China CROs in Global Landscape
China’s contract research organizations (CROs) are developing rapidly, partly demonstrated by its rising revenue. Three China-based CROs—Wuxi AppTec, Pharmaron, and AsymChem—are ranked among the top 10 CROs in terms of 2022’s revenue. In the previous years, another Chinese CRO giant TigerMed usually took the third place domestically, but AsymChem zoom past it in 2022 because of the soaring income generated by COVID-19 drugs.
Table 1: Top 10 CROs with the highest revenues in 2022 | |||||
CRO | Head- quarters | 2022 Revenue ($mn) | Revenue YoY Growth | 2022 Net Profit ($mn) | Net Profit YoY Growth |
The U.S. | 15% | 6,950 | -9.94% | ||
The U.S. | -7.7% | 1,280 | -46.22% | ||
The U.S. | 7.8% | 1,091 | 12.94% | ||
Ireland | 45.4% | 505.3 | 229.87% | ||
China | 71.8% | 1,174 | 103% | ||
The U.S. | 5.8% | 267 | 13.62% | ||
The U.S. | 12.31% | 486.2 | 24.36% | ||
China | 37.9% | 194 | 17.2% | ||
The U.S. | 27.8% | 245.4 | 34.98% | ||
China | 120.85% | 288 | 135.77% | ||
China | 35.9% | 394 | 39.3 | ||
Despite a few giants, China’s CROs in general take up a fairly small share of the global market. In 2021, The top 3 CROs in China, Tigermed, Wuxi AppTec, and Pharmaron account for 1.3%, 0.5%, and 0.3% market shares respectively. Bigger pieces are taken by multinational corporations (MNCs) headquartered in the U.S. IQVIA, LabCorp, and ICON took the lead with market shares of 16.3%, 12.5%, and 11.8%.1
Figure 1: 2021 Global CRO market share. Source: Huaon.com
The good news is that the whole pie is expected to become bigger. From 2017 to 2021, the global CRO market grew continuously. So did each segment of CRO services—drug discovery, pre-clinical study, and clinical study. According to Frost & Sullivan, the growing momentum is predicted to keep on.
Figure 2: Global CRO market size (US$ bn). Source: Frost & Sullivan
As the following figure shows, both the size of China CRO market and its proportion in the world have been increasing since 2017. In 2021, China’s CRO market reached 64.77 billion yuan, taking up 13.2% of the global market.2 By Frost & Sullivan’s estimation, both the Chinese market and its percentage in the global market will continue to climb up in the coming years.
Figure 3: China CRO market from 2017 to 2026E (RMB bn). Source: Frost & Sullivan
China CROs’ Development Trajectory and Service Capability
Chinese CROs started off later than those headquartered in the Western world. Originated in the U.S. in the 1970s, CROs expanded rapidly in 1980s in the U.S., Europe, and Japan, and became quite mature in the late 1990s.
While for China, it was not until 1996 that the country saw the first CRO, the U.S. company MDS Pharmaceutical Services, on its land. In the next year, Quintiles set up its Beijing office. Afterwards, other international CROs also built offices in China.
China’s local CROs emerged at the beginning of the 21st century. The year of 2000 witnessed the birth of Wuxi AppTec. Afterwards, a crop of Chinese domestic CROs popped up and developed fast since China started to permit clinical trial sponsors to entrust trial-related tasks to CROs, as stated in the first version of Good Clinical Practice (GCP) that took effective in 2003.
Despite rapid growth, most Chinese CROs are not as developed as their multinational peers, such as IQVIA, LabCorp, and ICON. Big-sized Chinese CROs, including Wuxi AppTec, Pharmaron, and Tigermed, have reached out to other parts of the world and diversified their service portfolios. Small-and-medium-sized Chinese CROs are not so developed in their research capabilities, some providing regulatory affair services only.
The following table includes the major Chinese players in the CRO industry, with their revenue changes and brief summaries of their service scope.
Table 2: Major Chinese CROs 1, 2, 3, and 4 refer to service scopes: 1. Drug discovery; 2. Pre-clinical study; 3. Clinical study; 4. Regulatory affair | ||||||||
CRO | 2022 Revenue (RMB mm） | 2021 Revenue (RMB mm） | YoY Growth | Service | 1 | 2 | 3 | 4 |
39,355 | 22,902 | 71.80% | Biology; small molecule (CRDMO); drug R&D and medical device testing; clinical research; oligonucleotide (CRDMO); peptide (CRDMO); cell therapy and gene therapy, etc. | ☑️ | ☑️ | ☑️ | ||
10,266 | 7,444 | 37.90% | Laboratory chemistry; biosciences; chemistry, manufacturing & control (CMC); safety assessment; radiolabelled sciences; clinical development; biologics, cell & gene therapy, etc. | ☑️ | ☑️ | ☑️ | ||
7,086 | 5,214 | 63.30% | Pre-clinical development; clinical development; real-world study; medical imaging; pharmacovigilance; medical translation; quality assurance; GMP consulting, etc. | ☑️ | ☑️ | ☑️ | ☑️ | |
10,230 | 4,632 | 120.90% | R&D and cGMP production of advanced intermediates, APIs, formulations, as well as clinical research services; regulatory affairs, etc. | ☑️ | ☑️ | |||
7,035 | 3,105 | 126.55% | Small molecule DS/DP CDMO; gene & cell therapy CDMO; large molecule CDMO services; client-oriented program management; global licensing, etc. | ☑️ | ☑️ | ☑️ | ||
1,327 | 1,691 | -21.54% | Discovery chemistry; biology & pharmacology; DMPK/exploratory tox; discovery biologics; biologics CMC, etc. | ☑️ | ☑️ | ☑️ | ||
2,268 | 1,517 | 49.54% | Research animals & models; discovery services; R&D and production; safety assessment; clinical trials; laboratory services; pharmacovigilance, etc. | ☑️ | ☑️ | ☑️ | ☑️ | |
1,659 | 1,167 | 42.12% | Drug discovery; pharmaceutical research; pre-clinical research, etc. | ☑️ | ☑️ | ☑️ | ||
424 | 324 | 30.68% | Clinical research; pre-clinical study; drug evaluation; technology transfer; data management; MAH and CDMO; NMPA & FDA application, etc. | ☑️ | ☑️ | ☑️ | ||
291 | 255 | 14.26% | CDMO services across plasmid, adeno-associated virus, lentivirus, adenovirus, oncolytic viruses, and cell therapy products, etc. | ☑️ | ☑️ | |||
Not revealed | Clinical operations for new drug development from phase I to Ⅳ studies; clinical sciences, regulatory affairs and medical affairs; quality management, training and the 3rd party audit; value added services | ☑️ | ||||||
Not revealed | Biometrics; clinical operations; technology; medical affairs; drug safety; medical writing; regulatory affairs; quality & compliance; pharmacology & toxicology; scientific & strategic consulting | ☑️ | ☑️ | |||||
Overall, Chinese CROs have been strengthening their services in three aspects:
Deploying more resources on knowledge- and technology- based value-added services;
Expanding along the value chain to provide one-stop services, covering drug discovery, pre-clinical study, pre-approval clinical study, filing & registration, as well as post-approval regulatory affairs and phase IV clinical trials.
Enhancing the ties with local universities, R&D institutes, hospitals, and pharma companies for more talents, government funds, and clinical trial resources.
Given the international teamwork and progressing capabilities of the leading Chinese CROs, they can be exceptional partners of overseas pharmaceutical companies which aim to acquire China’s marketing authorization for their new drugs.
Contact BaiPharm if you’d like to know more about Chinese CROs.
