It is expected that the scale of China's nuclear medicine market will grow from 5 billion yuan to 26 billion yuan at a CAGR of 26.6% from 2023 to 2030.
Zhittong Finance and Economics APP learned that Ping An Securities released a research report stating that as of July 4, 2024, 88 new radioactive drugs have been approved and marketed globally, only 18 of which are used for treatment. Since 2021, China's policies have given strong support to the development of the nuclear medicine industry from various aspects such as isotope security, new drug evaluation and approval, and construction of nuclear medicine departments, which is expected to promote the development of the nuclear medicine industry. The unique diagnostic and therapeutic advantages of nuclear medicine combined with outstanding clinical and market performance of already marketed nuclear medicines have led more and more domestic and international pharmaceutical companies to accelerate their layout in the nuclear medicine track through acquisitions in recent years. It is expected that the scale of China's nuclear medicine market will grow from 5 billion yuan to 26 billion yuan at a CAGR of 26.6% from 2023 to 2030.
Ping An Securities' view is as follows:
Nuclear medicine has multiple advantages in clinical diagnosis and treatment.
Radioactive nuclides refer to unstable atomic nuclei that spontaneously emit ionizing radiation upon decay into other nuclei. Special preparations made from them are called radiopharmaceuticals or nuclear drugs. Nuclear drugs can be divided into diagnostic nuclear drugs and therapeutic nuclear drugs according to their clinical application. When used for treatment, nuclear medicines have the advantages of integrated diagnosis and treatment, resistance to drug resistance, and targeted therapy. When used for diagnosis, nuclear medicine imaging can not only display the anatomical structure of the human body like other imaging methods, but also provide biochemical functional information, and has the advantages of high sensitivity, discovery of small lesions, and wide imaging range.
The development of nuclear medicine at home and abroad is still booming, and therapeutic nuclear drugs will drive market expansion.
As of July 4, 2024, 88 new radioactive drugs have been approved and marketed globally, only 18 of which are used for treatment. The global nuclear medicine market is expected to grow at a CAGR of 18% from 2022 to 2028 to approximately 18.7 billion U.S. dollars, of which the scale of the therapeutic nuclear medicine market is expected to grow at a CAGR of 38.5% to approximately 8.6 billion U.S. dollars, accounting for 45.8% of the global nuclear medicine market. The rapid growth of the therapeutic nuclear medicine market is mainly due to the strong demand for already marketed products and the continuous expansion of indications as well as the continuous launch of new drugs; while with the listing of therapeutic nuclear medicines, more diagnostic and disease tracking needs will arise, and the scale of the diagnostic nuclear medicine market will also maintain rapid growth. Since 2021, China's policies have given strong support to the development of the nuclear medicine industry from various aspects such as isotope security, new drug evaluation and approval, and construction of nuclear medicine departments, which is expected to promote the development of the nuclear medicine industry. It is expected that the scale of China's nuclear medicine market will grow from 5 billion yuan to 26 billion yuan at a CAGR of 26.6% from 2023 to 2030.
Nuclear medicine has extremely high resource, capital, and compliance barriers, and ultimately becomes a competition among large companies.
The nuclear medicine industry chain includes three major links: the production of nuclear isotopes, the research and production of nuclear drugs, and the distribution and application of nuclear drugs. 1) Nuclear isotope production stage: Reactor irradiation is the main production method for radioactive isotopes, with extremely high funding, construction, and approval barriers, so upstream nuclear isotope suppliers have a strong voice downstream. It is expected that two large power reactors for medical use will either be shut down or affect global nuclear isotope supply in 2024; 2) Research and production of nuclear drugs: new types of nuclear medicine such as radioligand therapy (RDC/RLT) have complex structures, and the research and production process of nuclear medicine requires approval from multiple departments, resulting in high thresholds; 3) Distribution and application: since nuclear isotopes have physical half-life, high-density production and distribution networks are required for timely delivery. However, production and distribution networks have high construction costs and long construction periods, so companies with early-mover advantages are apparent. Based on the highly restrictive nature of each link in the nuclear medicine industry chain, this bank believes that nuclear medicine companies that have laid out the entire industry chain have a clear competitive advantage.
Investment advice: The unique diagnostic and therapeutic advantages of nuclear medicine combined with outstanding clinical and market performance of already marketed nuclear medicines have led more and more domestic and international pharmaceutical companies to accelerate their layout in the nuclear medicine track through acquisitions in recent years. It is recommended to pay attention to: 1) Companies with complete industry chain layout, such as Yantai Dongcheng Biochemicals (002675.SZ), Circ (01763), and others; 2) Enterprises that are leading in the research and development of new nuclear drugs, including Grandpharma (00512), Jiangsu Hengrui Pharmaceuticals (600276.SH), and AccuraGen (06990), etc.
Risk warning: 1) Risk of clinical trial failure for innovative nuclear medicine; 2) High homogeneity of the target points of nuclear drug pipelines under research; 3) Risk of non-compliance evaluation for innovative nuclear medicine.