The CRO sector has risen again, and the competition in this field will become more intense!

Some time ago, the market in the pharmaceutical sector continued to slump, and leading pharmaceutical companies continued to “thunder”, resulting in the share price of many pharmaceutical stocks being “halved” one after another
.
However, in recent days, the CRO sector has clearly risen again, and many stocks have experienced daily limit
.
The CRO sector has risen again, and the competition in this field will become more intense! (Photo source; Pharmaceutical Network) Specifically, on February 15, according to data, as of the close, the CRO concept index rose by 5.
70%
.
Among them, Chengda Pharmaceutical's daily limit, Zhaoyan New Drug, Asymchem, WuXi PharmaTech's daily limit, Kanglong Chemical rose 10.
18%, Jiuzhou Pharmaceutical and Medicilon both rose by more than 8%, and Tigermed rose 5.
90%
.
In this regard, the industry believes that the CRO sector may begin to rise again
.
In fact, in recent years, as the results of the drug administration reform have begun to show, domestic pharmaceutical companies have increased the research and development of innovative drugs, and the domestic pharmaceutical CRO industry has been developing continuously
.
According to data, the scale of China's CRO industry has grown from 13.
6 billion yuan in 2011 to 67.
8 billion yuan in 2018, with an average compound annual growth rate (CAGR) of more than 20%
.
According to industry estimates, by 2023, China's CRO market is expected to reach $17.
2 billion
.
Thanks to the huge potential for long-term development, the number of CRO companies in China has also been growing
.
According to public statistics, the total number of domestic CRO companies has exceeded 500
.
However, it should be noted that, from an overall point of view, most start-ups and small and medium-sized enterprises have relatively weak comprehensive R&D strength, single technology application fields, and focus on a certain link of drug research and development, and cannot cover the main links of drug research and development.
Their business Development is subject to certain restrictions
.
Therefore, in comparison, companies represented by some leading companies such as WuXi AppTec, Tigermed, and Pharmaron have strong core competitiveness in terms of the integrity of their core technology systems, and their performance has continued to grow.

.
For example, on February 15, WuXi PharmaTech released a performance report showing that: the annual revenue in 2021 was 22.
902 billion yuan (+38.
5%, the year-on-year growth rate in brackets, the same below); the net profit attributable to the parent was 5.
097 billion yuan (+72.
19 %); after deducting non-IFRS net profit attributable to the parent company of RMB 4.
064 billion (+70.
38%); the adjusted non-IFRS net profit attributable to the parent company of the core performance indicators was RMB 5.
131 billion (+41.
08%)
.
On January 21, Kanglong Chemical disclosed its 2021 annual performance forecast
.
The company expects to achieve revenue of 7.
341 billion yuan to 7.
495 billion yuan in 2021, a year-on-year increase of 43%-46%
.
In addition, on January 12, Tigermed, a contract research organization (CRO) that focuses on providing professional services for the whole process of clinical trials for new drug research and development, also disclosed its performance forecast
.
The company expects a profit of 2.
624 billion yuan to 3.
027 billion yuan in 2021, an increase of 50%-73% over the same period of the previous year
.
The industry believes that the CRO industry has high technical barriers, and the leading enterprises have the advantages of specialization, scale and generous equity incentives.
They are expected to continue to attract talents, and the advantages of leading enterprises may become more prominent in the future
.
But at the same time, in the face of the vast blue ocean of the market, many companies will also accelerate their entry
.
It is reported that in addition to some pharmaceutical companies in the CRO field, many companies are still trying to explore across borders
.
Among them, it is worth mentioning that some pharmaceutical equipment companies are also actively seizing the opportunity to attack the CRO market
.
For example, Canaan Technology has invested tens of millions of yuan in the improvement of CRO research and development capabilities and the upgrading of testing equipment
.
On December 17, 2021, Canaan Technology replied to the agency in a newly released research report that the company's pharmaceutical R&D service business operation carrier is the wholly-owned subsidiary company Bixun Pharmaceutical
.
At present, the company has initially formed a relatively complete pharmaceutical R&D and testing system
.
At the same time, related business revenue is also growing
.
It is reported that in 2019 and from January to September 2020, Canaan Technology’s CRO business has achieved revenue of 379,700 yuan and 2,380,800 yuan respectively
.
In general, under the background of the rapid development of China's CRO industry, more and more enterprises will enter the market to grab food, but the analysis also pointed out that compared with small and medium-sized enterprises, CRO enterprises with scale advantages and core competitiveness will be in the future.
more competitive
.
Disclaimer: Under no circumstances does the information or opinions expressed in this article constitute investment advice to anyone
.