Market Opportunity Sizing for IVD in Asia Pacific

3th Nov 2011

BRIDGING INTELLIGENCE GAPS IN HEALTHCARE

IVD segment composition 2009 total APAC market size

APAC IVD market reached almost USD 3.4 bil in 2009, with CD taking up ~80% of market value. CC and IM accounted for more than 60% of the market size.

IVD market growth & forecast by segment 2007 to 2014

The CD market is expected to grow slightly stronger than the DxD and MDx segment, at a CAGR of 13.4% from the period 2010-2014. Nonetheless, forecasted growth across the 3 business areas are strong at double digit or almost double digit growth.

BRIDGING INTELLIGENCE GAPS IN HEALTHCARE

IVD market growth & forecast by country

A forecasted CAGR of 12.8% growth will be driven largely by the Asian powerhouses, China and India, with China accounting for more than half of the share of business in the region by 2014.

IVD country growth 2008 to 2009

High

08 - 09 Growth

Low

CN

AU

KR

IN

TW

TH

MY

NZ

HK

SG

ID

PH

PK

VN

BRIDGING INTELLIGENCE GAPS IN HEALTHCARE

IVD overall supplier share breakdown by segment

Outgrowing the overall IVD market, Roche is still the market leader in most countries. Abbott and Siemens lost slight market share, while Beckman made a slight market gain due to the acquisition of Olympus.

Abbott is trying hard to catch up with Roche in IM segment, while Qiagen has been growing well in MDx due to organic and inorganic growth (via acquisition). Novartis / Chiron are the 3rd largest MDx supplier in APAC, due to the growing adoption of NAT blood screening in this emerging region

BRIDGING INTELLIGENCE GAPS IN HEALTHCARE

Market development and competition

IM market segment Market development and competition
Except for China, all leading IM blood screening players are MNCs. Abbott is the number 1 player in the region with 26% share of business followed by Kehua (dominates in China), bioMerieux and Bio-rad. IM blood screening market in China is dominated largely by local suppliers due to their lower cost. Established local IVD supplier, KeHua, and XinChuang. Infectious disease is the largest sub-segment in IM accounting for 21% of share in 2009. Abbott, established and well-known for their infectious disease tests and has near to 36% share of the segment value followed by a distant RD at 15% share in 2009. On the other hand, RD has been making good in-roads with introduction of new automated system in some markets, Tumour markers sub-segment has been experiencing strong growth in Asia in recent years as the economic boom, impacting lifestyle changes continues (high incidence of lung, liver and stomach cancer). RD with its strong Tumour markers panel and active placement is the leader in this sub-segment in the region, with near to 47% of value share, followed by a distant second, Abbott at 25% value share. Thyroid Profile is the 4 largest sub-segment in IM hospital testing. RD, Siemens and Abbott are equally strong in this segment with each having around 20% - 28% share of business.
th

BLOOD SCREENING Market size: USD 196 mil

INFECTIOUS DISEASE Market size: USD 279 mil

TUMOUR MARKERS Market size: USD 224 mil

THYROID PROFILE Market size: USD 210 mil

CARDIAC MARKERS Market size: USD 78 mil

Standing at ~6% of the IM hospital testing market, this is the smallest and yet one of the faster growing IM sub-segments due to the change in population lifestyle / diet.

FERTILITY /HORMONES Market size: USD 123 mil

Fertility / hormones testing is a sizable and fast growing IM subsegment with near to 9% value share. Roche leads in the region with near to 29% share, followed by Abbott and Siemens with 20% each in value share.

BRIDGING INTELLIGENCE GAPS IN HEALTHCARE

DxD market segment

Market development and competition

BGE is by far the largest DxD sub-segment with near to 39% of value share. Growth in real POC (department level adoption) of BGE has been rising in recent years, the result suppliers education and marketing efforts. Radiometer is the clear leader in the region with 25% share of nd business, followed by a distant 2 , IL at 16% share. Siemens, RD and Abbott have about similar share for BGE in Asia, ranging from 10% to 12%. Hospital BGM sub-segment is growing along with the rising incidence of Asia aging as well increasingly obese population. China is one of the major growth markets for this sub-segment. Hospital BGM accounted for 37% of the DxD market in 2009 with China contributing to near to half of the demand. RD is the top player with 38% value share, followed by a distant nd 2 , J&J at 25% share. Cardiac markers sub-segment account for 12% of value share for overall DxD in 2009. This is a strong growth sub-segment especially in BNP test. RD dominates this sub-segment with slightly more than half of the nd regions value share (51%), while Inverness comes in 2 at 33% value share. Coagulation (DxD) sub-segments growth is limited by high costs and the strong dominance of lab based CO tests. RD dominates coagulation (DxD) with 79% share of business, while Alere/ Inverness have a good position for this sub-segment in China.

BLOODGAS/ ELECTROLYTES Market size: USD 151 mil

HOSPITAL GLUCOSE TESTING Market size: USD 142 mil

CARDIAC MARKERS Market size: USD 45 mil

COAGULATION (DxD) Market size: USD 11 mil

OTHERS Market size: USD 36 mil

Axis Shield NycoCard is popular in the region for HbA1C. Siemens is also doing well with its DCA instruments in this subsegment.

BRIDGING INTELLIGENCE GAPS IN HEALTHCARE

MDx market segment

Market development and competition

NAT adoption in blood screening is happening at a rapid pace in the region. The recent long anticipated Chinese government endorsement of NAT blood screening will drive substantial growth for this sub-segment. In more developed markets, like Australia, automation replacement trends will see old system being replaced with full automated system that will conduct HIV, HBV and HCV. Blood bank application of NAT accounts for 16% of total MDx value. Novartis dominates with 65% share of business in this subsegment, and in many countries they are the sole supplier to blood banks. Virology is the single largest sub-segment in MDx, accounting for 48% of value share in 2009. Within virology, HBV accounts for 24% of the value share. RD has 44% share in virology sub-segment but local suppliers in China, such as Da An and Qiagens recently PG Biotech, are well positioned in China and dominates this sub-segment. Abbot gained some grounds in this sub-segment in 2009 by implementing a more aggressive placement strategy in countries like Australia and Korea. Increasing public awareness, government initiated cervical cancer screening programs and high incidence of the disease in the region continues to drive demand for HPV DNA testing. Although, current preferred screening method in the region is still the cheaper conventional PAP smears In 2009, this sub-segment account for 6% of total MDx value but is expected to increase with reimbursement under consideration in key markets like Korea. Microbiology sub-segment accounted for 15% of MDx value share in 2009. CT/NG is the largest testing parameter within this subsegment. RD is the market leader with 24% share in the region. Genetic/ oncology testing is the smallest sub-segment in MDx with a mere 2% value share in 2009. A lot of testing still done via homebrew or domestic supplier kits. Large market like China does not currently approve genetic/ oncology testing for clinical diagnostics applications.

BLOOD BANK Market size: USD 44 mil

VIROLOGY Market size: USD 130 mil

HPV TESTING Market size: USD 16 mil

MICROBIOLOGY Market size: USD 40 mil

GENETIC/ONCOLOGY Market size: USD 4 mil

BRIDGING INTELLIGENCE GAPS IN HEALTHCARE

IVD growth forecast major drivers & barriers

The IVD market in APAC is forecasted to continue growing strongly at a CAGR of ~12.8% from the period 2010-2014. Developing economies and increasingly affluent populations will fuel strong organic growth moving forward. While China and Indian will be the main driver for CD, while the other developed markets are rather mature and stable. FACTORS
Historic consumption trend External market forces

DESCRIPTION
The IVD market in APAC has been growing at ~12-14% for the past few years, fueled by the booming economies of China and India. The major markets in APAC have a healthcare reimbursement system (China, Korea, Australia, and Taiwan) that provides comprehensive coverage for the IVD market. As such, healthcare test consumption is unlikely to be significantly impacted by the slightly volatile recovery phase of the regional economy, or any potential sporadic political turmoil in the region. However, the national health insurance bureau in several major countries are facing mounting budget deficit, or have cut funding for the pathology industry.

IMPACT

12.8%

Market phase

Strong organic growth from increasingly affluent population will drive demand for healthcare services and pathology testing in the developing economies of China, India, and Thailand. In the mature markets such as Australia and Taiwan, the IVD market is stable and growth is limited by the national health insurance bureau funding. Due to active supplier competition, price erosion trend has been observed across most countries.

Trade sentiments and secondary sources

Increased workload and high cost of labour are driving the larger facilities across the countries to improve on their workflow efficiency and adopt TLA systems. In the mature markets, lab consolidation trend is occurring, as labs leverage on economy of scale to negotiate harder with suppliers, resulting in reduced profit margins for suppliers.

BRIDGING INTELLIGENCE GAPS IN HEALTHCARE