[Fine Chemicals] Garden Biology research report: global vitamin D3 leader, vertical and horizontal expansion opens up the growth ceiling

[Fine Chemicals] Garden Biology research report: global vitamin D3 leader, vertical and horizontal expansion opens up the growth ceiling

The company has a long-term partnership with DSM, and together they are accelerating the market rollout of high-value-added products. Thanks to its strong product quality and supply capability, the company earned DSM's recognition and got into its raw-material procurement channel, which speaks well of its overall strength. In December 2016 the company signed a long-term purchase agreement with DSM for 25-hydroxyvitamin D3 raw material, under which DSM would buy 25-hydroxyvitamin D3 raw material from the company long-term from January 2017 to January 2027. The two strong players joining forces, on one hand, gives solid support for the company's product output, and on the other hand will speed up the market rollout of high-value-added products such as 25-hydroxyvitamin D3.

3.1.4 Fully active vitamin D3 enters the API + formulation field

Further completing the downstream vitamin D3 industry chain and moving into the downstream pharmaceutical field. Under the "vertical" development strategy, the company relies on its mature production technology for 25-hydroxyvitamin D3 and its high market recognition, and makes full use of the last step on the production side — fully active vitamin products — to break out of its existing pharmaceutical intermediate business and enter the pharmaceutical field. With the two projects — calcitriol API and formulations — landing, the company has fully connected the upstream and downstream vitamin D3 industry chain, completing a core chain that runs from the most upstream raw material, crude lanolin, to the core intermediate NF-grade cholesterol, then to vitamin D3 and the high-value-added product 25-hydroxyvitamin D3, and finally to calcitriol-type APIs and calcitriol-type formulations.

Fully active vitamin D3 is one of the first-choice drugs for treating osteoporosis. Anti-osteoporosis drugs fall into four main categories: basic supplements (calcium, vitamin D, etc.), calcium absorption promoters (calcitriol), bone resorption inhibitors (bisphosphonates, calcitonin, estrogen, etc.), and bone formation promoters (teriparatide). The main ingredient of calcitriol-type drugs is 1α,25-hydroxyvitamin D3, which is fully active vitamin D3. Right now China's calcitriol-type drug market is mainly held by CP Pharmaceutical's "Gaisanchun" and Roche's "Rocaltrol" — the former is a domestically developed active vitamin D drug, the latter the world's earliest original drug, on the market for over thirty years.

In an aging society, osteoporosis is one of the most common diseases, and demand for osteoporosis drugs is growing fast. Because osteoporosis is closely tied to age, as the share of elderly people in China grows, the prevalence of osteoporosis keeps rising. According to the health commission's epidemiological survey of osteoporosis among Chinese residents, the prevalence among people over 65 is 32%, with the rate among women as high as 51.6%. The large number of osteoporosis patients gives the treatment drug market enormous room, keeping China's osteoporosis drug market growing fast. Data from Guanyan Tianxia shows that in 2018 the total osteoporosis drug market was 21.9 billion yuan, up 8.42% year on year. It is expected that by 2025 China's osteoporosis drug market will reach 43.7 billion yuan, a CAGR of 10.4% from 2019 to 2025.