The Evolution of China’s Biomedical Industry and its ...1 The Evolution of China’s Biomedical...
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1 The Evolution of China’s Biomedical Industry and its Global Impact Rong Hui Gao G-Med Consulting Swiss HLG Winter Conference
Transcript of The Evolution of China’s Biomedical Industry and its ...1 The Evolution of China’s Biomedical...
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The Evolution of China’s Biomedical Industry and its
Global Impact
Rong Hui Gao G-Med Consulting
Swiss HLG Winter Conference
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The Evolution of China’s Biomedical Industry
Rong Hui Gao G-Med Consulting
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Industry Evolution (Pharma Industry)
TCM
Basic OTC
Generic
API CRO
Generic
Novel drug Biologics
Cell therapy.
In line with the manufacturing and R&D capability development
1970’s 1980’s 1990’s 2000’s
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Industry Evolution (Pharma Industry)
Antibiotics
GI .
Cardio vascular
Cancer Diabetes
In line with the economic and lifestyle change and market demand
1970’s 1980’s 1990’s 2000’s
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Industry Evolution (Medtech Industry)
Basic surgical tools
Cons.
Low end Cons./
equipment
Mid range Equip/Con/
IVD
Mid/high. MRI Stent / Robot Heart v. /MDx
In line with development of manufacturing supply chain on machinery, electronic and IT
1970’s 1980’s 1990’s 2000’s
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Industry Evolution
Simple copy/
Distribution
Design Improvem
ent.
Joint Develop
ment.
Self Innovation
In line with the capability manufacturing & R&D, globalization and government policy
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A formula which is fast, scale up, but not carefully planned and specialized.
Industry Evolution
Fast growth
Over capacity
Consolidation
Integration Expand
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From small to big
But need to be fit…
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Industry Overview
(Pharma Industry)
China’s pharmaceutical
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Snapshot 2015
Total healthcare expenditure: $640 billion (5.9% of GDP) Gov. healthcare expenditure: $348 billion (54% of total) Private healthcare expenditure: $291 billion (46% of total) Total pharmaceutical sales: $108 billion ( 17% of total healthcare exp.) Generic sales: $68 billion (64% of total sales) Patented sales: $23 billion (22% of total sales) OTC sales: $16 billion (16% of total sales)
Source: US trade gov. report 2016
China’s pharmaceutical
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Market share (2015)
Growth rate
TCM
Urinary / hormone
Other
Bone / Muscle
Cancer / immune therapy
Medical solution Hemotology
Respiratory
GI / Meta CNS
CV
General antibiotics
Source: CPEA2015
Source: CPEA 2014
Industry Overview (Pharma)
Manufacturer 5,646
Chemical 2,508
TCM 2,271
Biologics 867
Quantity vs quality
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Industry Overview
(Pharma)
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权重（%）
化学药品原料制造
化学药品制剂制造
中药饮片加工
中成药制造
生物生化药品制造
卫生材料及医药用品制造
医疗仪器设备及器械制造
Output Breakdown (%)
Chemicals 26.8% TCM 21.7%
Biologics10.5% API 19.9%
Chemical API manufacturing
TCM manufacturing
Biologics manufacturing
Healthcare material
Medical device &machinery
source: ims 2014
TCM decoction pieces processing
Chemical manufacturing
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Industry Overview
(Pharma)
cancer, immune disease, drug resistance infectious disease,
diabetes, TB, hepatitis, AIDS etc.
immune therapy, gene therapy, sequencing and editing
monoclonal antibody drug, therapeutic vaccine etc. Product standard Quality assurance system Introduce advanced technology
Disease focused
Industry upgrade
Interest Tech.
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Industry Overview
(Medtech Industry)
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Industry Overview
(Medtech)
Medtech Total 16,169
Class I 3,966
Class II 9,355
Class III 2,848
Distributors: 189,833 (Class II and Class III)
Source: CFDA 2014
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Industry Overview
( Medtech )
Gross production: 70bn USD in 2016
Source: China Medical Statistics
939 1143
1399 1573
1888.6
2136.07
2382.49
0
500
1000
1500
2000
2500
3000
2009 2010 2011 2012 2013 2014 2015
unit （
RM
B10
0M）
2009-2015 Medical equipment gross production
549 686
943
1172
1398.2
1662.32
1858.94
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2009 2010 2011 2012 2013 2014 2015
unit （
RM
B10
0M）
2009-2015 Medical Consumables gross production
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First half in 2016 growth rate at 3.3% to 18.9bn USD，export 9.9bn USD，
Import 8.9bn US, growth rate 9.87%
Source：CCCMHPIE
0
25
50
75
100
125
150
175
200
225
250
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20152016上半年
100m (USD
2002-2016 Import & Export
進口額
出口額
順差
Imp Exp
1st half
Sup
Industry Overview ( Medtech )
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Market Trend By product
• Heavy ion and proton accelerators • Plasma treatment equipment • X-ray linear accelerator therapy equipment • The new generation of interventional products • Minimally invasive treatment technology products • POCT technology • Hyperthermia equipment • Dialysis equipment and consumables • High end CT and MRI, PET-CT and PET-MR • Digital X-ray • High-end ultrasound machine
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Industry Overview
( Medtech )
Manuf. General Dis.
Regional dis. Sub R dis Hospital
Logis. Regional dis Sub R dis
Regional dis Sub R dis
Sub R dis
Import Service
wi
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Two Invoice system
Manufacturer Hospital
Distributor
Distribution will be streamlined and transparent
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Industry Overview
Healthcare
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Healthcare
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Healthcare
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Healthcare
Fact Sheets
• 260m people with
major disease.
• 80m disabled
• 202m over 60 yr
China’s healthcare system is challenged by increasing demand and
expensive medical treatment and imbalanced medical resources
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Cancer Prevalence China
Morbidity and mortality
Mortality Morbidity
Lung cancer
Cerrvical Pancreas
Thyroid Lymph Bladder
Brain&Spine
Breast Colon
Stomach
Esophagus
Liver
Source: NHFBC
Major Disease in China: Cancer
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Major Disease in China: Cancer
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More Target Therapy Cancer Drugs in China Top 20 anti cancer drug 2005-2015
2015 2010 2005
Opportunities vs. Challenges
Opportunities Challenges
ü Increasing aging population ü Primary care demand ü Increasing healthcare expenditure ü Strong financial resources
ü Pricing and cost reduction pressure ü Regulatory process ü Low global presence ü IP protection improved but not perfect
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Global Impact
An increasing important role,
but not a leading role yet
Rong Hui Gao G-Med Consulting
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Global Impact
Rong Hui Gao G-Med Consulting
Major investment goes to commodity and infrastructure
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Global Impact
Source: IMS
China-Europe biomedical trade
84.17 99.98 128.38
145.27 164.48
188.06
251.9
307.85 342.39
381.32
0
50
100
150
200
250
300
350
400
450
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Bn
USD
China-Europe healthcare import and export trade rose from 8.417b USD in 2005 to 38.132b USD in 2014, an increase of five times, and CAGR of 16.5%
Source: CCCMPHC 33
98.27
32.37 32.29 30.46 28.91 27.74 21.5 19.18 15.34 13.85 13.47 11.09
6.7 6.28 3.99
0
20
40
60
80
100
120
德国 DE
意大利 IT
法国 FR
英国 UK
瑞士 CH
荷兰 NL
爱尔兰 IE
比利时 BE
西班牙 ES
瑞典 SE
丹麦 DK
俄罗斯 RU
奥地利 AT
挪威 NO
芬兰 FI
In 2014, China-Europe healthcare trade volume increased by 11.37%, about 40% of the total. China’s export volume was 14.488 billion USD, up by 6.36%. China’s import volume was 23.644 billion
USD, up by 14.67%.
China-Europe biomedical trade
Source: CCCMPHC 34
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International Transactions in 2016
Company Target Deal process Deal size (mUSD)
Fosun Gland Pharma
Ltd. In Process 1,300
San Power Valeant Pharma Completed 820
Humanwell Healthcare Pharma&RE Completed 600
Dongcheng Pharma GMS (BVI) Completed 70 InnovaMon Medical PSTI In process 30m Xilong ScienMfic Fulgent In process 25m Hasico Pharm RegenMs In process 8m
Global Impact
Source: CPEA2016
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Fact sheets
• 90 companies involved in transactions 2016 • 110 deals (completed and process) 2016 • About 300 listed biomedical companies • 780 gov.backed VCs with 231bn USD fund • 1600 incubators nationwide
Global Impact
More and bigger deals to come…
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Chinese investors’ major interests
• Products with great market potential in china
• Match the company portfolio
• Already approved or clinical stage in US/Europe
• Market right in China
Global Impact
Licensing and acquisition
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Sino – Euro BioMedical Centre
Located in the heart of healthcare and life science hub
Hospital
• Fudan University ÌZhongshan
Hospital ÌCancer Hospital
ÌPediatric Hospital ÌENT Hospital
• Shanghai Jiao Tong University
ÌChest Hospital ÌIPMC Hospital
ÌGeneral Hospital of Psychiatry
ÌSixth People's Hospital
• Shanghai University of
Traditional Chinese Medicine
ÌLonghua Hospital
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Sino – Euro BioMedical Centre
Transaction and soft landing platform for European SMEs
