On March 4, the concept of assisted reproduction sector rose strongly. It soared by more than 5% during the session, hitting a recent high. As of today’s close, it rose by 3.22%. In terms of individual stocks, Dajia Weikang, Hubei Goto Biopharm Co.Ltd(300966) 20% limit, Changjiangrunfa Health Industry Co.Ltd(002435) , C.Q.Pharmaceutical Holding Co.Ltd(000950) , Aurisco Pharmaceutical Co.Ltd(605116) , Berry Genomics Co.Ltd(000710) , Everjoy Health Group Co.Ltd(002162) and other 10% limit.
Market analysis this wave of changes may be related to this major positive factor. Many cities announced or planned to include reproductive assistive technology services in medical insurance reimbursement. For example, Beijing will include 16 assisted reproductive technologies such as artificial insemination and embryo transfer into medical insurance reimbursement, and the new deal will come into effect on March 26.
In fact, although the infertility rate is increasing in China, the penetration rate of assisted reproduction is low. Public data show that in 2018, the penetration rate of assisted reproductive services in China was only 7.0%, while that in the United States reached 30.2%.
If some assisted reproductive technology projects are included in medical insurance, it may help to improve the penetration of assisted reproductive services. Ping An Securities believes that the entry of assisted reproductive projects into medical insurance will accelerate the development of the industry, and the downstream medical service enterprises will take the lead in benefiting. China’s assisted reproductive drug market is still dominated by imports. If the drug market is intensively purchased in the future, it is expected to promote the reconstruction of the market competition pattern and bring opportunities to domestic pharmaceutical enterprises.
Assisted reproduction multi stock limit
On the 4th, the concept of assisted reproduction rose strongly. It soared by more than 5% in the session, hitting a recent high. As of the close, it rose as high as 3.22%. In terms of individual stocks, Dajia Weikang, Hubei Goto Biopharm Co.Ltd(300966) 20% limit, Changjiangrunfa Health Industry Co.Ltd(002435) , C.Q.Pharmaceutical Holding Co.Ltd(000950) , Aurisco Pharmaceutical Co.Ltd(605116) , Berry Genomics Co.Ltd(000710) , Everjoy Health Group Co.Ltd(002162) and other 10% limit.
Among them, Dajia Weikang and Everjoy Health Group Co.Ltd(002162) today both issued announcements of abnormal fluctuations in stock trading.
Dajia Weikang announced that the deviation of the closing price of the company’s shares for two consecutive trading days (March 3, 2022 and March 4, 2022) has reached 30%. There are no major events that should be disclosed but not disclosed about the company or major events in the planning stage.
Everjoy Health Group Co.Ltd(002162) announced that the trading price of the company’s shares had deviated by more than 20% in two consecutive trading days on March 2 and March 3, 2022. The information disclosed by the company in the early stage does not need to be corrected or supplemented.
In terms of news, recently, the Beijing Municipal Medical Insurance Bureau, the health commission and the human resources and Social Security Bureau jointly issued the notice on regulating and adjusting the price of some medical services, which included 16 assisted reproductive technologies such as artificial insemination and embryo transfer into Beijing medical insurance, which will take effect on March 26.
It is reported that the price of 63 medical services carried out by public medical institutions has been standardized and adjusted this time, including the unified pricing of 53 assisted reproductive technology projects such as in vitro fertilization and embryo culture, which basically covers the common technologies used by public medical institutions in Beijing to carry out assisted reproductive technology. Among them, 16 common assisted reproductive technology projects in outpatient treatment, such as intrauterine artificial insemination, embryo transfer and sperm optimal treatment, involving a wide population, necessary diagnosis and treatment, mature technology, safe and reliable technology, will be included in the category a reimbursement scope of medical insurance.
Ping An Securities pointed out that the projects included in the medical insurance include in vitro fertilization, embryo culture, blastocyst culture and other 16 projects. Two of them are IUI (artificial insemination), one is second-generation IVF, three are third-generation IVF, and the rest are embryo storage and other projects. After the inclusion of medical insurance, the prices of these 16 items have not changed from the previous ones. Assisted reproduction reflects the value of doctors’ technology and services, so the risk of price reduction is limited for the core technical services. At present, the average cost of IVF in a single cycle in China is about 3500045000 (excluding the third generation). This time, it has entered the medical insurance, and the medical insurance coverage is about 800011000 yuan. Recently, the state has frequent policies to encourage fertility, and in the future, assisted reproduction projects are expected to include medical insurance payment in more areas.
It is noteworthy that on September 15, 2021, the National Medical Insurance Bureau mentioned in its reply to the proposal on integrating the adjuvant treatment of “infertility” into the national medical insurance to improve population growth that the medical insurance department will provide qualified fertility support drugs, such as bromocriptine, triptorelin, clomiphene and other ovulation promoting drugs, as well as mature, safe and reliable technologies that the medical insurance can undertake Therapeutic assisted reproductive technology with controllable cost shall be included in the scope of medical insurance payment according to procedures.
In addition, Hunan Medical Insurance Bureau also announced that it would gradually include assisted reproductive technology into the scope of medical insurance payment. Recently, in response to a message from netizens, Hunan Medical Insurance Bureau said that it would gradually explore the therapeutic assisted reproductive technology with mature technology, safety and reliability and controllable cost that can be borne by medical insurance into the scope of medical insurance payment according to procedures.
Recently, many places have also timely issued relevant policies to promote fertility. Shanghai, Hebei, Henan, Tianjin, Guizhou, Anhui, Shaanxi, Shanxi and other 12 provinces and cities have issued the application plan of human assisted reproductive technology (20212025) (hereinafter referred to as the plan). All provinces and cities indicated in the plan that the number of human assisted reproductive service institutions should be increased.
Can the introduction of assisted reproductive technology into medical insurance be popularized? Wang Guangzhou, a researcher at the Institute of population and labor economics of the Chinese Academy of Social Sciences, predicts that it will be sooner or later for the “auxiliary medical care into medical insurance” to be rolled out across the country, just depending on the specific scope and strength. In addition, some institutional analysts pointed out that objectively, there may be pressure on medical insurance funds in many places, and the cost of assisted reproductive technology projects is not cheap. Therefore, if it is to be promoted to other places, some designated medical institutions may be designated for reimbursement.
Huge market potential
It is understood that assisted reproductive technology is an important treatment for infertility. The treatment of infertility mainly includes conventional drug treatment, surgery and human assisted reproductive technology (Art). Assisted reproductive technology refers to the technology of using medical aids to help infertile couples get pregnant, including artificial insemination, gamete transfer and in vitro fertilization embryo transfer (IVF-ET).
In May 2021, academician Qiao Jie of the Third Hospital of Peking University mentioned in an interview with the media that according to the latest monitoring data and survey results, the proportion of elderly pregnancies among pregnant women in China has risen to about 17%, and the infertility rate has increased from 15% in 2010 to about 18%.
However, the penetration rate of assisted reproduction in China is low. Public data show that in 2018, the penetration rate of assisted reproductive services in China was only 7.0%, while that in the United States reached 30.2%.
It is understood that at present, assisted reproductive projects are mostly self funded medical projects, which are expensive, and the inclusion of some assisted reproductive technology projects into medical insurance may help to improve the penetration of assisted reproductive services.
Ping An Securities believes that the entry of assisted reproductive projects into medical insurance will accelerate the development of the industry, and the downstream medical service enterprises will take the lead in benefiting. China’s assisted reproductive drug market is still dominated by imports. If the drug market is intensively purchased in the future, it is expected to promote the reconstruction of the market competition pattern and bring opportunities to domestic pharmaceutical enterprises.
Zhongtai Securities Co.Ltd(600918) said that at present, there are about 48.8 million infertile couples in China, while the current IVF penetration rate in China is only 7%. In the future, with the increase of public awareness, the improvement of service accessibility and the relaxation of Fertility Policies, it is estimated that the number of IVF egg collection cycles in China will reach 2.03 million in 2030, and the market scale will reach 106.9 billion yuan, which is 2-3 times larger than that at present.
Frost & Sullivan estimates that China’s assisted reproductive services market increased from 14 billion yuan in 2014 to 25.2 billion yuan in 2018, with a CAGR of 15.8%, and is expected to grow to 49.6 billion yuan in 2023.
From the perspective of industry chain, the ancillary reproductive industry can be divided into upstream (medical devices, laboratory reagents and biomedicine), middle reaches (providing Internet plus assisted reproductive services) and downstream (China / overseas assisted reproductive health institutions and derivatives services). At present, the relevant listed companies in the assisted reproductive sector cover infertility treatment, assisted reproductive gene technology, assisted reproductive medical services, progesterone drugs and other businesses.
It is reported that Hubei Goto Biopharm Co.Ltd(300966) is a company specializing in the R & D, production and sales of steroid starting materials and intermediates. Recently, Hubei Goto Biopharm Co.Ltd(300966) said on the investor interaction platform that some of the company’s products can be used by downstream manufacturers to produce sex hormone APIs and gynecological family planning drugs. Progesterone, the product of the company’s fund-raising project, can be extended downstream to produce progesterone and other APIs.
It is noteworthy that Hubei Goto Biopharm Co.Ltd(300966) pointed out that its fund-raising project “progesterone and intermediate Ba production and construction project” can reach an annual production capacity of 200 tons of progesterone after the completion of the project.
In addition, Dajia Weikang obtained the approval of the former Hunan Provincial Health and Family Planning Commission to set up Changsha Jiachen reproductive and genetic hospital, began to set foot in the field of reproductive hospitals, and cooperated with the provincial comprehensive top three hospitals in a close medical consortium to improve assisted reproductive services.
Dajia Weikang said on the interactive platform a few days ago that Jiachen hospital, a wholly-owned subsidiary, is currently in the preparation and construction stage of carrying out assisted reproduction business. It is required to operate for three years and apply for the review of level-3 specialized hospital. After passing the review of level-3 specialized hospital, it can apply for the implementation license of human assisted reproduction technology, IVF business with good growth rate and profitability can only be started after obtaining the license. Dajia Weikang recently opened a 20% limit, and its share price has nearly doubled since its low in January.
In terms of relevant genetic diagnosis, Berry Genomics Co.Ltd(000710) mainly provides reproductive health and genetic disease gene testing products and services covering the tertiary prevention of birth defects: the primary prevention field mainly carries out carrier screening gene testing before and during pregnancy, including spinal muscular atrophy (SMA) gene testing, fragile X syndrome carrier screening (FXS) Folate metabolism gene detection, genetic deafness gene detection, etc. at the same time, carry out “keyunan” preimplantation genetic detection (PGT) in the field of assisted reproduction.
In addition, recently Bgi Genomics Co.Ltd(300676) also said that in terms of reproductive health services, based on innovative independent detection platforms such as high-throughput sequencer, the company carried out basic research and clinical application services related to reproductive health from the perspective of three-level prevention and control of birth defects, covering all stages of pregnancy, pregnancy, newborn and children, Continue to promote the transformation of medical scientific research and technical achievements and the promotion of clinical application, in order to comprehensively contribute to the prevention and control of birth defects and improve children’s health. Among them, the company’s embryoseq gene testing products before embryo implantation can provide a reference basis for clinical selection of appropriate embryo implantation, improve the pregnancy rate after embryo implantation and reduce the risk of birth defects.
