Citi’s new Super-Sector analysis identifies five themes that could reshape the future of the global healthcare sector, namely:
- Gene therapy:
- cell therapy
- artificial organs
- AI drug development.
Commercialization of these themes in China looks promising, the Citi report says, supported both by government policies as well as capital investments. By comparing leading Chinese companies in these areas with their overseas counterparts, the full report argues that with enhanced tech advantages Chinese companies can in turn transform the global market. The themes were chosen based on their total addressable market, primary-market funding and technology breakthroughs in therapeutics.
Primary-market financing for the five segments has leapt by >70% CAGR since 2015. And in China’s buoyant VC/PE investment market, capital has been flowing into gene therapy, siRNA, cell therapy, artificial organs, and AI drug development sub-segments since 2013. Their share in China’s total healthcare financing surged to 21% in 2021 from 1.4% in 2013.
Additionally, the government has introduced supportive policies, which tend to bode well for faster regulatory approvals and municipal government endorsements. Affordability in these emerging areas is also expected to improve as more cities introduce secondary payment structures.
China healthcare primary market financing structure and trend
Source: Citi Research, Pharmcube
Supportive policies and improving affordability should give a fillip to the five themes, says the Citi report.
Along with public medical insurance, which has broad coverage (97% of China’s total population), the widely introduced Huiminbao (government-backed, urban customized health insurance underwritten by commercial insurance companies) now provides extra coverage to participants for more expensive therapeutics.
The full report examines in depth each of the five themes including the scientific context and background along with greater detail on financing and several company profiles.
Please read it here China Healthcare - Five Emerging Themes Set to Shake Up Sector
Citi Global Insights (CGI) is Citi’s premier non-independent thought leadership curation. It is not investment research; however, it may contain thematic content previously expressed in an Independent Research report. For the full CGI disclosure, click here.