The Annual Report of China IVD Industry 2021 Part I-IV Changes in upstream, midstream and downstream of the industry

4 Changes in upstream, midstream and downstream of the industry

Based on the summary of IVD-related industry analysis reports collected in 2021, we analyzed the upstream, midstream and downstream situations of the industry.

4.1    Upstream

The upstream scale of IVD was about 24 billion CNY with a growth rate of about 20%. The market share of imported brands was about 80%.

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IVD raw materials include bioactive/non-bioactive materials used for preparing IVD reagents and key components required for developing IVD equipment. Among them, the quality of reaction enzyme, antigen, antibody and core component is the core factor of the performance of IVD product, which directly affects the accuracy, specificity and stability of the product and plays a key role in the IVD industrial chain. 

With the rapid development of the IVD industry in China, the market demand for IVD raw materials (enzymes, antigens, antibodies, etc.) as the upstream of the industrial chain is increasing rapidly. The market size was 8.2 billion CNY in 2019, and it is expected to grow to 20 billion CNY in 2024 at a CAGR of 19.4%. From the perspective of market structure, the key raw materials of IVD reagents in China mainly rely on imports: in 2019, imported products accounted for 88% of the market share of the raw materials for IVD reagents. The market size of domestic products was only 1 billion CNY, but it is growing rapidly with a CAGR of 30.6% in 2015-2019.

As domestic enterprises gradually attach importance to the R&D of key technologies of raw materials and the localization of the supply chain of the biotechnology industry, it is expected that domestic products will gradually replace imported products. Domestic reagent manufacturers have reached a certain size by making great efforts to introduce, digest and absorb technology in recent years, and some manufacturers with reasonable size can meet part of the market demand. The quality of IVD products is largely determined by upstream IVD reagent raw materials. However, due to the fierce competition in the industry, some manufacturers have loosened quality control of raw materials in order to reduce production costs, which is an important factor for the uneven quality in the raw material production industry in China. 

In general, there is still a certain gap between the performance and stability of domestic products and foreign products, so the former cannot meet the needs of high-end projects. However, we can also see that some excellent domestic raw material suppliers, under the pressure of COVID-19, vigorously promote R&D, demand themselves with the highest international standard, and timely promote the replacement with domestic raw materials. The revenue of COVID-19-related antigens, antibodies, enzymes and other raw materials has increased dramatically, and many raw material manufacturers with revenue of more than 100 million have emerged. Among them, Fapon Biotech, Vazyme, Acrobiosystems, Sino Biological, Hzymes Biotech, Yeasen Biotechnology, Novoprotein, Cusabio and other companies have reached a certain market size. At present, Vazyme has been listed on the Science and Technology Innovation Board, and Acrobiosystems and Sino Biological have been listed on the GEM, with a total market value of more than 80 billion CNY. Fapon has also entered the waiting list for GEM IPO. In addition, many upstream raw material enterprises, such as Hzymes Biotech, Yeasen, Novoprotein, BiOligo, GeneMind, Bioeast, Monad, etc., have all achieved financing with a scale of more than 100 million CNY, and the accumulated financing amount is nearly 2 billion CNY.

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Next: Changes in midstream of the industry