Analysis on the Present Situation and Prospect Forecast of CRO Industry at Home and Abroad

1) the general situation of global CRO industry According to the Chinese industry information network ( released the 2014-2018 (CRO) industry operating situation of Chinese medicine research and development and investment outlook report shows: on a global scale, in the past ten years, the new drug r&d costs continue to rise, statistics show that a drug into Ⅰ clinical usually takes more than 10 years of screening and evaluation, although expensive, but still only about 8% of new drugs could be finally entered the drug market 17. Facing the huge risk of investment and research and development new drug research and development, to pharmaceutical companies choose professional contract research organization to complete parts in new drug research and development process, so that the new drug research and development funding and potential risks in the CRO industry to be dispersed in the whole industry chain. A reasonable allocation of the benefits and risks of drug research endogenous factors led to the global CRO industry rapid growth over the past decade. In addition to the endogenous factors to promote the development of industry, global pharmaceutical companies increasing the investment in new drug research and development is the main driving force of the development of the CRO industry. First of all, the pharmaceutical enterprises need to develop a new drug varieties, in response to its blockbuster drug revenues after the patent expires. From 2001 to 2010, is the world's pharmaceutical brand name in the history of drug patents expire during peak hours, some large multinational pharmaceutical company successively more than half of the drug patents expire, a large number of single varieties sales of more than $1 billion of drug patent protection has expired. Expected from 2011 to 2015, with annual sales of $77 billion of drug patents expire. For big pharmaceutical companies, the heavyweight drug patent protection expires, a large number of generic listing will allow pharmaceutical companies market position by severe challenges. Therefore, increasing r&d of new drugs, as soon as possible to complete each stage of clinical trials of drugs in development, is an important means of pharmaceutical enterprises enhance their competitive strength. Secondly, since the 1960 s, represented by the FDA's drug regulators to improve the requirements of the new drug research and development, drug approval process more and more strict. Strict drug approval process and patent protection system for pharmaceutical companies to create monopoly profits at the same time, also greatly prolong the cycle of new drug research and development, forcing companies to invest more money for new drug research and development. Benefit from the good external environment, the CRO industry within less than 40 years rapid growth for pharmaceutical r&d industry chain on the indispensable important one annulus. According to Frost &sullivan, at present already bear global CRO industry for nearly a third of the new drug research and development work, from the number of rapid growth. The Business Insights estimates, at present, in the global biological medicine field, the number of CRO company has more than 1100, one of the top Quintiles (Quintiles Transnational), Vince (Covance), PPD, Charles River laboratories (Charles River Labs) and best rui jing ding (Parexel), now has $1 billion of annual revenue. The global CRO industry internationalization trend is becoming more and more obvious, CRO enterprise concentrated distribution area are also gradually from North America, Western Europe and other countries to emerging market countries. According to the data show that in 2010 the global CRO industry market capacity for $23.2 billion, to 2016, the global CRO industry market will remain around 10% of the average annual growth rate, by 2016, the global CRO industry market capacity is expected to reach $42.6 billion. 2010-2016 global CRO market capacity is calculated Worldwide, the United States and Western Europe accounted for most of the CRO industry market share, the CRO industry market size in 2010 to $10.7 billion and $5.9 billion respectively, accounting for 46.12% and 25.43% of global CRO industry market size. Business Insights, expects from 2011 to 2011, the United States, Western Europe of the CRO market scale of annual growth rate relative to the rest of the countries and regions are relatively small, 9.60% and 9.40%, respectively, and eastern Europe, China, India, the rest of Asia, Latin America and other parts of the annual growth rate will be 11.40%, 20.00%, 14.85%, 15.60% and 9.80%, higher than the growth rate of United States and Europe in the 19th. It can be seen that growth in the world's first Chinese CRO industry. Graph: the global CRO market scale growth forecasts (2) with an overview of the CRO industry in our country Born in 1996, meidi pharmaceutical service company (MDS Pharma Services) investment in China established China's first real CRO companies, engaged in clinical research of new drugs. Then other multinational CRO companies have set up branches in China, such as Quintiles (Quintiles Transnational), Vince (Covance) and Kendall (Kendle), etc. Over the same period, with some of the multinational pharmaceutical enterprises have entered China, the CRO industry in China also began to appear and got rapid development. In the CRO industry development in our country play a role milestone is the 2003 national food and drug administration issued and implemented the quality control standard for clinical trials. According to the "quality control standard for clinical trials" regulation, the sponsor can entrust contract research organization performs certain tasks and responsibilities in clinical trials, the CRO regulations approved by company in the role and status in new drug research and development, for the healthy and orderly development of CRO industry in our country to create a good external conditions. At present, from the perspective of the business content of the bear, CRO company in China can be divided into three categories: first, is engaged in the preclinical research CRO company. This part of the CRO company is mainly engaged in new drug research and development related chemical synthesis, compound screening, process and quality standard research, pharmacology and toxicology experiment and other business content; Second, in new drug clinical research CRO company. This part of the CRO company is mainly engaged in the design and research of new drug clinical research plan in the process of monitoring, data management and statistical analysis, etc; Third, engaged in new drug research and development for new drug registration and business consulting, acting CRO company. While all kinds of CRO companies are numerous, but with strength to provide customers the whole process research and development outsourcing service CRO company quantity is still very limited. At present, the domestic business is single, mostly CRO company compared with the international giant, less competitive. From the point of the size of the market, the CRO industry in China as it depends on the pharmaceutical industry, compared to developed countries, the gap is still obvious. But because of this, our country the CRO industry is faced with the huge development potential, this is mainly thanks to the unique advantages of the CRO industry in our country, specific include: First, the abundant technical personnel resources. With perfect higher education system in our country, every year there are a large number of chemical, biological, medical, pharmaceutical and other professional college graduates to society, become the talent base CRO and related industries. In addition, due to the huge potential biological medicine industry development in China, and attracted a large number of overseas talents to the domestic development, the ability of the Chinese pharmaceutical industry research and development plays a vital role. Second, the continuous cost advantage. Advantage of CRO industry development in our country is not only reflected in the have a large number of professionals of high quality, low cost, also reflected in the western developed countries relatively cheap cost of raw material costs and clinical research, it will be essential for pharmaceutical enterprises to improve market competitiveness. Third, the large patient population and rich disease. The diversity of population in our country, in the disease and the terms of the number of patients have not possessed by other countries. For drug research and development enterprise, can be finished in a short time a large number of cases in the group, complete drug safety, efficacy evaluation, will undoubtedly accelerate the process of the new drug research and development. Fourth, China's pharmaceutical industry is in the golden period of development. After more than ten years of development, our country's CRO market has begun to take shape, but the future development of space is still huge. In our country, the large population base, population aging, urbanization, coverage, and the government in health care in areas such as increasing investment, people concerned about the quality of life are increasing, all of these factors will promote, sustained and rapid development of biological medicine industry in our country, leading to the expansion of domestic demand for pharmaceutical research and development, promote the rapid development of the CRO industry. Fifth, the opportunities brought about by the industrial transfer. For multinational drug companies, high local research and development and operation This has become the growing burden. In contrast, China's talent resources and development costs has more obvious comparative advantage. China can provide a large number of highly qualified medical scientific research personnel to meet the needs of multinational pharmaceutical companies in China to carry out research and development, but the corresponding labor costs are relatively low. In addition, clinical trials in China than in Europe and the United States similar trials more cost advantage. It is due to the unique advantages of developing pharmaceutical r&d outsourcing services in China, the CRO industry got rapid progress in our country, the CRO industry in our country's market scale expanded year by year. According to the national bureau of statistics released the 2012 statistics bulletin of the national science and technology spending, pharmaceutical manufacturing enterprises above designated size of 2012, China's investment amount is 28.33 billion yuan of funds for research, released by Frost &sullivan, a third of the biomedicine industry research and development of service outsourcing ratio calculation, 2012 research and development outsourcing service market scale of domestic pharmaceutical enterprises in our country is about 9.443 billion yuan. In addition, the size of the market of the CRO industry of our country, including another important market, namely the multinational pharmaceutical enterprises to domestic CRO company commissioned services. Industry has the important influence of CRO enterprise wuxi (NYSE: WX), jean medicine main business are from such services. Wuxi monks from China medicine (before the delisting) annual report data, wuxi monk hua pharmaceutical nearly 90% of revenues are from Europe and the United States, Japan and other foreign customers trust. Therefore, consider outsourcing entrust factors from multinational drug companies, in 2013 by conservative estimates the CRO industry in our country the overall size is about 15.3 billion yuan. Graph: 2006-2014 (prediction) CRO industry market size in China CRO industry development trend in our country
The future development trend of the CRO industry in China is mainly manifested in the following aspects:
First, the industry operating threshold will be more and more high, industry concentration is rising. CRO industry as an important link of value chain, new drug research and development on the quality standard system inevitably to strict industry standards and the pharmaceutical industry. In recent years, our country about the quality of the drug development process management standard is increasing day by day, gradually to the quality standard system in western developed countries. Increasingly stringent quality standards will force CRO companies increased investment in hardware and software, increase the CRO company's operating costs, small CRO companies may face an elimination, and CRO companies of a certain scale will win more market share.
Second, the CRO industry the development trend of vertical integration. New drug research and development is a systems engineering, and the corresponding CRO service type also covered the stages of drug discovery, preclinical research, clinical research, application of new drug registration services, and other links, different links corresponding technical difficulties, the added value is high and low can be obtained. Business single CRO companies cannot meet the needs of pharmaceutical enterprises in many aspects, it is difficult to improve customer loyalty. Due to vertical integration not only can provide customers with more convenient one-stop service, also is an effective way to build their own competitiveness, improve profitability, so through the connecting link of upstream and downstream, expand the business scope to achieve vertical integration, is becoming the CRO industry new trend. At present, most international large CRO companies have the ability to provide one-stop service, whole flow but in our CRO company can provide one-stop service of whole flow still are numbered. For CRO companies in our country, to build a complete industrial chain can improve the technological innovation capability of pharmaceutical industry in our country, to meet the growing demand for CRO services.
Third, the independent innovation will become increasingly CRO company's core competitiveness. In 2011 in the dense introduced a number of related to drug research and development of the 12th five-year plan, including the development of medical science and technology "twelfth five-year" plan ", the "twelfth five-year" biotechnology development planning ", the "major drug discovery" science and technology major projects "twelfth five-year" plan ", etc. Without exception, these development planning are mentioned in the "twelfth five-year" period significantly increased China's capacity for independent innovation in the field of biological medicine, etc. CRO is derived with drug development industry, if the pharmaceutical research and development on the road of independent innovation, to provide research and development outsourcing service CRO company put forward higher request, prompted the CRO industry on the path of independent innovation.
Finally, the global pharmaceutical r&d transfer to China and other low-cost countries. In recent years, the globe, new drug research and development of the average investment increasing, which led to expansion of the market scale of the CRO industry. Compared with the developed countries, our country has relevant human resource and low labor costs and raw material costs and other significant advantages, in our country to carry out research and development of new drug research and development can significantly reduce the cost. So, the international large pharmaceutical companies have established a r&d center in China, will be a lot of new drug research and development work carried out in China, this will give our country the CRO industry provides more opportunities. At the same time, the international large-scale CRO companies to enter the Chinese market in the form of joint ventures or mergers and acquisitions, CRO companies how to deal with the challenge of international counterparts, how to improve their own strength to participate in international competition, become the inevitable question CRO company in China.