Source：Stem cell Research Society

China has always attached great importance to the development of stem cell industry.

In 2015, China's Ministry of Science and Technology issued the "National Key Research and Development Plan of Stem cells and translational medicine key special implementation Plan" (draft for comment), the Ministry of Science and Technology will work with relevant departments to launch the national key research and development plan of "stem cells and translational medicine" key special pilot work to strengthen the investment and layout of stem cell foundation and transformation. In 2019, for the first time in China, gene therapy drugs and cell therapy drugs were written into the encouraged category catalogue of the Industrial Structure Adjustment Guidance Catalogue (2019 edition). China's current stem cell industry mainly includes stem cell therapy service business, stem cell storage business and stem cell pharmaceutical business. The size of China's stem cell medical market increased from 6.2 billion yuan in 2012 to 78.5 billion yuan in 2019, with a compound growth rate of 32.59%, much higher than the global growth rate.

At present, China has hundreds of millions of cardiovascular patients, diabetes patients, and tens of millions of Alzheimer's patients and blood tumor patients are waiting for more active and effective treatment. In the future, with the clear regulatory policy and the approval of related drugs, China's stem cell industry has huge market potential. By 2024, The market size of China's stem cell medical industry will exceed 130 billion yuan. It can be seen from the above that China's cell therapy industry is at the breaking point of successful commercialization and clinical benefits.

China's stem cell industry chain

After years of development, China's stem cell industry has formed a relatively complete stem cell industry chain. From upstream stem cell storage, midstream drug development to downstream clinical treatment. Among them, the upstream is the most mature part, and the middle and downstream still need to be further expanded. The relevant businesses are mainly concentrated in the upstream, while the middle and downstream businesses are currently mostly in the clinical trial stage or early market stage.

Upstream industry - stem cell collection and storage business

Upstream enterprises mainly take stem cell collection and storage business as the main body, which is the most basic and front-end business in the stem cell medical industry, and also the place where the capital gathers the most. Its main business model is the collection and storage of umbilical cord blood stem cells, umbilical cord mesenchymal stem cells, adipose stem cells, teeth, menstrual blood, amniotic membrane and other stem cells. Cord blood is currently used for hematopoietic stem cell transplantation in children. From the perspective of its income, the current domestic initial inspection fee is about 4500-6000 yuan, the annual storage fee is 500-800 yuan, and the gross profit margin can reach more than 70%. In addition to umbilical cord blood hematopoietic stem cell bank, umbilical cord mesenchymal stem cell bank has developed rapidly in recent years, such as Shenzhen comprehensive cell Bank and Shandong umbilical cord mesenchymal stem cell Bank.

Compared with umbilical cord blood stem cells, which are mainly used to treat blood and immune system diseases, umbilical cord mesenchymal stem cells have stronger medical application potential, which can differentiate into nerve cells, osteoblasts, chondrocytes, muscle cells and fat cells, etc., showing great application potential in cell therapy, tissue and organ repair and gene therapy. The storage of stem cells such as dental pulp, fat and menstrual blood is also in the ascends, while the technology and application of IPSC cell bank is still in the embryonic stage and needs to be tested by the market.

Midstream industry - stem cell technology research and development

Midstream enterprises mainly include all kinds of enterprises engaged in stem cell preparation, development of stem cell drugs and other stem cell technology and product research and development.

In the early days, companies in this field mainly focused on mesenchymal stem cell therapy technology, especially when stem cells were used as the third class of medical technology, the market mainly targeted at difficult diseases such as cerebral palsy, spinal cord injury, diabetes, cirrhosis and muscular dystrophy. Enterprises gain profits by providing stem cell technology systems to hospitals and charging technical services and transfer fees for technology use rights. At present, limited by national policies, such markets have basically shrunk, and only some dual-record projects remain in progress.

In recent years, with the popularity of iPSC and stem cell exosomes, some new technology companies based on iPSC and exosomes have begun to emerge, and a new wave of investment has followed and begun to enter this emerging field.

Downstream industry - stem cell health care

In theory, the downstream should be many large domestic third class hospitals, but because of the restrictions of national policies, the hospital can only carry out stem cell clinical research, and strict requirements for double filing, shall not charge patients. So far, the downstream stem cell industry chain is not smooth, and a complete industrial application chain cannot be formed.

In consumer applications, stem cells are mostly used in medical beauty and anti-aging care. Therefore, at present, downstream enterprises mainly focus on stem cell health care, mainly distributed in major cities in Beijing, Shanghai, Guangzhou and Shenzhen, as well as Boao in Hainan and Qinhuangdao in Hebei province, which have the advantage of pioneering and pioneering policies, usually in the form of packaging stem cell health care into some large health projects, or as a membership promotion of gift projects.

Other industries——Stem cell peripheral industry

In addition to the above industry chain formed based on stem cells themselves, due to the rapid development and application of stem cell-related technologies, the development of the stem cell industry is also combined with other industries to promote development.

Stem cell reagent industry

Stem cell reagents mainly refer to the reagents used around stem cell culture, detection, storage, etc. It is an indispensable tool in hot research and industrialization fields such as stem cells and cell therapy, and is expected to become the fastest growing market segment in the future.

Stem cell isolation and storage automation equipment

For example, the automatic cell intelligent system under Beike, the stem cell separation equipment AXP under Boya, the automatic low-temperature storage system BioArchive, and the automatic deep-temperature biological sample storage system BSN-600 under Yuanneng Biology.

Bioengineered materials industry

Stem cells are the cellular components of regenerative medicine, and the combination of stem cells and bioengineered materials is the cornerstone of the development of regenerative medicine. New bioengineered materials can also induce stem cells in the body to differentiate according to the needs of specific tissues and organs. Therefore, bioengineered materials are the support industry for the rapid development of the stem cell industry.

Cold chain transportation industry

The cold chain of stem cells is expected to become a strong subcategory in the future development of cold chain logistics, and the application scenarios of stem cell cold chain transport are wide, and they are just needed, including a number of efficient transportation and storage links requiring cold chain from stem cell collection to laboratory, and from laboratory to clinical.

Stem cell software development industry

Because stem cell preparation involves a long process and many links, stem cell companies usually complete intelligent software system management and development, and there are also some specialized small companies in this field. In the future, with the further intelligence and automation of stem cell culture and storage, the demand in this field will be quite strong.

Stem cell drug development

As of May 31, 2023, a total of 43 mesenchymal stem cell drug clinical trials of 29 companies in China have obtained the implied approval of the drug Review Center of the State Drug Administration. Among them, 18 new implied permits were added in 2022, doubling from 2021, and 2023 is expected to hit a new high.

Years of MSCS drug clinical trials implied approval

43 mesenchymal stem cell clinical trials in China involved 21 indications, among which the top six indications were: knee osteoarthritis (7), interstitial lung disease (5), graft-versus-host disease (4), acute respiratory distress syndrome (4), chronic acute liver failure (3), and ischemic stroke (3).

From the perspective of indications, the vast majority of drugs utilize the paracrine and immune regulatory functions of mesenchymal stem cells to treat ischemic injury, inflammation-related or autoimmune related diseases.

Shanghai ranked first with 13 projects (7 enterprises), followed by Beijing with 9 projects (6 enterprises), followed by Jiangsu, Tianjin and Guangdong. It can be seen that Shanghai and Beijing are the most active areas for stem cell drug research and development, and the Yangtze River Delta region, Beijing and Tianjin and Guangdong are the main areas for stem cell drug research and development in China.

Development trend of stem cell industry

With the continuation of stem cell research, the range of stem cells is becoming more and more extensive, regardless of constraints, in terms of industry development, there are the following trends:

Future direction - standardization of stem cell preparation system

Stem cell preparation refers to the process of collecting or thawing stem cells through multi-generation culture, expanding the number, and growing them into stem cells with certain activity. With the development of stem cell therapy applications, the market has further requirements for the quality of stem cell products, calling for the establishment of efficient and safe cell preparation systems.

At present, enterprises engaged in stem cell preparation are uneven in terms of technical level and product quality, different companies have different cell culture systems, and technical standards are not uniform, to a certain extent, to the healthy development of the industry has brought obstacles. Companies with safe, efficient and standardized stem cell preparation systems will win the future. In recent years, the establishment of a variety of stem cell industry standards and local standards, and the establishment of a large number of third-party testing institutions will help standardize the stem cell industry.

Development direction - mesenchymal stem cells, iPSC to be solved

In terms of global development trend and clinical application of stem cells in China, mesenchymal stem cells will undoubtedly be the focus of attention in the next decade.

Mesenchymal stem cells (MSCs) are undergoing record clinical trials as the basis for cell therapies, gene therapies, tissue-engineered products and combination products. The most common indications include orthopedic injury, graft-versus-host disease (GvHD), cardiovascular disease, autoimmune disease and liver disease, etc. Mesenchymal stem cell products are marketed in the European Union, Japan, Australia, Canada and South Korea.

As a new technology, iPSC industrial application is still in the early stage of development, and clinical safety is still the bottleneck of its transformation.

Service areas - special supplies and equipment for stem cells, fast cold chain logistics services, etc

The development of stem cell research and clinical applications has brought a huge market space for stem cell consumables, cell preparation equipment and other products. In addition, cross-regional cell transplantation and transportation are increasing, and the traditional logistics system cannot meet the needs of the transportation environment, and the demand for specialized medical logistics services is becoming more and more intense. Most of the enterprises in these fields still belong to the traditional fields in terms of production mode and sales mode, and have relatively mature business models. If the enterprises can innovate their business models in these fields and occupy the right to speak, they will win the future.

Industrial base - abundant cell resources

Stem cell repositories, due to license restrictions and high investment costs, will form industry thresholds to a certain extent in the future, hindering the entry of new entrants. In addition, the stem cell repository is not only the basis of the entire industry, but also has a huge profit margin in itself, and the profitability is very stable. Due to the scarcity of library resources, enterprises with library resources may form a certain stable advantage in the industry. It is also a direct source of cells for stem cell research, product preparation, and medical services. Especially in combination with the current reality in China, the annual newborn data continues to decline, and the source of perinatal stem cells will become a scarce resource in the future.

In the long term, the depth of stem cell research and application ultimately depends on the size of cell samples that can be used. On the other hand, the threshold for stem cell collection and storage is likely to continue to increase in the future, and enterprises that originally have cell bank licenses and cell bank entities will take the industry lead.

Resources and licensing - listing is king, channel is gold

With the clarity of the two paths of stem cell medicine pathway and stem cell health care technology, it will determine that in the next period of time, stem cell drug research and development is in the competition of burning money, who will obtain the first three Chinese stem cell drug marketing authorization, who will win the future.

At the same time, stem cell health technology is the source of cash flow for many current stem cell companies (most of which have no stored income), high-end customer resources are always scarce, so who occupies the high-end customer resources of the terminal, who can live better in 5-10 years.