Analysis on market scale and industry barriers of China's pharmaceutical manufacturing industry in 2021

Overview and development trend of antibiotic intermediate industry:Antibiotic intermediates belong to pharmaceutical intermediates. Pharmaceutical intermediates are some chemical raw materials or chemical products used in the pharmaceutical synthesis process. They are key starting materials for the production of chemical APIs. As an important part of fine chemicals, pharmaceutical intermediates have gradually become the focus and core of chemical industry development in various countries. Pharmaceutical intermediates can be divided into antibiotic drug intermediates, anti-cancer pharmaceutical intermediates, antipyretic and analgesic pharmaceutical intermediates and cardiovascular system pharmaceutical intermediates according to their application fields.

The pharmaceutical intermediates of antibiotic drugs mainly include erythromycin thiocyanate, 7-ACA, 6-APA, 7-ADCA, D-7ACA, penicillin products (penicillin G potassium, penicillin G sodium), etc. 7-ACA is the common intermediate of most cephalosporins, and 6-APA is the common intermediate of most penicillin derivatives (penicillin).

With the increasingly mature production technology of semi synthetic antibiotics and the gradual formation of production scale, raw materials such as cephalexin, cefazolin and cefradine have gradually replaced imports at the beginning of this century, which has greatly reduced the price of cephalosporins, further promoting and promoting the clinical application of cephalosporins. The basic structure of cephalosporins is 7-aminocephalosporanic acid (7-ACA), which has β- Characteristics of lactam, β- The parent nucleus of lactam antibiotics is divided into two series: 6-APA and 7-ACA. The first series are penicillin deep-processing products, the main products are ampicillin (sodium), amoxicillin and other varieties; The latter is a series of cephalosporin products, mainly including dozens of varieties such as cefazolin, cefoperazone, ceftriaxone, ceftazidime, cefotaxime, cefuroxime lipid, and cefodizime.

7-ACA, as an important intermediate for the production of cephalosporin semi synthetic antibodies, has developed maturely in the domestic market. In addition to Chuanning Biological, the enterprises with large-scale production of 7-ACA in China mainly include large pharmaceutical enterprises such as Jiankangyuan and Wichita. 6-APA is the mother nucleus of penicillin molecule and the key mother nucleus for the production of ampicillin (sodium) and amoxicillin semi synthetic penicillin. 6-APA is condensed with p-hydroxyphenylglycine to obtain hydroxyampicillin trihydrate (ampicillin).

Amoxicillin, as the main variety to replace penicillin, is a broad-spectrum semi synthetic penicillin, which can inhibit the synthesis of bacterial cell wall, making it quickly become spherical and broken and dissolved, so it is superior to penicillin and cephalosporin in terms of sterilization speed. China is the world's largest producer and exporter of penicillin. In the 1980s, because the penicillin manufacturers in China had not mastered the process of enzymatic cracking, they could only use conventional chemical cracking, which not only had low yield, but also caused serious environmental pollution. Therefore, the total output of 6-APA in China was only a few hundred tons at that time, and due to the unstable product quality, the export was less. As many domestic penicillin manufacturers gradually mastered the penicillin G potassium salt enzymatic cracking process, the yield of 6-APA also increased rapidly. After the 1990s, China's 6-APA production began to take a fast lane. According to the data released by the Chinese Society of Chemical Pharmaceutical Industry, in 2019, the total domestic 6-APA output was 36700 tons and the export was 2400 tons, which was at a historical high level.

Market Research and Investment Feasibility Study Report of China's Antibiotic Intermediates Industry from 2022 to 2028 released by CICC Enterprise Trust International Consulting

Analysis on the relationship between main intermediate products and downstream preparations

(1) Erythromycin thiocyanate:Erythromycin thiocyanate is an intermediate of erythromycin and its derivatives. It is mainly used in the production of macrolide drugs such as erythromycin, erythromycin tasteless, erythromycin ethylsuccinate, roxithromycin, azithromycin, clarithromycin, and telithromycin. Erythromycin thiocyanate can also be used as a veterinary drug for gram-positive bacteria and mycoplasma infection. It is widely used abroad as an "animal growth promoter".

At present, China has become the world's largest producer of macrolide antibiotic APIs, including erythromycin thiocyanate, an intermediate of semi synthetic erythromycin. According to statistics, since the first macrolide antibiotic erythromycin came out in 1952, more than 50 kinds of such drugs have been used in the world, and there are about 16 kinds of clinical use in China. This class of antibiotics acts on 50S ribosomal subunits of sensitive bacteria and inhibits protein synthesis of bacteria by blocking peptide transfer and (or) mRNA translocation. In clinical practice, the reason why bacteria are resistant to macrolides is the post transcription methylation of an adenine residue of 50S ribosomal RNA, which leads to bacterial resistance to macrolides. Because the chemical structure of this kind of antibiotics is similar, the cross resistance relationship is relatively close.

This kind of medicine is generally bacteriostatic, not bactericidal, but β- Mycoplasma, chlamydia and campylobacter, which are uncontrollable by lactam antibiotics, have specific effects. They are the first choice for the treatment of Legionella disease, and can also treat Toxoplasma infection in AIDS patients. In addition to antibacterial effects, many macrolides with new activities have been found, such as antiparasitic, antiviral, anti-tumor and enzyme inhibitors. Another characteristic of this kind of medicine is that although the blood concentration is not high, the tissue distribution and intracellular migration are good, so it is widely used in clinical.

According to the Guiding Principles for the Clinical Application of Antibacterial Drugs issued by the Health and Family Planning Commission in 2015, macrolides currently used include erythromycin, midecamycin, acetylmidecamycin, spiramycin, acetylspiramycin, josamycin, columnar leukomycin and other macrolides and new macrolides such as azithromycin, clarithromycin, roxithromycin. These drugs have antibacterial activity against gram-positive bacteria, anaerobes, mycoplasma and chlamydia. Azithromycin, clarithromycin, roxithromycin, etc. have enhanced antimicrobial activity against Haemophilus influenzae, Mycoplasma pneumoniae or Chlamydia pneumoniae, improved oral bioavailability, reduced dosage, fewer adverse reactions, and expanded clinical indications. Erythromycin thiocyanate, as the mother nucleus for the production of macrolides, is mainly used to synthesize erythromycin, erythromycin ethylsuccinate, azithromycin, roxithromycin, dirithromycin, clarithromycin and other erythromycin derivatives, which has an irreplaceable role. With the good development of this series of products and the continuous innovation of new derivatives, erythromycin thiocyanate, as an irreplaceable intermediate raw material, has a broad market prospect.

Erythromycin thiocyanate has been mostly used for export since 90 years, and India accounts for 70% of the main export countries. In recent years, with the booming domestic demand, some of them are sold domestically. Erythromycin thiocyanate market has a large rigid demand, small fluctuations in the short term, and has maintained a stable and rapid growth.

Different from other APIs, erythromycin thiocyanate is a product obtained by pure fermentation and cannot be artificially synthesized. New enterprises need to face a high threshold of access. About 60% of erythromycin thiocyanate produced domestically is used for export. Among exporting countries, India accounts for about 70%, with the highest share. In 2011, the production capacity of erythromycin thiocyanate in China has exceeded 10000 tons, but due to the impact of anti policy and environmental pressure, many manufacturers have withdrawn from production in recent years. Yichang East Sunshine Pharmaceutical Co., Ltd. is currently the largest erythromycin thiocyanate producer in China, with a capacity of 4000 tons per year4. Yili Chuanning Biotechnology Co., Ltd. has a slightly lower capacity than the company. At present, Yili Chuanning Biotechnology Co., Ltd. has an annual output of more than 3000 tons per year.

At present, the global demand for erythromycin thiocyanate is about 9000 tons/year, and the market demand is still slightly greater than the supply in the short term, so the product price has also continued to rise since 2017, reaching a high point at the end of 2018; Since 2019, the price has been reduced to about 300 yuan/kg. Since December 2019, the price of erythromycin thiocyanate has gradually risen.

(2) Cephalosporin intermediate:Cephalosporin pharmaceutical intermediates belong to the upstream link of API, and do not need to be produced for approval and apply for batch number according to drug rules, benefiting from the steady development of the downstream antibiotic industry. Cephalosporin pharmaceutical intermediates are divided into cephalosporin nucleus intermediates and cephalosporin side chain intermediates. Different cephalosporin antibiotics are formed by the combination of different side chain intermediates with the C3 and C7 positions of the mother nucleus intermediates. The parent core intermediates are mainly divided into 7-ACA, 7-ADCA, D-7ACA, GCLE, etc. The side chain intermediates mainly include AE active ester, side chain acid active ester of cefixime, side chain acid active ester of ceftazidime, ammonium furan, etc. At present, most of the production of cephalosporin pharmaceutical intermediates in the world has been transferred to China. Ili Chuanning Biotechnology Co., Ltd. is one of the important manufacturers of cephalosporin parent nuclear intermediate 7-ACA in the industry.

Cephalosporins can be divided into five generations of products according to the age of their appearance and different pharmacological properties. Among them, the first generation products mainly include cefradine, cefazolin sodium, etc; The second generation products mainly include cefotiam, cefuroxime, etc; The third generation products mainly include cefoperazone sulbactam, cefoperazone tazobactam, etc; The fourth generation products mainly include cefepime, cefpirome, etc; The fifth generation products mainly include cefalolin axetil, etc. At this stage, the second and third generation products are still the mainstream and the dominant players in the market in China.

7-ACA is a key intermediate of cephalosporins and has become the leading role in the international antibiotic market. While almost all cephalosporins are semi synthetic products, that is, 7-ACA, the lysate of fermentation cephalosporin C, is condensed by adding chemical side chains, so 7-ACA is the key intermediate for the synthesis of cephalosporins. In 2018, the global demand was more than 6000 tons, and the domestic production capacity was close to 8200 tons. At present, Yili Chuanning Biotechnology Co., Ltd., 7-ACA, D-7ACA and 7-ADCA have a total production capacity of more than 3000 tons/year, which is the industry leader.

The 7-ACA industry is generally oversupplied. A new round of production expansion led to the 7-ACA price falling step by step before 2017, and it was at a historical low point in 2017. Later, the price rebounded. Since 2019, the 7-ACA price has fallen again, and it will gradually recover in 2020. At the same time, with the tightening of environmental protection policies, the small and medium-sized enterprises in the industry will be hit. Yili Chuanning Biotechnology Co., Ltd. has perfect environmental protection treatment facilities and capacity, and has advantages in scale and cost. On the whole, however, the situation of oversupply will not change significantly in the short term.

7-ADCA, also known as 7-aminodeacetoxycephalosporanic acid, is one of the three mother nuclei of traditional antibiotics. The original production process precursor of 7-ADCA is mainly penicillin industrial salt. 7-ADCA is an important intermediate of cephalosporins, one of the three mother nuclei of traditional cephalosporins, and an intermediate of cephalosporins, cefradine, cefadroxil and other antibiotics.

The sales volume of cephalosporins synthesized from 7-ADCA is higher than that of cephalosporins synthesized from 7-ACA. Before 2010, 7-ADCA was basically monopolized by Italian Antibioticos, Austria Biochemie and DSM. In recent ten years, China's 7-ADCA industry has begun to develop gradually, gradually forming a trend of replacing imports of 7-ADCA. Up to now, domestic companies such as Beide Pharmaceutical and Huabei Pharmaceutical have certain production capacity, but mainly for their own use.

In China, 7-ADCA is produced by chemical method with penicillin industrial salt as the starting material, which has high environmental treatment cost; After the water explosion accident in 2019, 7-ADCA was in short supply in China, and domestic manufacturers stopped quoting. During the reporting period, Yili Chuanning Biotechnology Co., Ltd. overcame the production technology of 7-ADCA by full process fermentation and enzymatic method through continuous technology research and development, and realized the mass production of 7-ADCA in 2020.

Since 2017, the market price of 7-ADCA has remained at a high level. In April 2019, the average market price was 465 yuan/kg. In April 2019, affected by the water explosion accident, manufacturers in the industry stopped production for safety inspection, resulting in a shortage of 7-ADCA supplies. The subsequent prices of 7-ADCA are expected to remain stable.

(3) Penicillin antibiotic intermediate 6-APA:Penicillin is the first anti infective drug in the world. Penicillin has been flourishing in the antibiotic market for a long time, and has become a first-line antibiotic widely used in the world. In recent years, the market of penicillin has shrunk relatively, but its role in clinical practice is irreplaceable, and the market prospect of penicillin APIs is still promising. In particular, with the implementation of the new medical reform and new community cooperative medical care and other beneficial policies, the country has begun to implement the basic drug system. Penicillin may become the first choice of clinical antibiotics at the grass-roots level by virtue of its price advantage, and the scale of penicillin chemical raw materials may be further expanded.

Penicillin is a kind of antibiotic. It refers to a kind of antibiotic that contains penicillane in the molecule extracted from penicillium culture medium, can destroy the cell wall of bacteria and play a bactericidal role in the reproductive period of bacterial cells. It is the first antibiotic that can treat human diseases. Penicillin can be divided into penicillin G, penicillin V, enzyme resistant penicillin, ampicillin, pseudomonas penicillin, etc. according to its characteristics. Among them, there are many kinds of penicillin G products, such as long-acting penicillin G, penicillin sodium, benzylpenicillin sodium, penicillin potassium, benzylpenicillin potassium, etc.

6-APA is an important intermediate for the production of semi synthetic penicillin antibiotics ampicillin (sodium) and amoxicillin, and is an important export variety. 6-APA intermediates are generally produced in an integrated way by biological fermentation, with large investment in the production process, large sewage treatment capacity, high environmental protection requirements, and current overcapacity. The National Catalogue for the Guidance of Industrial Restructuring restricts new enterprises from entering the industry, so 6-APA industry has high barriers.

At present, the market demand of 6-APA is about 30000 tons/year. Among domestic enterprises, the largest capacity is UL, which has a capacity of about 24000 tons/year. The capacity of Wichita is about 7000 tons/year, but it has not yet reached full capacity. 5. Yili Chuanning Biotechnology Co., Ltd. has an output of about 6700 tons/year, which is higher than Wichita. It is a major manufacturer in the industry.

The 6-APA market price has been in a fluctuating trend in history. Since June 2018, the product price has continued to decline from the high point. Until December 2019, the 6-APA price has recovered rapidly and will continue to rise in the short term; In the long run, as the fundamentals of oversupply in the 6-APA market have not been significantly improved, there is a risk of fluctuations in the product market price.

(4) Penicillin G potassium salt:Penicillin G potassium salt is also a kind of penicillin intermediate. Penicillin G potassium salt is the bulk drug of all penicillins and some cephalosporins. It can be used to synthesize 6-APA, 7-ADCA and other intermediates or directly produce penicillin potassium, penicillin sodium and clavulanate potassium. It is a key link in the antibiotic industry and plays an extremely important role as a bridge in the antibiotic industry.

China is a super producer of penicillin G potassium salt. The production capacity of penicillin G potassium salt has gradually increased from about one-third of the world's total production capacity in the early 1990s to most of the world's production capacity at present. The production of penicillin G potassium salt accounts for 75% of the world's total production capacity. Among the downstream products of penicillin G potassium salt, about 50% are used as raw materials for 6-APA, and nearly 30% are used for export. At present, the global demand for penicillin industrial salt is about 60000 tons/year to 70000 tons/year. At present, there are many domestic manufacturers, such as Henan Huaxing, Shiyao Group, North China Pharmaceutical, Harbin Pharmaceutical Group, United Laboratories, etc. The company's capacity accounts for about 5% of the total capacity of the industry. The overall capacity of the industry is greater than the demand. Therefore, the product price has continued to decline in recent years. The price in October 2019 has been close to the historical low point. Since December 2019, Affected by the novel coronavirus epidemic, the market price of penicillin G potassium salt continued to rise.