromolecular labeling technology have given rise to technical means such as molecular imaging, PCR, and flow cytometry. In vitro The diagnostics industry is experiencing explosive growth.
In vitro diagnostics can be mainly divided into six categories according to detection principles. According to the classification of detection principles and methods, in vitro diagnosis is mainly divided into categories such as biochemical diagnosis, immunodiagnosis, molecular diagnosis, blood and microbial diagnosis, and POCT diagnosis. Different diagnostic methods have different detection principles and technical means, and there are also large differences in application fields. At present, the three major categories of domestic in vitro diagnostic market size are immunodiagnosis, molecular diagnosis and biochemical diagnosis.
The scale of global IVD is expanding rapidly, and China’s IVD market has unlimited growth potential. In vitro diagnostics is one of the rapidly developing and active sub-industries in the medical industry in recent years. It has gradually become a mature industry with significant scale worldwide. With the increase in the incidence of chronic diseases and the improvement of medical technology and service levels, the global IVD market size is expected to reach US$91.9 billion in 2022, rapidly growing to US$133.9 billion in 2025, with a compound annual growth rate of approximately 9.9% from 2022E to 2025E. Accelerate expansion. Compared with the global market, China's IVD development time is shorter, but the market size is growing faster. According to Sullivan data, my country's in vitro diagnostic market size will be 124.3 billion yuan in 2021, with an average annual compound growth rate of 15.62% from 2016 to 2021. In the future, as the country's overall strength increases, national living standards improve, the population ages, and the government increases support for the medical field, China's in vitro diagnostics market will grow rapidly.
1.2. The industrial chain is booming, driven by the two-wheel drive of “demand + policy”
The industrial chain is complete and the upstream localization rate needs to be improved. The market share of the upstream of the in vitro diagnostic industry chain, including reagent-related biological product raw materials, fine chemical raw materials, and instrument-related software and hardware, is mostly occupied by foreign brands such as Merck and Roche. There are fewer domestic companies that master raw material technology, and the localization rate is low. . The midstream of the in vitro diagnostic industry chain is dominated by manufacturers of instruments and reagents in various subdivisions. In recent years, the number of domestic enterprises has continued to increase and has grown in size. Import substitution has been achieved in some mid- to low-end markets, but most of the market is still Monopolized by foreign brands. IVD products are sold to downstream customers such as hospitals, governments and third-party testing centers through direct sales and distribution channels. Currently, hospitals are the main group, and the end consumer groups are patients and people who need health testing.
1.2.1. Upstream of the industrial chain: The market structure is fragmented and the localization rate is low.
Focus on the research and development of core reaction system raw materials to reduce the risk of "stuck" in the upstream. In vitro diagnostic raw materials broadly include bioactive/non-bioactive materials used to prepare in vitro diagnostic reagents and components required for the development of in vitro diagnostic equipment. Among them, reagent materials refer to the reaction system raw materials used for biochemical, immunological or molecular diagnostic reagents. The quality of upstream diagnostic reagent raw materials directly determines the quality of in vitro diagnostic products. The core reaction system raw materials such as antigens, antibodies and diagnostic enzymes are in vitro diagnostic products. Diagnostic quality control is an important strategic node, and focusing on self-research and production of core reaction system raw materials will effectively reduce industrial chain risks.
The IVD raw material market is expanding rapidly, and the localization rate is expected to continue to increase. As the scale of in vitro diagnostics continues to expand, the upstream raw material market has grown from 3.3 billion yuan in 2015 to 10.7 billion yuan in 2020, with a compound growth rate of more than 20% during the period. It is expected that China's raw material market will reach 20 billion yuan in 2024. Benefiting from the continuous accumulation and innovation of technology by domestic enterprises, the proportion of domestically produced raw materials has shown a gradually increasing trend. Since IVD raw materials account for a high proportion of the cost, there is a large demand for raw materials due to the impact of the supply chain and world geopolitics. In the future, domestic companies will accelerate the R&D and production of raw materials, and the domestic substitution rate is expected to continue to increase.
The global IVD reagent raw material market is fragmented and has broad room for growth. Because reagent raw materials involve many technical paths and links, the global in vitro diagnostic reagent raw material market is characterized by numerous participants, small individual scale, and highly fragmented industries. Leading foreign companies such as HyTest, BBISolution, and Meridian, as well as leading Chinese companies The global market share of Feipeng Biotech and others is only about 5%, and a large number of small and medium-sized laboratories occupy a place in the industry by supplying several special projects. The highly fragmented market structure gives participating manufacturers ample room for growth. Large-scale reagent raw material suppliers continue to consolidate their positions in the number of routine testing projects, testing projects and overall projects, and actively create innovative projects and high-quality projects to form a comprehensive vertical and horizontal integration advantages; and small and medium-sized laboratories and small and medium-sized raw material suppliers will take a differentiated competition route by deepening the development capabilities of specialty projects.
1.2.2. Downstream of the industrial chain: Market terminal demand continues to expand
, medical expenditures increase steadily, and demand in the downstream of the industrial chain maintains a growth trend. China's medical service market is huge and growing rapidly. Total medical expenditure has grown rapidly from 4,097.46 billion yuan in 2015 to 7,684.5 billion yuan in 2021, with a compound growth rate of 9.4%. Per capita medical expenditure has increased from 3,000 yuan in 2015 to 2021. of 5,400 yuan. In recent years, the emphasis on medical and health care from the national level to the individual level has continued to deepen, and medical-related investment has continued to grow, further strengthening the rigid characteristics of demand for medical services. As one of the core elements that influence medical decision-making, in vitro diagnostics has a significant market demand expansion trend.
1.2.3. Driving factors: "market demand + policy assistance" two-wheel drive
The enrichment of conventional in vitro diagnostic projects and the discovery of innovative detection markers are the two core driving forces of the IVD market. There is a big gap between China and the United States in the number of routine in vitro diagnostic testing indicators. Referring to the "Catalogue of Clinical Testing Items of Medical Institutions" issued by the Clinical Testing Center of the National Health Commission, China's clinical testing needs are mainly about 1,100 general inspections, supplemented by more than 3,000 special inspections. The general inspection items covered by medium-level hospitals are about 300-500 items, and primary hospitals are within 100. The U.S. testing center has more than 4,000 general examination items, and the routine testing items available at the clinical level in China are one-quarter of those in the U.S. diagnostic centers. In the future, the routineization of special testing items will help increase the number of routine testing items and is an important driving factor for the expansion of in vitro diagnostics. At the same time, the rapid development of the biopharmaceutical industry requires the support of accurate drug companion diagnostic results. The research and development and detection of new biomarkers are an important source of the future in vitro diagnostics market growth. The development trend of the IVD market is improving, and the aging of the population is releasing demand for diagnosis and treatment. As an important segment in the medical device market, the IVD market has achieved rapid growth in recent years and has strong development momentum. In 2021, China's population over 65 years old has reached 200 million, accounting for 14.2% of the total population. This number is expected to increase to 22% by 2030, indicating a serious trend of population aging. The increase in the base of patients with chronic diseases brought about by the intensification of aging will significantly expand domestic demand for diagnosis and treatment, and the demand for in vitro diagnostics and related products will also be released.
Medical infrastructure and hierarchical diagnosis and treatment promote the sinking of resources and release the growth space of primary medical care. In 2009, the State Council first proposed the goal of "complete the establishment and improvement of a basic medical and health system covering urban and rural residents, and provide the public with safe, effective, convenient and affordable medical and health services." The key tasks of medical reform in 2022 still emphasize the importance of medical infrastructure, and improving the level of primary medical and health services has become a long-term goal of my country's medical reform. In 2015, the State Council put forward relevant opinions on promoting the construction of a hierarchical diagnosis and treatment system to optimize the allocation of medical resources in our country, effectively reduce the per capita medical cost, and further improve our country's grassroots health and medical system. According to the Frost & Sullivan Report, the number of primary medical and health institutions in my country has grown rapidly from 2017 to 2021. With the improvement of the medical and health system, the total number of medical patients has also shown an overall upward trend in addition to being affected by the epidemic in 2020. The improvement of medical infrastructure and the promotion of hierarchical diagnosis and treatment will further promote the sinking of medical resources, open up a vast primary medical market, and release the growth space of in vitro diagnostics.
Policies related to medical devices and IVD are gradually improved to ensure the healthy development of the industry. Starting in 2021, the country has successively updated and improved laws and regulations on the production and supervision of medical devices and in vitro diagnostics. In March 2023, the National Medical Security Administration issued rules and regulations for the coding of in vitro diagnostic reagents, marking the standardized development of my country's in vitro diagnostic market; the country has promulgated a number of policies to support the development of the field of in vitro diagnostics, and is committed to promoting the integration of the field of in vitro diagnostics. Adopt normalization. A number of favorable policies and fierce competition on the supply side will quickly promote the development of the domestic IVD market, push domestic IVD manufacturers to increase research and development efforts, actively deploy international markets and new markets such as non-public hospitals under the centralized procurement policy, develop new products, and develop new products from within. Stimulate independent innovation of enterprises and drive the development of the IVD market.
1.3. Global competition in in vitro diagnostics is fierce, and China’s market development is promising in the future
. Competition in the IVD industry is fierce, and domestic manufacturers continue to break through. In terms of manufacturers, the global IVD market is mainly controlled by the four major brands of Abbott, Roche, Danaher, and Siemens. CR4 will increase from 36% in 2020 to an expected 46.66% in 2022, and the market share will be concentrated among leading companies.
Immunodiagnosis dominates the domestic market, which is different from the global market structure. The global in vitro diagnostic segmentation projects are mainly dominated by POCT, immunodiagnosis and molecular diagnosis. It is expected that the three will account for 78% of the total projects in 2022, followed by biochemical diagnosis and microbial diagnosis. With the continuous development of new technologies, leading methodologies are constantly changing. In 1997, biochemistry and immunology were the main components of IVD, accounting for 58%, and are expected to drop to 31% in 2022. At the same time, the new crown epidemic has boosted the market share of molecular diagnosis and POCT. Increasing. Among all fields of in vitro diagnostics in China, immunodiagnostics accounts for the highest proportion, reaching 38%, followed by biochemical diagnosis and molecular diagnosis, accounting for 19% and 15% respectively, which is different from the global industry structure. Among them, immunodiagnosis has grown steadily in recent years; molecular diagnosis has grown rapidly driven by the epidemic; biochemical diagnosis has declined due to its mature development.
The European and American markets have significant leading advantages, and the Chinese market has broad room for development. In terms of regions, the United States is the largest market for in vitro diagnostics, accounting for 42% of the market share in 2022; followed by Europe, accounting for 28%. Europe and the United States benefit from the advanced technological level, strong medical awareness and high medical standards. Their development advantages in in vitro diagnostics are more obvious. Even if they are affected by the epidemic, they can still maintain a high market share and have strong resilience. As emerging market countries, China and India benefit from their population base advantages and sustained economic development. The in vitro diagnostic market is in a stage of rapid development and has broad room for future development.