The three-child policy has been fully liberalized, the "Human Assisted Reproductive Technology Application Plan (2021-2025)" has been released, and the number of infertility patients has exceeded 50 million... A number of positive factors have made the assisted reproduction industry usher in a warm spring in 2021.
In the primary market, the financing performance of the assisted reproduction industry in 2021 is eye-catching, with Weituo Bio completing a series C financing of 100 million yuan, and Nüwa Life completing two rounds of financing in succession within 5 months after its establishment. In the secondary market, after the release of heavy policies such as the three-child policy, a number of assisted reproduction concept stocks such as Becon Medical and Jinxin Reproduction have received attention. It has to be said that the assisted reproduction industry has been pushed to a new historical height in 2021.
Arterial Network believes that 2021 is the peak of the development of the assisted reproduction industry, but it is by no means the peak. With the completion of the transition period of population policy, the rapid landing of the "Human Assisted Reproductive Technology Application Plan (2021-2025)", the acceleration of domestic substitution of upstream medical devices, and the development of assisted reproduction in 2022 is more worthy of attention.
Encourage fertility policies to increase,
The assisted reproduction track is hot
Policy has always been one of the main factors affecting the development of the assisted reproduction industry. Compared with previous years, the positive significance provided by assisted reproduction-related policies to the development of the industry in 2021 is unprecedented.
In January 2021, the "Human Assisted Reproductive Technology Application Plan (2021-2025)" was issued, requiring that the number of assisted reproductive institutions providing "artificial insemination technology, artificial insemination of fertilization, in vitro fertilization - embryo child transplantation, intracytoplasmic sperm microinjection technology" should not exceed 15% of the total number of institutions by the end of 2020, and in principle, according to the number of permanent residents, 1 assisted reproductive institution can be set up for every 2.3 million to 3 million people The human sperm bank setting does not exceed 1 per province (autonomous region, city) in principle.
This means that there will be more than 600 assisted reproduction institutions in the next stage of the mainland, promoting the expansion of the entire assisted reproduction market, meeting more clinical needs for assisted reproduction, and bringing increments to the upstream device and drug markets.
The full liberalization of the "three-child" policy at the end of May 2021 has added another dry firewood to the enthusiasm of the assisted reproduction industry.
In May 2021, the seventh census data was released, and the number of newborns in China in 2020 showed a cliff-like decline, down 2.65 million from 2019, with only 12 million newborns. According to the latest data from the 2021 China National Statistical Yearbook, China's birth rate in 2020 was only 0.852%, falling below 1% for the first time, and the natural population growth rate (birth rate- mortality rate) also fell to 0.145%. On the other hand, the number of infertility in the mainland has exceeded 50 million. Experts predict that the era of negative growth in Chinese may come ahead of schedule.
The number of infertility has risen, the birth rate has declined, and the population situation has become more and more severe, the CPC Central Committee and the State Council issued the "Decision on Optimizing The Birth Policy to Promote the Long-term Balanced Development of the Population", making major decisions on the implementation of the three-child birth policy and supporting measures, trying to reverse this situation, and the related assisted reproduction industry has once again been pushed into the spotlight. As soon as the "three-child" policy news came out, the stock of assisted reproduction companies rose sharply, and Becon Medical, which had a market share of up to 70% in the industry, rose by 15% on the same day, and the market value reached 7.7 billion Hong Kong dollars.
Assisted reproduction is the main means for domestic doctors to treat infertility (Source: 2021 Assisted Reproduction Industry Research Report)
Encouraging fertility has become the main goal of China in the long term in the future, and the strong development momentum of the assisted reproduction industry will continue due to the impact of policies. According to the prediction and calculation of the "2021 Assisted Reproduction Industry Research Report" of the Eggshell Research Institute, the market demand for IVF is 421.2 billion yuan, the market demand for artificial insemination is 12.9 billion yuan, and the market demand for assisted reproduction has reached 434.1 billion yuan.
The "14th Five-Year Plan for the Development of the Medical Equipment Industry" issued at the end of December 2021 focuses on 7 key areas such as maternal and child health equipment, emphasizing that from 2021 onwards, we must attach great importance to the development of the medical equipment industry and accelerate the completion of the shortcomings of high-end medical equipment in the mainland.
The introduction of this policy has allowed more people to shift their attention from the downstream of assisted reproduction to the upstream medical device track where domestic substitution needs are urgent. Upstream domestic medical devices are also recognized as one of the new growth points in the field of assisted reproduction in 2022.
95% of high-value consumables are monopolized,
It is time to replace domestic equipment in the upstream
The "14th Five-Year Plan" Medical Equipment Industry Development Plan proposes that it will strengthen the original leading medical equipment research, and by 2035, the research and development, manufacturing and application of medical equipment will be upgraded to the world's advanced level, and the mainland will enter the forefront of innovative countries in medical equipment.
In addition, in 2021, the "Guiding Opinions on Promoting the Healthy Development of the Pharmaceutical Industry" issued by the General Office of the State Council also clearly stated that if domestic drugs and medical devices can meet the requirements, government procurement projects must in principle purchase domestic products, and gradually improve the allocation level of domestic equipment in public medical institutions. Dozens of provinces, municipalities and autonomous regions such as Guangdong, Shaanxi, Shandong, Shanghai, Fujian, and Jiangsu have clearly proposed in their government procurement policies to strictly restrict the import of medical devices and support domestic products.
It can be seen that under the multiple pressures of national collection, the impact of the epidemic, and the decline of the biomedical market, the domestic substitution of medical devices has become a new breakthrough.
The upstream of the assisted reproductive industry chain is the device, drug and technology developer, the middle stream is the device, drug distribution and marketing channel provider, and the downstream is the assisted reproductive medical service provider.
In the upstream of assisted reproduction, due to the late start of the industry, strict approval supervision, weak technology accumulation, PGT (preimplantation genetic testing) reagents, embryo freezing/thawing solution, embryo culture liquid and other high-value consumables used in the IVF treatment process, as well as the phenomenon of downregulation, ovulation induction, ovulation induction, and luteal support drugs relying heavily on imported brands, accounting for higher costs, 95% of the high-value consumables and 80% of the drugs in the assisted reproduction industry are monopolized by foreign brands. It has become the main focus of domestic substitution in the medical field.
Schematic diagram of the domestic substitution status of medical devices
(Source: 2021 Assisted Reproduction Industry Research Report)
The demand for assisted reproduction in the downstream is constantly improving, and the domestic replacement of upstream medical devices and drugs is imminent.
It is gratifying that the domestic replacement speed of assisted reproductive upstream medical devices will be significantly accelerated in 2021. According to the statistics of the arterial network, there are currently more than 70 approved assisted reproductive medical devices in China, and a total of 27 assisted reproductive medical device products approved in 2021 alone, accounting for 40%.
Among them, high-value consumables such as PGT reagents, freezing/thawing solution, and embryo culture solutions are the core of domestic substitution of upstream medical devices for assisted reproduction.
PGT is mainly used for embryo screening, using PGT reagents and supporting sequencers to analyze the genetic diseases of DNA samples of preimplantation embryos, determine whether embryos carry genetic diseases, and screen out healthy embryos for transfer, including PGT-A/aneuploidy preimplantation genetic examination, PGT-SR/structural abnormalities preimplantation genetic examination and PGT-M/single gene genetic disease preimplantation genetic examination supporting reagents. In 2020, the domestic PGT market size was 2.16 billion yuan, of which the PGT-A market accounted for 56%, mainly because the screening is applicable to a wide range of people, and the number of IVF cycles using PGT-A in 2020 exceeded 500,000.
Comparison of the three major screening types of PGT
In 2020, Becon Medical's PGT-A kit was approved for listing, which is the first domestic PGT-A kit approved for listing, filling the domestic gap. In 2021, products such as freezing/thawing solutions and a second PGT-A kit were also approved.
Becon Medical's PGT-M, PGT-SR research and development progress is also ahead of the domestic, PGT-M kit is expected to be listed in 2022, PGT-SR kit is expected to be listed in 2024, sustainable consolidation of Becon Medical's position in the third-generation test tube test. At the same time, innovative products such as ultra-low temperature storage instrument and intelligent lossless sperm quality analyzer are also under development, which will lead the wave of domestic alternatives to assisted reproductive upstream medical devices.
In the past two years, PGT-A kits, freezing/thawing solutions, embryo culture solutions and other high-barrier products have been approved one after another, proving that China has the strength of domestic substitution. A number of assisted reproductive device enterprises with independent research and development capabilities, such as Becon Medical, Weituo Biological, and Aiweifu, will accelerate the upstream domestic substitution process and further expand the market scale of assisted reproductive medical devices.
According to the "2021 Assisted Reproduction Industry Research Report", the market size of IVF medical devices is expected to exceed 24 billion yuan in 2023, which will be 1.5 times the market size in 2020.
2021 is the beginning,
The climax of assisted reproduction development has not yet arrived
Under the influence of a number of policies to encourage fertility, the advent of domestic alternatives, and the decline in the birth rate of the population to less than 1%, the number of infertility exceeded 50 million, and other data, it is normal for assisted reproduction to usher in an outbreak in 2021.
However, in the view of arterial network, it is more appropriate to regard 2021 as the beginning of the golden era of development of the assisted reproductive industry.
Data released by the National Bureau of Statistics on January 17 showed that the total population of the country at the end of 2021 increased by 480,000 compared with the end of 2020. On January 20, 2022, the National Health Commission held a press conference to introduce the progress and experience of implementing the Decision on Optimizing Fertility Policies and Promoting Long-term Balanced Development of the Population.
Under the downward trend of the birth population, with the completion of the transition period of the population policy, the effect is revealed, and a number of favorable policies are effectively implemented, and the climax of the development of the field of assisted reproduction will truly come. The demographic situation has become a key focus of the country, and I believe that this day will not be too far away.
In 2022, operation management, channel management, and service capacity improvement will be the top priority of downstream assisted reproduction institutions, and localization will become the mainstream of the development of large medical industries, and promoting "independent innovation" and "localization" will be the key to the competition of upstream medical devices and pharmaceutical companies in assisted reproduction. In the future, the next round of flashpoints in the industry and the birth of leading enterprises must be closely related to the trend of domestic substitution.
As the backbone of promoting the domestic substitution of assisted reproductive upstream medical devices, Becon Medical has carried out a complete product line layout around reproductive, obstetrics and gynecology, and andrology, covering the key stages of the entire reproductive cycle.
Becon Medical spent more than 4 years to cross the high threshold of PGT reagent clinical trials, and its PGT-A kit was the first to obtain THE APPROVAL OF NMPA in 2020, which increased the pregnancy rate to 72% and the miscarriage rate to 6.9%, creating a domestic three-generation ivy testing market segment. The company has deployed more than 50 reproductive centers in the country molecular genetic testing laboratories, and has carried out business cooperation with more than 250 domestic reproductive centers, with a market share of 70% in the field of assisted reproduction.
It is foreseeable that with the continuous innovation of head enterprises, the gradual increase in the number of enterprises entering the bureau, the penetration rate of three generations of IVF technology has increased, the industry has entered a period of rapid domestic substitution, the types of approved products have been continuously enriched, the distribution of assisted reproductive medical resources has gradually balanced, and the development of the assisted reproduction industry will be more standardized, healthy and at a higher peak.
*Cover image source: 123rf