Asia Sector Insights: China’s Biotech Revolution

Asia Sector Insights: China’s Biotech Revolution

8th October 2020




Q1: What are biologic drugs?

Biological drugs refer to products derived from living organisms or parts of living organisms, such as proteins, vaccines, blood components, and genes. A biologic drug/medicine is different from small single-molecule medicines, larger in terms of molecular weight and much more complex in structure.

This type of drug has recently become more popular as new therapies in various disease areas such as cancers, autoimmune diseases, and endocrine system diseases have developed. Biologics manufacturing is very different from chemical manufacturing. Since microorganisms are usually used in production, an environment suitable for growing microorganisms is essential. The manufacturing process often requires a specific temperature and conditions to be strictly followed.

Q2: Why are you excited about China biotech sector? 

We believe that China’s biotech market to reshape given: 

  • NMPA’s seismic drives to build a more transparent and efficient drug approval system with global standards; 
  • prescription mix shifts that are increasingly focusing on clinical benefits; and 
  • the establishment of a more dynamic, pharmacoeconomics-driven single-payer system. 

These changes will likely shift the industry strategic focus more from generics to novel drugs, driving consolidation in the generic industry and the emergence of innovative biotech companies, potentially providing significant economic returns on investments. 

While a significant number of the Chinese biotech companies are developing me too/me better products to mitigate the R&D risks, driving cancer and other therapeutic categories into more crowded space, we expect a gradual evolution of the R&D strategies into best-in-class/first-in-class in the future. This will potentially catalyze the innovation ranging from contracted research, drug discovery to drug manufacturing in the Chinese market.

Q3: What are the underlying demand drivers for the China biotech sector?

We believe demand for quality healthcare in China will continue to be driven by an aging society (over 400 mln people expected to reach above 60 years of age by 2030F) as well as the urbanization trend with over 56% of the population now living in the urban locations. In addition, the average disposable income of residents has increased to Rmb28,228 in 2018 (or US$4,097), up 54% from 2013.

As shown in the charts below, cancer incidences, diabetes prevalence increase significantly beyond the age of 50-60 years. 

As we can see in the chart, according to Frost & Sullivan, China biologics market is expected to grow at a CAGR of 19% from US$40 bln in 2018 to US$96 bln in 2023e. 

Foundries also have high potential to localize. Domestic foundries are growing rapidly, with some companies breaking into advanced processes.

As we can see in the chart, biotech drugs account for only 5.7% of the Chinese pharmaceutical market. In contrast, in the global market, biotech drugs account for 26.5% of the total pharma market. 




The mentioned companies are strictly for educational and fund marketing purposes only. For more information on our product offering, please refer to our website.

This document is intended for Hong Kong investors only. This material is neither an offer to sell nor solicitation to buy a security to any person in any jurisdiction where such solicitation, offer, purchase or sale would be unlawful under the laws of that jurisdiction. Investment involves risk.
The information in this material is based on sources we believe to be reliable but we do not guarantee the accuracy of completeness of the information provided. This material has not been reviewed by SFC and shall only be circulated in countries where it is permitted.
This material is intended solely for your private use and shall not be reproduced or recirculated either in whole or in part, without the written permission of Mirae Asset Global Investments. This document has been prepared for presentation, illustration and discussion purposes only and is not legally binding. Whilst compiled from sources Mirae Asset Global Investments believes to be accurate, no representation, warranty, assurance or implication to the accuracy, completeness or adequacy from defect of any kind is made. The division, group, subsidiary or affiliate of Mirae Asset Global Investments which produced this document shall not be liable to the recipient or controlling shareholders of the recipient resulting from its use. The views and information discussed or referred in this report are as of the date of publication, are subject to change and may not reflect the current views of the writer(s). The views expressed represent an assessment of market conditions at a specific point in time, are to be treated as opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. In addition, the opinions expressed are those of the writer(s) and may differ from those of other Mirae Asset Global Investments’ investment professionals.
The provision of this document shall not be deemed as constituting any offer, acceptance, or promise of any further contract or amendment to any contract which may exist between the parties. The issuer of this article is Mirae Asset Global Investments (HK) Limited (“we”) which we may or our managed funds may hold the mentioned securities. It should not be distributed to any other party except with the written consent of Mirae Asset Global Investments. Nothing herein contained shall be construed as granting the recipient whether directly or indirectly or by implication, any license or right, under any copy right or intellectual property rights to use the information herein. This document may include reference data from third-party sources and Mirae Asset Global Investments has not conducted any audit, validation, or verification of such data. Mirae Asset Global Investments accepts no liability for any loss or damage of any kind resulting out of the unauthorized use of this document. Investment involves risk. Past performance figures are not indicative of future performance. Forward-looking statements are not guarantees of performance. The information presented is not intended to provide specific investment advice. Please carefully read through the offering documents and seek independent professional advice before you make any investment decision. Products, services, and information may not be available in your jurisdiction and may be offered by affiliates, subsidiaries, and/or distributors of Mirae Asset Global Investments as stipulated by local laws and regulations. Please consult with your professional adviser for further information on the availability of products and services within your jurisdiction.
Hong Kong: This material is prepared by Mirae Asset Global Investments (HK) Limited (Mirae HK). Mirae HK is regulated by the SFC (CE reference: ALK083).
Australia: The information contained on this document is provided by Mirae Asset Global Investments (HK) Limited (“MAGIHK”), which is exempt from the requirement to hold an Australian financial services license under the Corporations Act 2001 (Cth) (Corporations Act) pursuant to ASIC Class Order 03/1103 (Class Order) in respect of the financial services it provides to wholesale clients (as defined in the Corporations Act) in Australia. MAGIHK is regulated by the Securities and Futures Commission of Hong Kong under Hong Kong laws, which differ from Australian laws. Pursuant to the Class Order, this document and any information regarding MAGIHK and its products is strictly provided to and intended for Australian wholesale clients only. By accessing this document and any information or content contained in it, you represent that you are a ‘wholesale client’ under the Corporations Act. This document is strictly for information purposes only and does not constitute a representation that any investment strategy is suitable or appropriate for an investor’s individual circumstances. Further, this document should not be regarded by investors as a substitute for independent professional advice or the exercise of their own judgement. The contents of this document is prepared and maintained by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Australian Investments & Securities Commission. No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission of MAGI HK. Copyright 2020. All rights reserved.




News and Press