Life science reagents - Strong demand for research and development, industry favorable policies continue

Biological research reagents mainly include molecular, protein and cellular reagents. Molecular reagents are mainly nucleic acid reagents, which are mainly used in nucleic acid-related experiments such as PCR amplification and DNA sequencing involving various tool enzymes, substrates, etc. In recent years, the development of new fields such as nucleic acid drugs, cellular gene therapy and PROTAC has given nucleic acid reagents new application scenarios. Protein reagents mainly refer to the types of reagents needed for experiments around protein macromolecules, including recombinant protein reagents and antibody reagents, etc. Cell-based reagents mainly refer to the reagents used in experiments around in vitro cells, including specific cells and products or kits for cell culture, transfection, apoptosis detection, lysis of cells, etc.

The market size of biological research reagents is growing rapidly, with China growing significantly faster than the world. Globally, the overall size of the bioscience research reagents market is expected to grow from RMB 83.2 billion in 2015 to RMB 159.9 billion in 2024, with a CAGR of 7.5%. Compared with foreign countries, China's bioscience research reagents industry is late in development, but has maintained a high growth rate in recent years. The market size of biological research reagents industry is growing rapidly, and the growth rate of China is significantly faster than the global market. Globally, the overall size of the bioscience research reagents market is expected to grow from RMB 83.2 billion in 2015 to RMB 176.8 billion in 2025, with a CAGR of 7.8%. Compared with foreign countries, China's bioscience research reagents industry is late in development, but has maintained a high growth rate in recent years.

From the viewpoint of customer type, the research reagents are mainly for scientific research institution customers. The customer group of bioreagent research market includes industrial research customers and research institution customers, among which research institution customers are widely distributed and the purchase amount of individual customers is small, but due to the large number, they still occupy a dominant position in the bioreagent research market after convergence and have a significant "long tail effect". According to Frost & Sullivan statistics, in 2020, research institutions account for 61.6% of the global bioreagent research market, and 67.3% in the Chinese market. Research reagents from the various segments of the industry, China's industry concentration is not high enough. From the historical data of recombinant proteins, antibodies and molecules, China's CR5 does not exceed 50%, and the concentration of the industry is low; the market share of Chinese domestic enterprises, especially Chinese head enterprises, is less than 10%. With the recent policy support and the improvement of Chinese enterprises' research ability, product quality and business level, Chinese domestic biological research reagents are expected to enhance market competitiveness through the advantages of price, supply chain and service, and gradually break the industry situation dominated by imported products and form import substitution.

China on the life science reagent companies in recent years, the epidemic and other multiple factors to accelerate the replacement process of domestic products in China.

Since the epidemic in 2020, on the one hand, due to the investment boom in the primary and secondary markets and the urgent need for transformation of pharmaceutical companies for innovation under the collection has driven the booming development of China's biopharmaceutical industry, the rapid increase in research and development projects and the promotion of the original project has led to the rapid development of the upstream life science industry. On the other hand, the sales of COVID-19 diagnostics, drugs, vaccines and other related products under the epidemic brought explosive growth in revenue for life science reagents and raw materials related companies. In 2021 and 2022Q1, although some pharmaceutical companies have seen a downward trend in COVID-19-related revenues, but corporate awareness and access to customers will allow companies to continue to benefit. Previously, due to the late start of China's biopharmaceutical industry, the life science reagent industry previously had a limited market size, and the industry as a whole was still in a competitive pattern dominated by imported products.

After the COVID-19 epidemic, due to the surge in demand for biopharmaceutical R&D and production as well as poor overseas supply chains, Chinese companies gained access to the R&D and production end of Chinese customers, and took the opportunity to further optimize their products and deepen their relationships with customers by virtue of timely response time and good service. At the same time, the recent supply chain autonomy and safety issues have attracted the attention of most Chinese biopharmaceutical companies, and Chinese domestic products have obvious advantages in terms of supply stability and speed of supply. In addition, under the pressure of medical insurance cost control, Chinese pharmaceutical companies have the demand for cost reduction, and Chinese domestic products can further accelerate the process of Chinese domestic substitution by virtue of higher cost performance.