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    Home > Chemial News > Cosmetics Industry News > The golden track of cosmetics-hyaluronic acid

    The golden track of cosmetics-hyaluronic acid

    Echemi 2020-08-07

    The scientific name of hyaluronic acid is hyaluronic acid (HA). It is a natural linear polysaccharide that exists in human and animal tissues. The symptoms of skin aging, joint degeneration, arteriosclerosis, and presbyopia are closely related to the gradual decrease of hyaluronic acid in the body.

    Different from some hotspot industries in the current market, domestic companies are more competitive in the hyaluronic acid raw material market. In 2018, China's total sales of hyaluronic acid raw materials accounted for 86% of total global sales. The top 5 suppliers of global hyaluronic acid raw materials sales are all Chinese companies, and the market concentration is high.

    With the increase in national income and the expansion of application areas, the industry's most profitable pharmaceutical-grade hyaluronic acid terminal product application areas-medical cosmetology, orthopedic treatment and ophthalmology treatment have maintained rapid growth.

    With the rapid growth of the overall market, industry leaders with better technology and more qualifications will have higher competitiveness, and leaders in segmented fields deserve attention.



    What exactly does hyaluronic acid do?

    The scientific name of hyaluronic acid is hyaluronic acid (HA), which is a natural linear polysaccharide found in human and animal tissues. As the main component of extracellular matrix, the human body is mainly distributed in the vitreous body, joints, umbilical cord, skin and other parts of the human body, and plays important physiological functions.

    Hyaluronic acid is an irreplaceable natural substance in the human body. The content of hyaluronic acid is the highest in the body during the embryonic period, and gradually decreases with age. Symptoms such as skin aging, joint degeneration, arteriosclerosis, and presbyopia are closely related to the gradual decrease of hyaluronic acid in the body.

    Hyaluronic acid has good water retention, lubricity, viscoelasticity, biodegradability and biocompatibility and other physical and chemical properties and biological functions. It is used in medical orthopedics, ophthalmology, general surgery, urology, gastroenterology, otolaryngology, oral cavity It is widely used in the fields of medicine, plastic surgery, dermatology, cosmetics and functional food.




    What technology is used to extract hyaluronic acid? How about industry barriers?

    Before the 1990s, hyaluronic acid was mainly produced by animal tissue extraction methods (such as cockscomb, umbilical cord), which had limited sources of raw materials, complicated separation and purification processes, low yields, low product quality, high production costs, and very high production capacity. limited. The raw material products are mainly pharmaceutical grade, only a small amount of products are used for ophthalmic surgery, and the price is very expensive, and the application is greatly restricted.

    At present, the main domestic production of hyaluronic acid is by biological fermentation. Compared with the extraction method, the production scale is rapidly expanded, the quality is significantly improved, and the production cost is significantly reduced. The raw materials of the fermentation medium include peptone, yeast powder, glucose and so on.

    Hyaluronic acid can be divided into pharmaceutical grade, cosmetic grade and food grade according to its use and technical requirements. There are three barriers in the industry competition of "qualification, technology, channels & production capacity", which are difficult for new players to overcome.

    In terms of qualifications, on the basis of obtaining environmental protection qualifications, pharmaceutical-grade hyaluronic acid raw materials manufacturers also need drug production licenses, GMP certifications, and drug approval numbers. The overall process takes 2-5 years. Food-grade raw materials also require a food production license.

    In terms of technology, the fermentation method has the advantages of easier purification and lower cost than the extraction method, and the yield and purity control techniques in the fermentation technology have become the key to competition. Biological method has the advantages of not destroying chemical structure compared with chemical method and physical method. In biological method, the fermentation preparation enzymatic method is better than the extraction preparation enzymatic method, and only a few companies currently master it.

    In terms of channels, pharmaceutical-grade raw materials are the most sticky to suppliers. During drug registration, upstream raw materials and downstream preparation companies are associated with approval, and the cost of replacing suppliers is high. For large food-grade cosmetics manufacturers, there are strict screening and evaluation mechanisms for supplier selection, and suppliers will not be easily changed.


    Is Hyaluronic Acid the "Golden Track"?

    With the continuous breakthroughs in bio-fermentation technology and the continuous maturity of cross-linking technology, products and services using hyaluronic acid as raw materials have shown a highly heated trend in recent years, and the raw material market has been growing rapidly in recent years. Industry leaders with better technology and more qualifications have higher competitiveness, and it is difficult for small companies to survive.

    The Frost & Sullivan report shows that the global hyaluronic acid raw material market sales reached 500 tons in 2018, with a compound growth rate of 22.8% from 2014 to 18, and it is expected that the global market sales in 2023 can reach 1,150 tons.

    In terms of specific segments, the sales of cosmetic-grade hyaluronic acid raw materials will dominate in 2014-18, with a compound growth rate of 18%. Hyaluronic acid is the main moisturizing function in cosmetic raw materials to meet the skin's moisturizing needs in different environments and time.

    After 18 years, food-grade hyaluronic acid will grow rapidly, and the market is expected to achieve a high growth rate of 23.3% in 18-23 compound growth rate. As a food material, hyaluronic acid mostly functions to improve skin moisture and increase bone density.

    Pharmaceutical grade hyaluronic acid is the most valuable product among the raw materials of hyaluronic acid. The compound growth rate of pharmaceutical grade sales from 14 to 18 years is 22.1%, and the compound growth rate is expected to be 15.6% in the next 18-23 years, and the related growth rate is stable.

    In terms of unit price, the price of hyaluronic acid for different purposes varies greatly. Huaxi Biotech’s prospectus shows that the price of the company’s eye drops grade hyaluronic acid in 2019Q1 is 17,000 yuan/kg, injection hyaluronic acid exceeds 100,000 yuan/kg, and cosmetic-grade and food-grade hyaluronic acid raw materials are relatively low in price, with prices of 2226 yuan/kg respectively. And 1370 yuan/kg.

    It should be noted that pharmaceutical grade hyaluronic acid uses a small amount (4% of total sales), but the price is much higher than other grades (almost 50 times that of cosmetic grades), and it accounts for half of the industry's sales due to its high added value.

    The hyaluronic acid industry is a high-margin industry, and the pharmaceutical grade has a higher gross profit margin than the cosmetic grade and food grade. According to Huaxi Biology, the gross profit margin of the company's eye drops is around 88%, injection grade is around 90%, cosmetics grade is stable above 70%, and food grade gross profit margin is 53.4%.

    However, the domestic market for high-priced medical-grade hyaluronic acid is relatively small. In 2018, China's pharmaceutical-grade hyaluronic acid products accounted for only 2.3%, which is far below the 14.3% level of other countries, accounting for about 1/6 of the global output. , There is huge room for improvement.



    Are domestic companies competitive?

    Different from some hotspot industries in the current market, domestic companies are more competitive in the hyaluronic acid raw material market. In 2018, China's total sales of hyaluronic acid raw materials accounted for 86% of total global sales. The top 5 suppliers of global hyaluronic acid raw materials sales are all Chinese companies, and the market concentration is high.

    The main competitive advantage of Chinese hyaluronic acid companies lies in cost. According to Huaxi Biotech's prospectus, the average price of pharmaceutical-grade and other-grade hyaluronic acid raw materials exported by Chinese companies in 2018 was almost half of the average export price of overseas companies.

    Due to the continuous increase in terminal demand and market penetration, as well as the continuous expansion of penetration applications, the domestic hyaluronic acid raw material market has reached 3.07 billion yuan in 2018, and it continues to rise at a rate of over 15% per year.

    In terms of the terminal market, with the increase in national income and the expansion of application areas, the industry's most profitable pharmaceutical-grade hyaluronic acid terminal product application areas-medical cosmetology, orthopedics treatment and ophthalmology treatment have maintained rapid growth.

    In 2018, the overall scale of China's pharmaceutical-grade hyaluronic acid terminal products was close to 7 billion yuan, with a compound growth rate of 17.4% from 2014 to 18; the scale of the medical aesthetics market was larger than other application fields, reaching 3.7 billion yuan in 2018 and the growth rate was higher than other fields. The compound growth rate from 2014 to 18 is 32.3%.

    In 2017, the number of Chinese medical beauty consumers reached 14.1 million, maintaining a compound annual growth rate of 27.3%. At present, China's medical and aesthetic consumer groups with strong economic capacity and high spending power have not fully released the demand for China over the age of 35. It is estimated that by 2022, the number of Chinese medical aesthetic consumers will exceed 30 million.

    In the field of bone treatment, the market size of injection drugs for treating osteoarthritis reached 9.82 billion yuan in 2018. Since hyaluronic acid injection can protect damaged cartilage and have fewer adverse reactions, its market has maintained steady growth, with a compound growth rate of 0.6% from 14 to 18 years (the overall market tends to decline due to government supervision), showing a good market prospect.

    In terms of ophthalmology, the market size of HA products for ophthalmology treatment exceeded 1.6 billion yuan in 2018. Ophthalmic viscoelastics are mainly used for cataract surgery. According to the statistics of the Ophthalmology Branch of the Chinese Medical Association, the incidence of cataracts in the population of 60-89 years old in China is about 80%. At present, the population over 60 years old in China has reached 250 million, and the incidence is estimated at 80%. , The number of cataract patients has reached 200 million, and surgery is currently the only way to treat cataracts.

    In cosmetics, hyaluronic acid was previously only used in higher-end cosmetics. However, with continuous technological breakthroughs, the difficulty and cost of extracting and processing hyaluronic acid have declined. Hyaluronic acid has been gradually added to low-end products, and the scope of application has continued to expand. . Market forecasts believe that with the gradual expansion of the high-end and luxury goods market, coupled with the full price band application of hyaluronic acid raw materials, it is expected that the terminal demand for hyaluronic acid cosmetics will continue to increase in the future.

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