Frost & Sullivan releases the 'White Paper on the Current Industry Situation and Future Development of China's Assisted Reproduction Sector'

Based on the latest population statistics, low fertility and aging have become one of the biggest grey rhinos facing China in the 21st century. In China, the importance attached to childbearing and population quality has risen to a national level; with the conclusion of the 'Two Sessions' in 2022, discussions on fertility issues continue to this day. Assisted reproductive technology refers to the use of medical techniques and methods to artificially manipulate gametes (sperm and eggs), zygotes (fertilized eggs), and embryos for the purpose of conception. With the development of technology, assisted reproduction has brought hope to infertile couples, while reproductive health testing is beneficial for reducing birth defects and achieving optimal birth outcomes.

The 'White Paper on the Current Industry Status and Future Development of China's Assisted Reproduction Industry' sorts out the current industry status, testing methods, technological development, significance, and key companies in the assisted reproduction sector. It aims to analyze the current situation and pain points of the assisted reproduction industry, as well as the importance of reproductive health testing as a critical part of the assisted reproduction process for both the assisted reproduction industry and national birth defect prevention and control. The paper also focuses on the market competition landscape of China's assisted reproduction industry, reflecting the differentiated competitive advantages of leading enterprises upstream and downstream of the market.

Types of assisted reproductive technology can be mainly divided into Artificial Insemination (AI) and In Vitro Fertilization (IVF) and their various derivative technologies. Among them, intrauterine insemination is the main type of AI and the simplest method among existing assisted reproductive technologies, but its effectiveness is limited and the conception rate is relatively low. In Vitro Fertilization (IVF), commonly known as test-tube baby, is currently the most widely used assisted reproductive technology. An IVF cycle may take 2-3 weeks and generally includes a series of treatment procedures such as egg retrieval, in vitro fertilization, embryo culture, and embryo (fertilized egg) transfer. IVF technology is divided into three generations: the first generation is In Vitro Fertilization-Embryo Transfer (IVF-ET), the second generation is Intracytoplasmic Sperm Injection (ICSI), and the third generation is Preimplantation Genetic/Genetic Testing (PGT). Each generation of IVF is suitable for different patients.As the most effective assisted reproductive technology for treating infertility today, in vitro fertilization (IVF) has developed a relatively complete set of testing and treatment procedures, occupying an important position in the assisted reproductive market.

Data source: Analysis by Frost & Sullivan

The assisted reproductive industry is a collective term for a series of participants surrounding assisted reproductive technology. Centered on ART technology, the industry aims to achieve conception through technical intervention, with the goal of treating infertility and benefiting patients as well as society. According to the process involved, the assisted reproductive industry can be divided into upstream and downstream segments. The upstream includes reproductive health testing, while the downstream consists of assisted reproductive treatment, forming a complete industrial chain for the assisted reproductive industry.

Data source: Analysis by Frost & Sullivan

In many countries around the world, the accessibility and quality of infertility interventions remain a major challenge. The diagnosis and treatment of infertility are often not prioritized in national population and development policies or reproductive health strategies, and public health funding is also scarce. However, in China, whether it is the development of medical technology or the active implementation of successive population policies such as 'second-child' and even 'third-child', it indicates that the importance attached to fertility issues has risen to a national level in the context of China's broader environment.

On May 11, 2021, the National Bureau of Statistics announced the main data results of the seventh national population census: in 2020, the total national population reached 1.412 billion people, with a compound annual growth rate of about 1% over the decade; the number of births in 2020 was 12 million, resulting in a birth rate of 8.50‰, marking the third consecutive year of decline in the number of births, and the lowest birth rate since the data was published in 1952. To slow down the process of aging in China and mitigate the downward trend in birth rates, the national population policy has been gradually relaxed: from the "two-child" policy in 2015 to the proposed "three-child" policy in May 2021, which encourages childbirth greatly benefits the assisted reproductive industry; at the same time, the government has introduced regulatory policies to improve the top-level design of the industry, making industry supervision more standardized, reflecting the overall attitude of the national government towards valuing fertility and population issues and actively supporting the development of human assisted reproductive technology. By promoting the inclusion of assisted reproduction pilot projects in medical insurance payments in key areas, reducing the economic burden on patients, favorable policies are helping to accelerate the penetration and deep development of assisted reproduction.

The penetration rate of assisted reproductive technology (ART) in China is much lower than that in other developed regions globally, but it is growing rapidly. Driven by multiple factors such as increasing demand for ART and technological advancements, the gap with developed countries is gradually narrowing.

With the inclination of macro policies and the increasing burden of infertility diseases, the number of assisted reproductive certification institutions has been on the rise year by year in recent years. In the past, medical institutions in China that were approved to carry out human assisted reproduction were mainly distributed in North China and South China (Guangdong). With the rapid development of the industry, the geographical distribution gap has gradually narrowed.

In addition, compared to countries where the industry is more mature, the number of institutions in China conducting third-generation assisted reproduction is relatively small. As of December 31, 2020, only 78 medical institutions were approved to carry out third-generation PGT; moreover, a large number of infertile couples due to chromosomal structural abnormalities and other single-gene genetic diseases cannot effectively seek medical treatment, reflecting a significant gap in China's healthcare resources, especially those with advanced technology.

In the field of assisted reproduction, reproductive health testing mainly refers to the need for pre-pregnancy examinations and tests on both men and women to ensure healthy sperm and egg combination, identify potential adverse factors during pregnancy, and reduce the occurrence of miscarriages or birth defects.Reproductive health testing can serve as an important part of the assisted reproductive process, helping to improve the success rate of assisted reproduction.

Data source: Analysis by Frost & Sullivan

According to the testing phase, reproductive health testing mainly includes pre-pregnancy tests for both men and women related to reproductive health, as well as prenatal tests for embryos. The pre-pregnancy reproductive health test items for both men and women include: sperm quality testing, hormone testing, parental genetic disease screening, non-invasive prenatal genetic testing, and chromosome karyotype testing; prenatal embryo testing mainly includes: ultrasound prenatal examination, amniocentesis, preimplantation genetic diagnosis (PGT), and chromosomal microarray analysis (CMA).

Data source: Analysis by Frost & Sullivan

In the reproductive health testing industry, upstream includes providers of testing instruments and consumables, offering equipment such as testing devices, image scanning devices, and test reagents; as well as developers of testing result analysis systems, providing data analysis systems for laboratory results and image scanning analysis systems for chromosome testing. The downstream of the industry includes networks of testing analysis experts, testing service providers, and consumers of reproductive health testing.

Data source: Analysis by Frost & Sullivan

Reproductive health testing is not only of great significance for the quality of life, health, and family happiness of individual citizens, but also has a positive impact on the overall population quality and the healthy and sustainable development of society and economy.

China is a populous country and also one with a high incidence of birth defects. Birth defects impose a huge burden on families and society, leading to potential life losses, and have become a public health issue affecting population quality and group health levels. In our country, birth defects are currently the main cause of early miscarriage, stillbirths, infant mortality, and congenital disabilities. To alleviate the severe burden that birth defects bring to people and society, China has vigorously implemented primary, secondary, and tertiary prevention and control measures for birth defects. The tertiary prevention and control measure, due to its high operability, has been popularized across the country; secondary prevention and control, represented by ultrasound testing and fetal genetic testing, is gradually being recognized by the public. However, due to the still lagging time window for secondary and tertiary prevention and control, which is close to the production period or after the child's birth, along with the trend of advancing the threshold for birth defect prevention and control in our country, primary prevention and control, mainly focusing on premarital and pre-pregnancy testing, is expected to be rapidly promoted.

Data source: Analysis by Frost & Sullivan

Among the primary prevention and control measures, chromosome testing is conducted on pre-pregnancy families to screen for possible chromosomal abnormalities in both parties. Targeted application of assisted reproductive technology can reduce individual harm and family trauma caused by recurrent miscarriages due to unknown reasons. This has significant implications for the prevention and control of birth defects in society as a whole.

Reproductive health testing, in addition to being a crucial component of assisted reproductive procedures and having significant personal implications, can also potentially be applied for large-scale screening of citizens by the state and government.By implementing comprehensive reproductive health testing programs, genetic factors that may threaten the health of newborn populations (such as birth defects and cancer) can be eliminated. This has macroscopic significance for the population-wide planning of eugenics and healthy parenting.

Among the many causes of birth defects, chromosomal abnormalities are a significant reason for severe neonatal birth defects. The latest real-world data show that the incidence of chromosomal abnormalities in China has reached 1.3%. Reproductive health checks such as chromosomal karyotype testing can help identify this condition and potentially detect fetuses at high risk of miscarriage before they are born, allowing for re-fertilization and cultivation before embryo transfer. Regularly conducting such tests among the reproductive age population is not only of great significance for individual health and family happiness but also greatly beneficial to the overall population quality and the healthy and sustainable development of society and economy.

Chromosome testing technology has undergone multiple iterations, gradually achieving digitization and intelligence, with efficiency continuously improving. According to different levels of technology and automation/intelligence, chromosome karyotype testing technology in China can be divided into three generations:

Data source: Analysis by Frost & Sullivan

Among them, the third-generation chromosome detection technology integrates artificial intelligence devices and technologies. It has certain requirements for the configuration of testing institutions. Not only does the testing institution need to have a considerable reserve of talents, hardware equipment, and technical capabilities, but it also requires a large accumulation of testing sample information for optimizing systems and algorithms.

Currently, the potential market for reproductive health testing in China covers about 40 million couples preparing for pregnancy. Based on this estimate, the potential market for chromosome testing could exceed 55 billion yuan; in the future, the scope of testing is expected to expand and may even extend to routine testing for nearly 300 million people of childbearing age in our country. At present, the reproductive health testing industry has initially formed a complete industrial chain in our country; however, the localization level of upstream hardware is low, and large-scale, high-quality routine testing services have not yet been carried out. In summary, in China, the ecosystem of the reproductive health testing industry is still being constructed and gradually improving, and the broad market remains a blue ocean.

For a long time, reproductive health testing in our country has faced challenges such as high testing costs, low hospital penetration, insufficient sensitivity, and difficulty in ensuring national genetic information security. At the same time, there is a lack of self-research and development capabilities for assisted reproductive treatment devices, with imported brands still dominating the market. With the improvement of technical levels, research and innovation, as well as product updates and iterations, are not only effective means to solve these pain points but also an important driving force for industry progress.

The Report has sorted out domestic and international companies focusing on the reproductive health testing industry, highlighting their differentiated technological competitive advantages. Here are introductions to some of the participants:

The upstream reproductive health testing field encompasses imaging tests, biochemical tests of body fluids, and genetic testing. Among them, chromosome karyotype testing, as a milestone technology in neonatal genetic disease screening, can be divided into three generations. The representative suppliers vary greatly; the second-generation chromosome testing technology is represented by international microscopy giants Leica and Zeiss; the third-generation technology is represented by China's Desheng Biotechnology.

Leica-MicrosystemsLeica Microsystems is a global leader in microscopes and scientific instruments. The history of Leica's microscopic imaging systems can be traced back to the 19th century. As a renowned German optical manufacturing company, Leica has over 170 years of experience in microscope production and has gradually developed into a global leader in the microscopic imaging system industry. Leica Microsystems is mainly divided into three business sectors: life science and research microscopy, industrial microscopy, and surgical microscopy. Leica has seven product development centers and six manufacturing bases in Europe, Asia, and North America, and sales and service branches are located in more than twenty countries. With a long history, Leica is a traditional dominant brand in second-generation chromosome testing, enjoying a high market share in various regions around the world.

Zeiss Microscopy GmbHAs a microscope manufacturer, Zeiss mainly provides a full range of microscope systems and services for life sciences, material research, teaching, and clinical applications. Zeiss microscopes were founded in 1846; in 2006, various departments of optical microscopes were officially merged to form Carl Zeiss MicroImaging GmbH, and in 2011, the electron microscope business was integrated. Zeiss's chromosome analysis products belong to the second generation technology, which captures real-time images of chromosomes observed under the microscope through a camera and transmits them to a computer. Then, using chromosome image analysis software, operations such as image adjustment, segmentation of adherent and overlapping chromosomes, karyotype identification and arrangement are performed. Benefiting from its high resolution and the ability to analyze multiple chromosome karyotypes, Zeiss microscopes are widely distributed in reproductive health testing centers across the country.

DIAGENSDeShi Biotechnology is a leading enterprise in the field of reproductive health in China, adhering to the vision of 'letting life be better inherited'. It focuses on genetic disease diagnosis and assisted reproduction. In the field of reproductive health testing, as an explorer and pioneer of third-generation chromosomal karyotype testing technology, DeShi has launched the world's first AI chromosome diagnostic devices MetaSight® and AutoVision®, obtaining the only market authorization in both Europe and China.

DeShi applies its professional capabilities in chromosome karyotype testing, integrating R&D, industrialization, and application. It has gathered outstanding talents and expert resources in the field to safeguard the third-generation technology. With the strong technical strength and team building capabilities of the company, not only is it ensured that chromosome test reports are issued quickly under the third-generation technology, but also the continuous efficient optimization and iteration of AI core algorithms are greatly promoted.

Annoroad:AnnoYuda Genomics was established in 2012, headquartered in Beijing, and is a platform-based enterprise in the Chinese genomics industry. It is one of the first batch of pilot units for high-throughput gene sequencing clinical applications by the National Health Commission. AnnoYuda can accurately analyze chromosomal numerical aneuploidies and chromosomal deletions/repeats abnormalities larger than 0.1M through the collection of samples such as miscarriage tissue, blood from adults and children, and subsequent high-throughput sequencing with bioinformatics comparison analysis.

In the field of downstream assisted reproductive treatment, high-end reagents/consumables are currently mainly supplied by European and American companies represented by international suppliers such as Swedish Vitrolife and American Origio. The market share of domestic sterile reagent and equipment products for assisted reproduction does not exceed 10%. However, with favorable policy environment and the 'domestic substitution', the state plans to initiate research on independent R&D and localization of assisted reproductive medical products. For example, led by Shandong University, in collaboration with medical research institutions such as Renji Hospital, Sun Yat-sen University, Nanjing Medical University, and other organizations like Desi Biotechnology and Beikang Medical, they are developing reagents and consumables related to assisted reproduction.

Vitrolife:Vitrolife is a Swedish medical technology company founded in 1994 and listed on the Stockholm Exchange in 2001. Vitrolife focuses on developing, manufacturing, and selling medical devices for in vitro fertilization (IVF), providing a wide range of products and solutions to its customers, including culture media, test reagents, and disposable consumables. Vitrolife is a global company with operations in approximately 110 countries/regions. Vitrolife mainly provides IVF as well as consumables required by clinics and testing laboratories to support assisted reproductive therapy. It also offers software and equipment related to embryo assessment for PGT services, assisting assisted reproductive institutions in evaluating and selecting high-quality embryos.

DIAGENSAs a leading domestic enterprise in the full-process reproductive health field, Deshi Biotech also has investments downstream in assisted reproduction. With the wave of domestic substitution for medical devices in China, Deshi Biotech relies on national support for key scientific research projects related to assisted reproduction reagents and consumables, developing core high-value consumables and reagents. It independently produces products that break international monopolies in assisted reproduction consumable technology, aligning with policy trends.

Children are the source of joy for every family, yet our country has entered a category with a high infertility rate. With the development of technology, assisted reproduction has brought hope to infertile couples, and reproductive health testing is beneficial for reducing birth defects and achieving better parenting. As a modern medical technology responding to the country's population issues, assisted reproduction is on the rise; reproductive health testing, as an important means to improve population quality and prevent birth defects, has great potential for the future.