(1) Overview of the anti-tumor targeted drug market
1) Definition and main classification of anti-tumor targeted drugs
According to the definition of the National Institutes of Health (NIH), anti-tumor targeting** is a type of cancer that targets proteins that control the growth, **, and spread of cancer cells**, and can be mainly divided into chemical molecular drugs and biological drugs. By the end of 2020, there were more than 60 anti-tumor targeted drugs on the market in China.
2) There is a lack of effective drugs for high-incidence cancers in China
AlthoughLung cancer, stomach cancer, colorectal cancer, liver cancerThe number of other diseases in China is high, but at present, compared with the United States, the number of cancer targeted drugs in China is small, and cancer patients in China lack effective cancer pathways.
Just forLung, stomach, colorectal, liver and hematological cancersThe number of targeted drugs in the United States is much higher than that in China. In addition, although diseases such as gastric cancer, colorectal cancer, and liver cancer rank second to fourth in China, the number of drugs is still small.
As of the end of 2020, there were only 6 targeted drugs for gastric cancer on the market in China. For a large number of cancer patients, the choice of targeted drugs on the market is very limited, and there is an urgent need for new and effective targeted drugs.
3) Market size analysis of China's anti-tumor targeted drugs
In 2019, the size of China's anti-tumor targeted drugs market was 477600 million RMB, with a CAGR of 27 from 2015 to 20191%。Due to the relatively late launch of antibody drugs in China and the relatively high level of antibody drugs compared with chemical drugs, there has been an urgent need for anti-tumor antibody drugs with better efficacy in China.
Benefiting from China's urgent demand for anti-tumor antibody drugs with better efficacy, as well as China's increasing consumption power and related policies to encourage the development of new drugs, the market size of China's anti-tumor targeted drugs is expected to reach 1,628800 million RMB.
(2) Anti-tumor antibody drug market
Antibody drugs are an important component of anti-tumor targeted drugs. In recent years, antibody-based methods have experienced rapid growth, mainly including traditional monoclonal antibodies, antibody-drug conjugates (ADCs), and bispecific antibodies.
As of the end of 2020, about 20 antibody drugs have been launched in China, and the market size has reached 482400 million RMB. In the future, driven by the continuous development and marketing of more innovative anti-tumor antibody drugs, the effective treatment of more cancer diseases**, and the continuous improvement of patients' ability to pay, China's anti-tumor antibody drug market will continue to develop and is expected to reach 1,062 in 2025The market size is 600 million RMB.
(3) Cell** market
1) Overview of the Cell** industry
Cells** isolate immunoactive cells from the patient's body, expand and function in vitro, and then infuse back to the patient, enhancing the number of immune cells that kill tumor cells, thereby greatly improving the ** effect. According to the Cancer Research Institute, a non-profit organization that tracks cancer immunity** clinical trials worldwide, as of the end of 2020, cell** has developed into the largest number of immuno-oncology tools in terms of clinical pipelines.
2) Cell** subdivisions
Chimeric antigen receptor T-cell immunity** (CAR-T).
CAR-T (ChimericAntigen Receptor T-Cell Immunotherapy), chimeric antigen receptor T-cell immunotherapy**, is a kind of cellular immunity** against tumors**, and it is also a gene with great research value**. CAR-T is a method of expressing transmembrane chimeric antigen receptors and redirecting them to T cell specificity by gene editing. The process of CAR-T preparation can be broadly divided into four major steps, including: isolation of T cells, gene editing, expansion of CAR-T cells, reinfusion, and monitoring.
CAR-T agents are still in the early stages of the market. As of the end of 2020, only three CAR-T formulations have been approved for marketing in the world, namely Novartis' Kymriah and Gilead's Yescarta and Tecartus in the United States. Kymriah's sales** are 47$50,000, with $37 in sales of Yescarta and Tecartus**$30,000. The high cost of ** has largely limited the global adoption of these CAR-T preparations. The first two CAR-T formulations were primarily sold in the U.S., with total sales of 2$800 million and 4$600 million.
On the CAR-T R&D side, the global market is highly competitive, and the total number of clinical and preclinical trials is growing rapidly, with the main competition concentrated in China and the United States. As of the end of 2020, a total of 20 CAR-T preparations have been approved for clinical trials by the National Medical Products Administration, involving 18 drug R&D enterprises and institutions, involving 4 targets. As of the end of 2020, two CAR-T cell** preparations in China have taken the lead in entering the marketing application stage. Due to the large number of patients with hematological tumors and the urgent need for effective methods, the market space of cell drugs in China is expected to exceed 10 billion yuan in 2030.
T cell receptor chimeric T cell immunity** (TCR-T).
TCR-T (T Cell Receptor-Gene Engineered T Cells)** is also a modified T cell-based approach to tumor immunity**. T cell receptors (TCRs) are characteristic landmarks on the surface of T cells that mediate the recognition of antigens presented by major histocompatibility complex (MHC) molecules. TCR-T cell immunity** uses viral or non-viral vector systems to transduce TCR genes that specifically recognize tumor antigens into T cells in the peripheral blood of patients**, which are cultured in vitro, amplified in large quantities, and then infused back into patients, thereby exerting MHC-dependent anti-tumor effects.
Unlike CAR-T, which modifies T cells on a large scale, TCR-T technology only modifies the specific antigens of the original T cells to enhance their aggressiveness against tumor cells. As of the end of 2020, there are no TCR-T products available worldwide.
(4) Analysis of the driving factors of the China targeted drugs** market
1) The pressure on new drug research and development under the new medical reform policy
In recent years, China's pharmaceutical industry has faced tremendous changes under a series of new medical reform policies. In order to reduce the medical burden of the people, improve the payment method of medical insurance, improve the enthusiasm of hospitals, and promote the better implementation of drugs, since the establishment of the National Health Insurance Bureau in 2018, the state has vigorously promoted the policy of volume procurement. On the one hand, the volume is exchanged for price, and the drug sales volume is included in the bidding content; On the other hand, the quality is strictly controlled to avoid quality problems under the low-price bidding system. For pharmaceutical companies, those that do not win the bid can only share the small market share except for volume procurement. Although the winning bidder has obtained a stable market share and sales guarantee, the price reduction is extremely large, and the average price reduction of drugs purchased with volume is more than 50%, and the overall profit growth is limited. Therefore, non-innovative pharmaceutical companies as a whole are facing greater pressure.
With the implementation of the volume-based procurement policy, the market access threshold for non-innovative pharmaceutical companies has been continuously raised, and they have gradually shifted from sales-driven to cost- and market-access-driven. Enterprises that rely solely on the sales team for academic promotion, have no new drug research and development, or have a slow research and development speed, and the clinical speed will be difficult to maintain. In the long run, the future competition under the centralized procurement policy is inevitable, and the number of products, R&D team, cost control and other aspects are particularly important. Under the fully competitive landscape, innovative drugs and products with fewer competitors are obviously more dominant, which will also prompt non-innovative pharmaceutical companies to set up their own R&D teams to a certain extent, paving the way for enterprises to transform from generic drugs to innovative drug markets.
In addition, in terms of policy, whether it is the mass innovation strategy that the state attaches great importance to, the national planning of the biopharmaceutical industry, or the extension of patents in terms of intellectual property protection, all of which will help promote the research and development of new drugs to become the mainstream trend of the industry.
2) China's growing aging society will increase the demand for antibody drugs
China's aging society is becoming more and more prominent, with 1 of China's population over the age of 65 in 20153.1 billion, which has grown to 16.4 billion, with a CAGR of 58%。In 2019, 11 percent of China's population was over 65 years old5%。As China's aging society continues to develop, the proportion of the aging population will reach 13 in 20246%, the number will reach 19.8 billion. Older people over the age of 65 suffer from chronic diseases, tumors, and autoimmune diseases at a much higher rate than younger people due to poor immunity and accumulation of damage.
In addition, due to the poor physical tolerance of the elderly, strong chemotherapy and surgery may not be suitable for cancer in the elderly. Therefore, China's aging population will increase the demand for antibody drugs, which will ultimately promote the market development of antibody drugs in China.
3) Chinese's per capita income and total medical and health expenditure continued to grow steadily, driving the development of the targeted drug industry
With the rapid development of China's economy, the average annual disposable income of Chinese has also increased significantly in the past few years. China's urban per capita annual disposable income increased from 310,000 RMB grew to 420,000 RMB, with a compound annual growth rate of 79%。After 2019, although China's economic growth slowed slightly, the compound annual growth rate was still 5Around 8%. It is expected that by the end of 2023, China's per capita annual disposable income will reach 560,000 RMB.
China's total medical and health expenditure refers to all the expenditures of the medical industry, including **, society and individuals. China's total health expenditure in 2015 was 40,974600 million RMB, which reached 65,841. in 2019400 million RMB, with a compound annual growth rate of 126%。It is expected that China's total medical and health expenditure will continue to maintain stable growth in the future, and the increasing expenditure of the state, society and individuals in medical and health will greatly promote the development of China's antibody drug market.
Whether it is China's rising per capita disposable income or the rapid development of the medical and health industry, it shows that China has the ability and willingness to focus on the development of the medical and health industry. As one of the most urgent areas for development in China, Targeting** will surely enjoy more resource investment, which will promote the development of the entire industry.
(5) Industry entry barriers
1) Talent and technical barriers
The research and development of anti-tumor targeted drugs is inseparable from an experienced research and development team. Among them, R&D leaders often need more than ten years of experience in new drug research and development to accurately select suitable research targets and combine them with clinical practice to minimize the cost of trial and error. In addition, the R&D of anti-tumor targeted drugs also requires a large number of R&D talents to provide support for target validation, compound screening and other R&D links. New entrants to the market often do not have a mature R&D team, and it is difficult to compete with a mature R&D team in the market.
2) Funding barriers to new drug R&D
In the R&D of anti-tumor targeted drugs, the company must bear a series of R&D costs such as personnel, equipment, and all consumables in the R&D process, which requires a large and long-term financial support. In addition, companies have to bear the opportunity cost of possible R&D failures. New entrants to the market, especially new drug R&D teams, often struggle to get sufficient financial support and fall into R&D difficulties.
3) Barriers to access to clinical resources for new drug trials
The lack of sufficient clinical resources is a problem for many biopharmaceutical companies, especially new entrants in the industry. Compared with traditional chemical drugs, anti-tumor targeted drugs are more targeted and have a higher degree of specificity in the human immune response. Therefore, in the research and development of anti-tumor targeted drugs, R&D enterprises and clinical hospitals often need to establish long-term and close cooperative relations. In the absence of sufficient development history and well-known R&D leaders, it is often difficult for new entrants to obtain hospital recognition and access to clinical resources, making it difficult to successfully develop anti-tumor targeted drugs suitable for clinical patients in China.
(6) The future development trend of the industry
1) Successive research and development of innovative drugs
Since September 2018, when the National Health Insurance Administration announced the volume procurement policy at the symposium of pilot manufacturers of volume centralized procurement held in Shanghai, the volume procurement plan for drugs has been gradually rolled out from the 11 cities of "4+7" to the whole country. Volume-based procurement means that the drugs that have passed the consistency evaluation and the production capacity guarantee will be procured by centralized bidding, and the winning bidder will receive 60%-70% of the total annual drug share of all public medical institutions in the pilot area.
Due to the obvious price reduction caused by the volume procurement policy and the fact that there are no more than three winning bidders for the same drug nationwide, a large number of generic drug companies are likely to lose most of the market space, and the pressure on drugs without generic products is lighter. Therefore, the volume procurement policy forces pharmaceutical companies to carry out innovative research and development.
In addition, with the gradual enhancement of the R&D capabilities of Chinese pharmaceutical companies, the R&D competition for various innovative drugs is fierce, and according to the CDE clinical announcement, more than a dozen pharmaceutical companies are conducting R&D for PD-(L)1 drugs alone, and the competition for drug R&D is becoming increasingly fierce. In the future, pharmaceutical companies engaged in innovative drug research and development will become a market trend.
2) Expansion of existing drug indications
One of the industry trends in the expansion of anti-tumor targeted drug drug indications. As of the end of 2020, KEYTRUDA (pembrolizumab) has been approved by the FDA for 12 cancer-related indications, and Odivo (nivolumab) has also been approved by the FDA for 10 indications such as melanoma, non-small cell lung cancer, and colorectal cancer. PD-1 drugs in China have also been approved for Hodgkin lymphoma, liver cancer, gastric cancer, esophageal cancer and other indications. In the future, it is expected that more drugs and more indications will gradually advance and be approved in clinical trials in China.
3) The scope of medical insurance has been further expanded
In 2015, the state conducted a trial trial of medical insurance negotiation for the first batch of 3 drugs, and officially implemented the ** negotiation mechanism for the first time in 2017, and finally 36 drugs entered the national medical insurance category B list, of which 5 were anti-tumor targeted drugs. Subsequently, in the medical insurance negotiations that began in July 2018, the National Healthcare Security Administration finally succeeded in including 17 negotiated anti-cancer drugs into the scope of Class B of the National Drug Catalogue for Basic Medical Insurance, Work-related Injury Insurance and Maternity Insurance, including 1 anti-tumor monoclonal antibody and multiple classes of immunosuppressants. The entry of a variety of anti-tumor targeted drugs into the medical insurance reflects the determination to reduce the payment pressure on patients in terms of expensive drugs such as antibodies, and it is expected that more anti-tumor targeted drugs will be included in the medical insurance list in the next few years.