Good News on Listing | Frost & Sullivan Congratulates Northgate (Beijing) Pharmaceutical Technology Co., Ltd. on Successful Listing on the Growth Enterprise Market

Northgate (Beijing) Medical Technology Co., Ltd. (hereinafter referred to as "Northgate") successfully listed on August 2, 2022, issuing 1,5 million shares at an issue price of 78.88 yuan per share.

Northgate is a CRO with a complete clinical trial industry chain and can provide comprehensive clinical drug R&D services. The company has full-chain and full-field service capabilities covering all stages of clinical trials, as well as rich resources of clinical trial institutions and clients. Northgate's main business covers all stages of clinical trials, including clinical trial operation services, site management services, biological sample testing services, data management and statistical analysis services, clinical trial consulting services, clinical pharmacology services, etc., and can provide full-process clinical CRO services. After more than a decade of accumulation, Northgate has established good long-term cooperative relationships with researchers in various therapeutic fields and can quickly and efficiently assist sponsors in promoting their product clinical trials. Northgate has provided clinical trial outsourcing services that meet domestic and international standards for nearly 500 clients and more than 1,800 clinical trial projects at home and abroad, establishing a good reputation in the domestic and international markets. Many high-quality pharmaceutical enterprise clients maintain long-term and stable cooperative relationships with Northgate.

Frost & Sullivan has long been paying attention to the global and Chinese biopharmaceutical industries, publishing a large number of research reports, which are widely cited in the prospectuses of leading ChiNext-listed companies in the industry, helping customers accelerate growth.

With the introduction of a series of supportive government policies such as "Opinions on Deepening the Reform of the Review and Approval System to Encourage Drug and Medical Device Innovation", the regulatory system and environment of the Chinese pharmaceutical market have changed. These policies have promoted the acceleration of drug review and approval, not only shortening the clinical trials and approval time of new drugs, enabling new drugs to be launched as soon as possible, but also accelerating the review and approval of urgently needed clinical drugs and encouraging new drug R&D. At the same time, the "Opinions" encourage and promote drug generic production and accelerate the consistency evaluation of generic drug quality and efficacy. With the support of China's policies and the continuous development of the pharmaceutical industry, it is expected that the Chinese pharmaceutical market will continue to grow in the future, increasing from 1,533.4 billion yuan in 2018 to 2,132.6 billion yuan in 2023, with an annual compound growth rate of 6.8%.

The Chinese pharmaceutical industry is continuously developing from low-end generics to R&D innovation, resulting in continuous growth in pharmaceutical R&D investment, and the growth rate is much higher than the global average. At the same time, multinational pharmaceutical companies, in order to explore the Chinese market, have increased their drug exports to China and set up R&D centers in China, giving rise to huge demand for imported drug clinical research. In 2014, China's pharmaceutical R&D investment was $9.3 billion, which increased to $17.4 billion in 2018, with an average annual compound growth rate of about 16.9%. From 2018 to 2023, China's pharmaceutical R&D investment is expected to grow at an average annual compound growth rate of 23.1% to reach $49.3 billion.

CRO provides solutions for the drug development stage, including DMPK, safety toxicology, bioanalysis, clinical trial monitoring, SMO, data management and statistical analysis, etc. Compared with the CRO markets in developed countries such as Europe and America, the CRO business in emerging market countries such as China has grown more rapidly. On the one hand, driven by factors such as aging and urbanization in emerging markets like China, medical demand has been continuously released, the pharmaceutical market has expanded rapidly, and R&D investment has also increased accordingly, thus driving the rapid growth of the demand for pharmaceutical R&D outsourcing. On the other hand, benefiting from factors such as rich talent resources and low labor costs in emerging markets, multinational pharmaceutical companies have gradually transferred their R&D business to emerging markets such as China. In 2014, the market scale of preclinical and clinical CROs in China was only $1.8 billion, but by 2018, the market scale of preclinical and clinical CROs in China had reached $4.7 billion, with an average annual compound growth rate of about 28.0%.

Compared with developed countries, the development of China's CRO industry is still in its infancy, with huge development space. In the next few years, the Chinese preclinical and clinical CRO market will maintain a compound annual growth rate of 29.4%, reaching $172 billion by 2023.

The domestic CRO market started relatively late but has grown rapidly. By 2018, the market scale of Chinese clinical-stage CROs reached $32 billion, with an annual compound growth rate of 31.3% from 2014 to 2018. With the continuous tightening of clinical research regulatory requirements and rising clinical research costs, CROs have gradually become the preferred cooperation choice for pharmaceutical companies during the drug clinical research stage due to their professionalism and familiarity with industry policies and processes. Compared with the global level, the proportion of Chinese pharmaceutical companies choosing CRO services is still lower than the global level, and there is room for improvement in penetration. By 2023, the market scale of Chinese clinical-stage CROs will reach $133 billion, with a much higher annual compound growth rate than the global level during the same period.