滕州Characteristics of the pharmaceutical intermediate industry

Industry characteristics

 Industry periodicity:

The pharmaceutical CMO industry fluctuates due to the overall demand of the downstream pharmaceutical industry, and its periodicity is basically consistent with that of the pharmaceutical industry. These impacts are divided into external and internal factors:

External factors mainly refer to the macroeconomic cycle and the approval cycle for new drug launch, which have a significant impact on the outsourcing of innovative drug research and development. The pace of approval for new drugs by drug regulatory agencies such as the FDA also has a certain impact on the industry, mainly referring to the time span of new drug approval and the number of approved new drugs. When it is beneficial for pharmaceutical companies, it will increase the demand for pharmaceutical outsourcing services.

The internal factor is mainly the patent protection cycle of innovative drugs. Once the patent protection for innovative drugs expires, pharmaceutical companies will have to face a significant impact from generic drugs, which will encourage them to outsource their own production supply chain in order to reduce production costs and bring more business opportunities to pharmaceutical CMO companies.

Regional and seasonal characteristics:

1) Regional characteristics

The pharmaceutical outsourcing service industry with high-end technological barriers is gradually shifting to emerging countries, and a very few excellent Chinese pharmaceutical CMO enterprises have formed a confrontation with traditional advantageous CMO enterprises in Europe and America.

2) Seasonal characteristics

For pharmaceutical CMO enterprises, factors such as budget management and R&D production cycle arrangement of pharmaceutical companies directly affect their quarterly revenue.

The technical requirements of the pharmaceutical CMO industry are high, especially in the research and development of pharmaceutical processes. Intellectual property rights related to pharmaceutical processes are an important component of the pharmaceutical industry. Pharmaceutical CMO enterprises also need to provide continuous process optimization services to help pharmaceutical companies reduce production costs while ensuring the supply of drugs in the market; Before and after the expiration of drug patents, pharmaceutical CMO companies use innovative or even disruptive technologies to improve production processes or break through patent barriers, thereby achieving the goal of significantly reducing production costs. All of the above require pharmaceutical CMO enterprises to have strong technological reserves and a research and development team with continuous innovation capabilities.

From this perspective, due to the peak period of patent drug expiration from 2013 to 2020, the next five years will also be another major opportunity for the development of the pharmaceutical intermediate industry.