The medical research service and biotech industry in China is growing rapidly, similar to the medical device space, with the players including domestic and multinational companies, at somewhere from 15% to 25% growth rates, depending on which subsector, says Ingrid Yin, a Managing Director and Senior Analyst for Oppenheimer &. Co. Inc.
“Compared with the U.S. biotech industry, China biotech is in the early stage of development. There are some companies that are making things along the lines of biosimilars,” she said. “China’s EPO market is much smaller than the U.S., which is billions of dollars in sales. In China, it’s still only hundreds of millions of dollars, though China has a much bigger population.”
Yin describes 3SBio Inc. (SSRX) as a dominant leader in China’s EPO market. She says as a domestic player, 3SBio has certain advantages in the marketplace due to its long-time presence. Yin also says the company is undervalued although it is growing above 20% revenuewise and has delivered strong quarterly performances.
“They know a lot of nephrologists and oncologists in the top hospitals offering dialysis services. They compete both on price and also entrenched relationships. They were one of the pioneering companies that educated doctors how to use EPO in both the anemia and the oncology setting,” she said. “3SBio is an entrenched player in that area. I mean, they still own more than 40% of the market share.”
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