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Just landed overseas and pulled back to China, antigen reagents from "abandoned" to "altar" roller coaster

 Last Update: 2022-12-30
 Source: Internet
 Author: User

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In mid-December 2022, a plane transporting new crown antigen reagents exported abroad by a domestic manufacturer had just arrived at an overseas airport, and the goods had not yet had time to unload, and the whole antigen was required by the manufacturer to be shipped back to China - the reason is that China's antigen demand has exploded, and a box of difficult to find has emerged, and relevant government departments have begun to requisition antigen manufacturers' products
.

Some private medical institutions that need to do antigen tests for doctors and patients are looking for channels to buy antigens everywhere, and almost all manufacturers have been informed: there is no stock, and priority is given to ensuring government demand
.

In the past month, after the epidemic in Guangzhou, Beijing and Shanghai ushered in a new wave of outbreaks, the demand for antigens broke
out sharply.
In early December, Guangzhou first encouraged citizens to bring their own antigen kits, and then Beijing and other places introduced similar policies
.
Earlier, the state issued twenty optimization measures for epidemic prevention and control, and many places announced the cancellation of regional nucleic acid, and antigens have become the most convenient tool
for people to self-test.

The vent is coming, and it is difficult
not to take off.
The original antigen kit with a unit price of 2-3 yuan per copy once increased in price by 5-6 times or even higher
.
But even if the price is high, it is difficult to find, individual consumers cannot buy it, and there are dealers with millions or tens of millions of cash, and they still can't grab antigen kits
.

In this context, there is news that the government has successively controlled the production lines of some antigen testing enterprises, such as the news that the antigen factory in Jiuan Medical was taken over
by the state.
This means that most of the company's production capacity will not belong to itself, and less will be independently circulated to the market
.

Most of the company's production capacity will not belong to itself, and less will be independently circulated to the market
.

Chinese companies are the main suppliers of overseas antigen
kits.
The enterprises that took the lead in going overseas enjoyed the revenue dividend early, and the net profit growth reached the degree of direct multiplication several times
.
Up to now, more than 40 companies have been approved to market antigen kits
.
But obviously, this sudden tsunami-like market demand in China, their production capacity is still unable to resist
.

"Capacity is king" is now a widely recognized saying
in the industry.
There are also many companies who fantasize that taking advantage of this shareholder wind, antigen testing will usher in a prosperous outbreak like nucleic acid testing, and realize their own myth
of creating wealth.

But with government expropriation, the window seems to be tightening, how long is the prime time for antigen testing development? Where is the current production capacity dilemma?

-01 - The antigen "stood up"?

"Explosive orders" is now a happy and headache for many antigen reagent manufacturers
.
Happiness lies in hundreds of thousands or even millions of orders coming in, which they have not experienced before
.
And the headache also comes from this, behind the shortage of supply is the constraint of production capacity
.

A salesperson at one manufacturer said that his company has suspended orders for now, "whether you want to wholesale millions of copies or tens of millions, we will not resume until January.
"
In fact, many manufacturers now do not sell futures (antigen reagent products that need to be scheduled), but only sell spot, that is, spot production and sales, and how much capacity is sold on the day
.

In addition, the sales staff of several manufacturers admitted that they can still accept orders, but the order of delivery is according to the level of bidding
.
"Try to get a higher unit price to ensure that the sooner you deliver.
"
At present, the lowest wholesale unit price is already 3.
81 yuan / person, while the previous wholesale price has been stable at the level
of more than 1 yuan.

In addition to the influx of suppliers, the government's large number of orders also make it difficult for manufacturers to cope
in the short term.

Not long ago (December 8), the comprehensive group of the joint prevention and control mechanism of the State Council issued a new crown virus antigen testing application plan, for the elderly at home and the elderly in nursing institutions, the plan proposes that the city/district and county where it is located should issue antigen testing reagents
for the elderly free of charge according to the number of elderly people in their jurisdiction and the frequency of weekly antigen testing.
With primary medical and health institutions as reserves, each primary medical and health institution reserves antigen detection reagents
according to 15-20% of the total population served.

The company did not react at once, and the lack of product supply was only a result
.
One of the fundamental reasons is that the upstream raw materials did not have too many reserves before, and some industry insiders revealed that in fact, each manufacturer has at least hundreds of thousands of servings or even million-level production capacity
.

One of the fundamental reasons is that upstream raw materials did not have much reserve before

In fact, antigen testing is mainly composed of upstream raw materials, including NC film, antigen antibody, PVC glue board, packaging materials and other parts, the midstream is the listed enterprise of antigen detection kit, and the downstream is pharmacy and online pharmacy
.

These raw material manufacturers were also unexpected, the person said that in September and October this year, these raw material manufacturers did not hope for the rise of antigen reagents, and had already voted with their feet to start clearing inventory
.
What's more, many manufacturers have withdrawn equipment and workers
earlier.

In fact, it is not difficult to understand their behavior, throughout the year, domestic antigen reagents have indeed experienced roller coaster ups and downs
.
In March this year, the official website of the National Health Commission released the Notice on Printing and Distributing the Application Plan for New Coronavirus Antigen Testing (Trial) (hereinafter referred to as the "Plan"
).
Since then, domestic antigen self-test products have been released for use
.
At present, the State Food and Drug Administration has approved 39 new coronavirus antigen detection reagent products, including colloidal gold, latex and immunochromatography
three methodologies.

At that time, there were already Chinese companies that first seized the wind of antigen testing overseas and soared
.
Once known as a "monster stock", Jiuan Medical has been accepting orders
from the US government since the end of last year.
According to its financial report, the net profit attributable to the parent in the first three quarters of this year was 16.
050 billion yuan, a year-on-year increase of nearly 320 times
.

The policy liberalization has made many domestic counterparts begin to look forward to it, and China will usher in a similar wave of market outbreak
.
But not a few days later, the National Health Insurance Administration pointed out that the price of the new crown antigen test is set by the provincial medical security departments according to the government guidance price
of no more than 5 yuan per person.
Since then, centralized procurement
has been carried out in many places.

It can be said that from March to November this year, the domestic antigen test production capacity is large and the demand is small; Today, market demand has taken a turn, but production capacity has not changed
much.
The antigen drove from the trough to the top at high speed, and never was taken seriously to a crazy run
.

Now the obstacle to capacity improvement is also the shortage
of manpower for manufacturers.
"A big challenge is that antigen kits are manually assembled, and a large number of workers may not have enough manpower due to 'yang'; in addition, production needs to be in a clean workshop that meets national requirements, and manufacturers cannot expand the production area
so large for a while.
" Wang Haijiao, Managing Partner of Gao Tejia Investment, explained
.

Now the obstacle to capacity improvement is also the shortage
of manpower of manufacturers.

Whoever gains production wins
the world.
In his view, those enterprises that have obtained certificates in overseas markets and exported a large number of enterprises have more advantages
in this round of domestic capacity competition.
"For example, Oriental Biotechnology, Hotjing Biotechnology, Akang Biotechnology, Bo Osais, etc.
, they all have experience in organizing large-scale production because of overseas business, and they can easily increase their production capacity
.
"

"To what extent the demand for antigens will explode in the future, one lies in the policy, the other lies in the production capacity, now is the initial outbreak after the control is liberalized, many people are grabbing, and the production capacity has not gone
up.
" An industry insider said
.

In order to expand production capacity, the new crown antigen test kit registration certificate may accelerate the approval
.
In fact, the threshold for new crown antigen detection technology is not too high, and the registration certificate is the biggest threshold
for entering this performance time-limited carnival.

When production capacity is generally increased, the absolute seller's market will no longer exist, and even the situation of overcapacity of gloves at the beginning of the epidemic will be reproduced 3 years ago
.
The above-mentioned people learned that several enterprises that have obtained registration certificates in China are actively expanding production
.
"Most companies that take goods this week definitely don't have them, but they will have them next week
.
"

-02-Random prices and control fly together, the "hand of the market" will be invalid?

Not only do consumers need to buy antigen reagents at high prices, but the antigen detection reagents in some provinces have also shocked many people in the industry - the minimum is 3.
5 yuan / person, which is almost the same
as the price of nucleic acid testing.

In the view of Zhong Chongming, an expert in health service operations, this price is inflated and even somewhat despicable
.
"Nucleic acid reagents are now reduced to 3 yuan / person, but the price of antigens with lower costs is "offside", and the test results are not yet nucleic acid accurate
.
”

It is an undeniable fact that nucleic acid test results are more accurate, and it is the current gold standard
for new coronavirus diagnosis.
It finds coronavirus-related DNA by amplifying the genetic material in the collected sample by 1 billion times, with an accuracy rate of nearly 100%.

According to data from the Infectious Diseases Society of America, for symptomatic people, compared with nucleic acid testing, the accuracy of antigen testing is about 80%, but the accuracy rate for asymptomatic infected people is only 50%.

Behind this is that nucleic acid detection has higher technical costs and labor costs, requires more time, complex processes, skilled technicians and special equipment, which are impossible to compress the inspection costs
.
On the other hand, antigen testing, its technical barriers are not high, users can operate the test by themselves, faster and more convenient
.

Now antigen reagents are still in the stage of blowout demand, supply exceeds demand, and the product has opened a price increase mode
.
In general, high prices fly is the reality of the current antigen reagent market, and the coordination of volume and price is not at all a complete mechanism
.

High price flying is the reality of the current antigen reagent market, and the coordination of volume and price is not at all a complete mechanism
.

"If the price goes up by a few hundred percent, and then the strategic purchase price is reduced by 90%, it is too child's play
.
" This makes it easy to form a price maintenance alliance
.
Zhong Chongming believes that market pricing and bidding should be done based on the cost of the product, that is, what is the better efficiency of the cost
.
According to the calculation of GF Securities, the current production cost of a single copy of antigen self-test reagents in China is about 2-3 yuan
.
In extreme cases, the production cost of antigen reagent products can be reduced to 1.
5 yuan
.

In fact, the "hand of the market" has not yet had time to fully function, and the other big hand has already begun to act
.
Recently, many cities have begun to establish antigen reagent supply mechanisms
.
For example, in Hangzhou, some media reported that more than 70 local chain pharmacies were included in the guarantee list, and each person was limited to 5 copies, each 4 yuan
.
As early as last week, there were media reports that Nanjing made a unified price for antigen reagents on the market, and the price
of 4 yuan per copy could not be increased.

Some companies have revealed that they have added several new crown antigen reagent production lines under the unified deployment of the government, which are used to prioritize the epidemic prevention and control needs
of government agencies and educational institutions.

Recently, it was reported that Jiuan Medical's domestic antigen factory was taken over
by the state.
"Jiuan may be all directional supply, and only 20% of some enterprises can still circulate to the market
.
We still have 40% of the money in circulation, but that also includes orders
from other government departments.
An antigen reagent manufacturer revealed
.
Most of the production capacity of enterprises does not belong to themselves, and less is circulated to the market, which is the main reason
why it is difficult for individual consumers to buy antigen reagents.

For these companies, there are some hidden things
.
"The government procurement price is more than 3 yuan, and it takes 1-2 days of production capacity
at a time.
Although they all exploded, they had to do it with limited profits, which was embarrassing
.
Another industry insider said that even if other businesses are affected, it is necessary to first protect the product demand of the government and other people, and temporarily do not sign contracts for other antigen needs
.

The "scenery" and "storm" of nucleic acid testing companies seem to have happened yesterday, and Rijin Doujin is them, but there are also many companies that have been dragged into the quagmire of payment collection
.
Therefore, some antigen testing companies, especially small and medium-sized enterprises, maintain a wait-and-see attitude
on expanding production due to concerns about credit accounts.
Just in the first half of this year, the account period of the new crown antigen test was about 1-2 months
.

Some companies began to choose to transfer the risk to distributors and sell them at a lower price, at least antigen reagent companies directly spot cash, or even pay first and then goods
.
Dealers can make that part of the high profit, but also bear the risk
of market uncertainty.
"I can clearly feel that with the lessons of nucleic acid, antigen manufacturers are very low-key and do not publicize
much.
"

Some companies began to choose to transfer the risk to distributors and sell them at a lower price, at least antigen reagent companies directly spot cash, or even pay first and then goods
.

"The amount of antigen reagents used will become larger, and the price will gradually become transparent, just like
the previous masks.
In the future, it will be possible to carry out nationwide collective procurement negotiations and further price
reductions.
Another industry insider predicted
.

-03 - The antigen outbreak will eventually return to rationality, and more tracks of IVD should be seen

Regardless of whether the antigen repeats the absurd drama of nucleic acid testing for a period of time, it is certain that the era of large-scale nucleic acid testing is accelerating away, and the era of antigen testing is coming
.

The era of large-scale nucleic acid testing is accelerating, and the era of antigen testing is coming
.

If we refer to the development of overseas antigen testing markets, there is still a long-term demand
for domestic antigen testing.
Taking the United States as an example, in November this year, the US government purchased another 200 million doses of antigen tests, of which Jiuan Medical received an order
of 1.
3 billion US dollars.
It can be seen that after the end of the first wave of infections, the demand for antigen tests will not disappear
.

Some people have calculated that in the next two years in China, the regular annual demand for antigen self-test demand will be about 3 billion people; The demand on the hospital side will continue for a long time, with about 2 billion tests per year, so this is a subdivision IVD (in vitro diagnostics) market
of about 5 billion people.

However, it is undeniable that there is a price gap between antigen reagent products at home and abroad, and the myth of wealth creation is difficult to replicate in China
.
Take the large order signed by Jiuan not long ago, the export price of its single antigen is 18.
97 yuan
.
Its third quarterly report shows that the company's net profit margin is close to 70%, that is, every 100 yuan sold can earn close to 70 yuan
.
However, in the long run at home, especially in the trend of the government gradually taking over the pricing power of antigen kits, its domestic prices and profit margins may not be optimistic
compared with foreign countries.
Some industry insiders have estimated that the gross profit of domestic antigen kits has been about 50%.

"In the future, it will be almost impossible
for China to make a fortune on antigens.
" The profit is getting thinner and thinner, although raw materials can reduce costs if they are self-developed, but under the absolute quantity difference, reducing costs is just a drop in the bucket
.

Companies that have previously targeted overseas markets have experienced the boost
of antigen testing to growth.
Since 2020, many domestic enterprises have successively gone overseas and have successively obtained the EU CE certification and FDA certification
.
Taking Lepu as an example, from 2019 to 2021, the proportion of its overseas business revenue increased from 7.
11% to 35.
27%.

It publicly stated that this was mainly due to the rapid promotion of the access and sales of new crown antigen test products in the EU CE
.

Just last month, two more Chinese companies (Hotjing Biotech and Anxu Biotechnology) just obtained US FDA certification
.

"In the future, the main force of new coronavirus testing should be antigen testing, but as a diagnostic product, nucleic acid testing will not disappear
.
" Wang Haijiao said
.
In his eyes, the boom in nucleic acid and antigen testing is also a further popularization
of science in the field of IVD.
In the past, the IVD industry was not taken seriously, and diagnosis could not solve the problem
.

"After the epidemic, everyone will realize that only by clearly diagnosing the disease can we prescribe the right medicine and have a deeper understanding
of the entire industry.
"

In the eyes of another industry observer, whether it is nucleic acid testing or antigen testing, they are a product or service, accompanied by different needs
of epidemic prevention policies and epidemic prevention measures at different historical stages.
"Maybe there is a lot of demand during this period and less demand during that time, which is normal
.
Overall, they all belong to the in vitro diagnostics industry
.
”

The outbreak of antigens has obscured the IVD industry, and the entire IVD industry has many tracks, such as chemiluminescence, molecular diagnosis, tumor sequencing, POCT, pathology and coagulation
.
However, in the past three years of the epidemic, nucleic acid testing in the past and antigen testing now have taken turns to be the guests
in the spotlight of the industry.
A relevant practitioner admitted frankly: "The entire industry is sluggish, only nucleic acid, antigen and other high-end businesses still have flowing water, and everyone will feel pimples in their hearts
.
" ”

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