Introduction
Cell culture is one of major techniques in the life sciences as it provides a platform to investigate the biology, biochemistry, physiology and metabolism of wild-type cells and diseased cells. Among all the steps, the most important and crucial one is selecting appropriate growth medium for the in vitro cultivation.
Cell culture media has developed more than one hundred years since the first instance of an in vitro animal culture occurred in 1882. In 1919, Chinese hamster ovary (CHO) cells have been first used for lab purposes by Professor Hu when mice and rats were scarce as experimental animals. Then some hamsters were smuggled out of China and CHO cells became the most commonly used lab cells. However, affected by technology and other factors, Chinese companies have not established its own cell culture medium industry before 21st century. With the changing international situation, Chinese government gradually pays more attention on the domestic substitution of biopharmaceutical industry. After a series of policies including Guiding Opinions of the General Office of the State Council on Promoting the Sound Development of the Medical Industry and the 13th Five-Year Plan, Chinese cell culture medium industry then has developed steadily driven by the growing demand for biopharmaceuticals. During the pandemic, Chinese market grew more rapidly and prepared to catch up with foreign players.
Market Overview
Cell culture media is key to successful manufacture of any cell-based biologic. So cell culture media is the upstream of biopharma enterprises with the product portfolio covering mAb, vaccine, gene therapy, cell therapy and other related products. Academic institutes or hospitals are also its users. Legend Biotech (Chinese: 传奇生物), Sinovac Biotech (Chinese: 科兴生物), Remegen (Chinese: 荣昌生物), WuXi Biologics (Chinese: 药明生物) are the corresponding examples. Media composition providers, including amino acids, carbohydrates, vitamins, inorganic salts, glucose, and animal-derived serum, are the upstream of cell culture media industry. As medium components vary based on the types of media, upstream enterprises are different in each segment. For example, TianHang Biotech (Chinese: 天杭生物) and MinHai Biotech (Chinese: 民海生物) are providers of fetal bovine serum medium.
Biopharma enterprises highly stick to cell culture media suppliers as culture media variation impacts on product yield and quality. Biologics manufacturing requires close process control, so media recipe and consistent manufacturing processes that have developed for decades are critical assets for cell culture media companies. Clients will choose companies with higher production consistency and quality. And when they achieve commercialization, medium change is categorized as major changes that require re-certification. Consequently, the market now favors oligopoly with a few foreign companies occupying most of the market share. In the middle to high-end markets, such as cell culture medium for protein, antibody, or CGT products, the industrial concentration is more prominent. Three industry leaders Thermofisher, Merck, and Hyclone account for nearly 90% of total global market share.
Although domestic market is highly dependent on export cell culture media, with more than a decade in product development and upgrade, domestic companies start to build up a presence. The proportion of domestic media is increasing each year, from 19.2% in 2017 to 33.7% in 2021. This ratio has witnessed rapid growth particularly during pandemic period. On the demand side, the mass production of COVID-19 vaccines has led to shortages of cell culture media globally. On the supply side, affected by international logistics and political factors, biopharma companies took longer lead time and higher costs for export media. So the demand for domestic cell culture media soared. The localization rate has increased by 13.3% from 2019 to 2021, compared to only 1.2% increase from 2017 to 2019. As for export prices, commonly the average price of domestic culture media remains around USD 20 to 40 per kilogram, compared to USD 120 per kilogram of foreign culture media. During the pandemic, the average price has increased to USD 40 to 60 per kilogram driven by large quantities of vaccine. Even now situation has improved overseas, the average export price and quantity of domestic culture media yield the pre-pandemic period.
Many Chinese companies have participated in the domestic substitution process and several have made considerable breakthroughs. The first powerful player is OPM Biosciences (Chinese: 奥浦迈), an integrated service platform of cell culture solution offers over 100 products such as ready-to-use proprietary commercial media and tailored custom media. Middle to high-end cell culture media such as CHO or HEK293 cell culture media are OPM's target business. OPM has achieved the largest market share in culture media for protein/antibody drug among domestic companies. One of OPM's customized media can dramatically improve viable cell density (VCD) and cell viability (CV). The antibody expression level achieves 1.7 times greater than similar export culture media, which shows the world-leading performance and quality.
JSBio (Chinese: 健顺生物), the subsidiary of Thousand Oaks, (Chinese: 澳斯康) is also a key contributor in domestic substitution. It offers a wide range of culture media as well as CDMO service. Apart from rich product portfolios, production facility dramatically increases JSBio's competitiveness. JSBio is one of the few teams in China that has a complete CMC production and operation system. Its Lanzhou Cell Culture Media Plant 1 (CCM1) operated since 2011 spans 3,000 square meters. Haimen Cell Culture Media Plant 2 (CCM2) spanning 78 acres is the world's largest automatic serum-free cell cultural production facility. With large-scale facilities, JSBio owns the capacity to produce tens of millions of liters of cell culture media each year.
Duoning Biotech (Chinese: 多宁生物) is the only Chinese domestic bioprocess solutions provider whose product portfolio covered all major steps of the bioprocess, from the upstream steps that include cell thawing and cell culture, to the downstream steps that include refined purification and filtration. Among all Chinese domestic cell culture media providers, Duoning Biotech ranks first as regard to the number of cell culture media used in antibody and CGT projects that entered into the BLA stage and commercialization stage.
Other main culture media suppliers include Acro Biosystems (Chinese: 百普赛斯), Sino Biological (Chinese: 义翘神州), Quacell Biotech (Chinese: 康晟生物), Medium Bank (Chinese: 迈邦生物), Womei Biology (Chinese: 沃美生物), Basal Media (Chinese: 源培生物), BioEngine (Chinese: 倍谙基) and other companies.
Overall, as regard to timeliness and willingness, domestic media companies have greater advantage than foreign companies. On the one hand, domestic media companies can directly connect with clients and timely address clients' demands even during pandemic period. The shorter lead time also attracts clients. As for customized media, OPM Biosciences's delivery time is two to four weeks, shorter than export media's three months. On the other hand, the price of domestic media is significantly lower than export media. Under the growing cost pressures caused by centralized procurement of drugs, downstream clients now choose to procure from domestic media companies with cost advantages.
Future Trend
The key pain point in cell culture media industry lies in the large scale of production. The competition between marketed products concentrates on the efficiency and cost of production process. Therefore, to compete with foreign players, Chinese companies are expected to overcome these challenges and some opportunities or strategies exist.
Supportive policy and abundant capital
As Chinese companies are relatively new in media industry, the lack of technology and experience hinder the industry development a lot. Up-front costs in production line equipment are also considerable. However, after the 13(th) Five-Year-Plan, many supportive policies including preferential enterprise income tax, individual income tax and VAT rates are adopted, along with favor from capital market. Meanwhile, many regional governments are striving to attract biopharma enterprises and develop the industry by establishing BPIPs and introducing related incentives, including subsidies for early-stage R&D expenses, the cost of obtaining international certifications and industrialization projects. With emerging overseas talents, expanded team, and abundant capital, companies are allowed to break the R&D threshold and continue to invest in technology improvement. For example, JSBio (Chinese: 健顺生物) launches“integrated cost control program” which enables high-efficiency and low-cost production capacity. It also builds a large-scale production base to reduce costs.
Development and Introduction of new product
In addition to cost and quality control, the introduction of new technology enables companies find the less competitive segment. Production processes is of increasing complexity and even subtle changes in the active components or nutritional components can alter cellular behavior and therefore the overall process performance. Now the biomanufacturing industry is evolving from a standard batch processing paradigm to a more continuous operation supported by inline sensors and process analytics to enable real-time product release. Currently many companies start to introduce AI in bioprocess, which can potentially detect patterns in datasets that are difficult to observe for an operator or process chemist. For example, Great Bay Bio AI Pharmaceutical (Chinese: 大湾生物), a leading AI biotechnology company dedicated to big data-driven CMC (Chemistry Manufacturing and Controls) development of innovative biologics. Its AI-enabled platform for culture media development AlfaMedX uses AI algorithms to build media formulations on prediction models, substantially reducing development time and cost. Compared to commercial media, protein expression improves by more than 30%.
Horizontal and vertical synergy effect
To stay competitive, cell culture media companies have no choice but to be aggressive in their pursuit of external innovation. Just as Duoning Biotech (Chinese: 多宁生物)'s CEO said, “ the upstream of pharmaceuticals is highly dispersed. Technological barriers and limited ceiling exist in each sector. So to build a one-stop service platform system cannot merely count on independent research capability. Strong merge and acquisition capability to prolong service chains and achieve economies of scale is important as well ”. From 2019, Duoning has leveraged strategic acquisitions to broaden its product and service portfolio, enhance technological capabilities and expand sales channels. For example, it acquired and integrated upstream Qizhi Bioengineering (Chinese: 奇志生物) to enter into bioreactor area, Lianghei Technology (Chinese: 亮黑科技) to enter into disposable area.
Apart from horizontal synergy, some cell culture media companies have also achieved vertical synergy by introducing CDMO, the downstream business. For example, OPM Biosciences (Chinese: 奥浦迈) has built synergy between its CDMO business and cell culture media business. While providing cell culture media for clients, it can introduce its CDMO services, technical strengths or manufacturing infrastructure. Similarly, while offering CDMO services, it can pitch its cell culture media products, thereby transforming CDMO clients into cell culture media clients.
Conclusion
Biopharma industry increasingly relies on living cells and other biological products. As China's biopharma industry is striving to be at the global forefront, it is more important than ever to maximize the therapeutic quality of cellular starting materials, particularly the cell culture media within which these cells will be cultured. EqualOcean believes more domestic cell culture media companies will mark on the global stage in this conducive ecosystem. Domestic substitution is an irreversible trend.