Business Plan For GPA Diagnostic Reagent Kit

1. Introduction

This business plan aims to outline our project for launching a universal diagnostic reagent kit targeting the medical diagnostics market. The project focuses on providing affordable, efficient, and accurate testing solutions to meet the needs of hospitals and potential chronic disease patients. Our core advantage lies in significantly reducing the price of the reagent kits while maintaining high product quality standards.

2. Market Research on In Vitro Diagnostic Reagent Kits

2.1 Definition of the Diagnostic Reagent Industry

Diagnostic reagents are chemical substances or devices used to detect, measure, or analyze specific substances or pathogens in biological samples. They are commonly used in medicine, biology, and other scientific fields to help doctors, researchers, and laboratory technicians determine the type, severity, and treatment options for diseases. Diagnostic reagents can include various types of reagent kits, test strips, enzyme-linked immunosorbent assay (ELISA) reagents, polymerase chain reaction (PCR) reagents, and more. These reagents typically require specific instruments or equipment for accurate testing and analysis.

2.2 Classification of the Diagnostic Reagent Industry

The classification of diagnostic reagents mainly includes in vivo diagnostic reagents and in vitro diagnostic reagents. In vivo diagnostic reagents are primarily used for diagnostic tests conducted inside the human body, such as skin injections to detect tuberculosis or brucellosis, whereas in vitro diagnostic reagents are the most common type, used for collecting blood, urine, or saliva samples from patients for analysis in a laboratory environment. Within a methodological classification, clinical biochemical reagents are an important category. These reagents mainly involve testing various biochemical indicators, including enzymes, sugars, lipids, proteins, non-protein nitrogen, inorganic elements, and liver function. These products can be used with manual operations, semi-automatic, or fully automatic biochemical analyzers, and come in various specifications such as single reagents, liquid dual reagents, dry powder dual reagents, and chemical method reagents. To ensure accuracy and consistency in test results, these reagents also provide quality control serum series.

2.3 Upstream and Downstream of the Diagnostic Reagent Industry

The upstream industry of diagnostic reagents includes fields such as biological products, chemical raw materials, and instrument equipment, which serve as the foundation for the production of diagnostic reagents.

The downstream application of diagnostic reagents broadly encompasses multiple fields, including healthcare, agriculture, and environmental monitoring, with the healthcare sector being the primary application area. In the healthcare sector, diagnostic reagents can be used to detect various disease markers and pathogens, assisting doctors in early diagnosis and treatment decisions.

Additionally, with the development of precision medicine, diagnostic reagents have gradually become an important part of personalized medicine, providing more precise treatment plans for patients.

2.4 Market Size and Growth Rate of the Diagnostic Reagent Industry in China

In the early diagnostic reagent market, clinical chemistry diagnostics held a dominant posi- tion. However, over time and with advancements in medical technology, immunodiagnostics have gradually surpassed clinical chemistry diagnostics in terms of market share. Meanwhile, molecular diagnostics, as an emerging technical field, is experiencing unprecedented growth. The main driving force behind this trend is the in-depth research into the human genome, which has opened up extensive research space for molecular diagnostics and significantly advanced laboratory medicine in disease diagnosis and prognosis. Furthermore, chemiluminescent diagnostic reagents, as a new testing method, show great potential in the domestic immunodiagnostic field and are expected to become mainstream products in the future due to their high sensitivity and specificity, providing accurate and rapid results, thereby gaining widespread clinical application.

Diagnostic reagents can be divided into in vivo diagnostic reagents and in vitro diagnostic reagents.

Observing market trends in recent years, we see that in vitro diagnostic reagents occupy an absolute market share advantage, typically exceeding 95%. In contrast, the market share of in vivo diagnostic reagents is relatively low, generally below 5%.

Affected by national medical insurance cost control policies, domestic medical institutions have gradually eliminated the 15% markup on medications. This change has led to a decline in pharmaceutical income, while the demand and value for medical projects like diagnostics have shown growth, resulting in a ”mutual exclusivity” situation. Currently, the number of industrialized di- agnostic reagent products in China is relatively small, reaching only over 60 varieties. In certain key areas, such as diagnostics for tumors, AIDS, and cardiovascular diseases, our technological strength and market supply still appear to be relatively weak. In comparison, the number of mature product categories globally exceeds 1,200. The diagnostic reagent industry in China is an emerging field, and compared to developed countries such as those in Europe and America, its development is still relatively lagging. At present, there are about 300 to 400 diagnostic reagent manufacturing enterprises in China, with about 200 enterprises reaching above-scale production; however, there are only about 20 enterprises with annual sales exceeding 100 million yuan. This situation of small enterprise scale and limited product varieties has become an important constraint on the industry’s development. However, in recent years, the domestic in vitro diagnostic reagent industry has achieved significant development, with the market share of domestic products gradually expanding, breaking the dominance of imported products in the market.

Among these companies, some have market shares exceeding 10%. Specifically, Shanghai Fosun Pharma has a market share of approximately 15%; Beijing Baoshen Biotechnology has a market share of about 12%; Shanghai Huarui Biotechnology has a market share of around 10%; Beijing Zhongsheng Beikong Biotechnology Co., Ltd. has a market share of approximately 8%; and Shanghai Mindray Medical Appliances has a market share of about 7%.

2.5 Diagnostic Reagent Industry Policies

The introduction of policies regarding the diagnostic reagent industry reflects the high importance that the Chinese government places on improving healthcare and promoting the development of the biopharmaceutical industry. These policies encourage innovative research and development, promote technological advances, and facilitate industrial upgrades in diagnostic reagents to meet the growing healthcare needs. Additionally, there is a strengthening of market regulation to ensure product quality and safety, safeguarding public interests. These policies provide strong guarantees for the sustainable and healthy development of the diagnostic reagent industry and are expected to drive the industry to a higher level.

2.6 Market Size Analysis

In recent years, in vitro diagnostics have become one of the most active and fastest-growing sectors in the healthcare market. From a global perspective on the development of the in vitro diagnostics business, regions such as North America and Western Europe are the main markets. In economically developed regions, the in vitro diagnostics market has reached a relatively stable stage due to the relatively complete healthcare services. Data shows that, due to the surge in demand for COVID-19 testing, the global in vitro diagnostics market has experienced significant growth since 2021. In 2022, the global in vitro diagnostics market reached USD 127.4 billion, and it is expected to reach USD 143.8 billion in 2023.

The emerging in vitro diagnostics market, represented by China, is growing rapidly. Under the support of policies, the swelling demand from downstream markets, and advancements in technology, China’s in vitro diagnostics industry has undergone rapid development, with a swift increase in industrialization. Meanwhile, as the Chinese economy develops and the population ages, factors such as increased per capita medical spending will continue to influence the expansion of the domestic in vitro diagnostics market. It is projected that in 2023, China’s in vitro diagnostics market size will reach CNY 160.3 billion.

3. 6C Principle Analysis

3.1 Customer

3.1.1 Target Customers and Demand Analysis

Target Customers: Hospitals and potential chronic disease patients.

Demand Analysis: Currently, although there are various diagnostic reagent kits available in the market, their high prices limit widespread application. Our product will greatly expand market demand by significantly lowering prices (e.g., the price of the whooping cough nucleic acid testing kit reduced from several hundred yuan to five yuan).

3.1.2 Market Size and Potential

With the increasing health awareness and rising demand for medical diagnostics, there is immense market potential for low-cost, high-quality diagnostic reagent kits.

In recent years, China’s in vitro diagnostics industry has developed rapidly. In terms of market segmentation, the molecular diagnostics market holds the largest share, accounting for 27% of the market; immunodiagnostics and biochemical diagnostics account for 26% and 14% of the market share, respectively; and the shares for POCT, hematology and body fluids, and microbiology are 12%, 12%, and 3%, respectively.

Regarding Molecular Diagnostics: China’s molecular diagnostics market started relatively late but has grown rapidly. The molecular diagnostics market is mainly divided into infection testing, oncology testing, reproductive health, and genetic disease segments. Data shows that the market size of China’s molecular diagnostics industry increased from 5.1 billion yuan in 2017 to 18.2 billion yuan in 2022, with an average annual compound growth rate of 29%. The outbreak of the COVID-19 pandemic in 2020 rapidly expanded the molecular diagnostics market. It is expected that by 2023, the market size of China’s molecular diagnostics industry will reach 24.3 billion yuan.

3.2 Competitor

• Existing Competition: There are currently four types of whooping cough nucleic acid testing kits in the market, which are priced high with limited profit margins.
• Differentiated Competition: Westand out through price advantages and product innovation (such as the development of universal diagnostic reagent kits), while also focusing on targets for other diseases to broaden our product line.
• From a Competitive Landscape Perspective: The global in vitro diagnostics market is a mature industry with a high concentration of market share. In 2022, Roche had the highest market share at 15%, followed by Abbott, Danaher, Thermo Fisher, and Siemens at 13%, 8%, 6%, and 5%, respectively. These multi- national healthcare groups dominate the global high-end in vitro diagnostics market due to their stable product quality, high technological content, and precise equipment manufacturing capabilities.

• Advantages: We have novel and feasible ideas that have been proven viable; team members possess high professional expertise.
• Disadvantages: Compared to established brands, our brand awareness and market share need improvement.
• Core Competence: Price advantage, technological innovation, and the ability to respond quickly to market demands.

3.4 Capital

• Funding Requirements: Clearly define the scale of startup and operational funds to ensure smooth project progression.
• Funding Sources: Raise funds through venture capital, government subsidies, and self-raised funds from multiple channels.
• Funding Utilization Plan: Allocate funds reasonably among R&D, production, marketing, and team building.
• Investment and Financing Analysis: Currently, the in vitro diagnostics industry in foreign countries is relatively well-developed, covering a full range of high, medium, and low-end products. In contrast, most domestic companies are still in the development stage, with most of their products being mid-to-low-end. Data shows that in 2021, there were approximately 52 investment events related to the in vitro diagnostics field in China, with an investment amount of 6.463 billion yuan. In 2022, the number of investments in the in vitro diagnostics field was 25, with an investment amount of 4.425 billion yuan. The industry is characterized by fierce competition.

3.5 Continuity

Development Strategy: Formulate long-term market expansion plans, including searching for new disease targets and promoting universal diagnostic reagent kits to more disease areas.

1. National Policies Promote Industry Development: The in vitro diagnostics industry is a key area encouraged for development, and national industrial policies play a positive role in promoting the industry’s growth. In recent years, China has introduced a series of laws, regulations, and industrial policies that emphasize support for the in vitro diagnostics industry while also establishing further regulations and requirements for the medical device industry, benefiting the long-term healthy development of the sector.

2. Aging Population Creates Demand for the Industry: The size of the in vitro diagnostics market is directly related to the volume of medical diagnoses. Aging leads to increased healthcare demands, which in turn results in a rise in testing volume. The year 2022 marked the acceleration of aging in China, with the population aged 60 and above reaching 280.04 million, accounting for 19.8% of the national population, of which 20.978 million are aged 65 and above. Population aging will bring a steady and rapid increase in per capita healthcare expenditure, laying a solid foundation for the development of the global in vitro diagnostics industry.

3. The Launch of New Technologies and Products Promotes Industry Advancement: The POCT (Point of Care Testing) industry is a technology-intensive sector where new technologies and products are continuously being introduced. From a technological platform perspective, advancements such as high-throughput technology, third-generation single-molecule sequencing, circulating tumor cells (CTC), ddPCR, mass spectrometry plat- form testing, as well as the widespread application of microfluidic chips and the strong emergence of artificial intelligence technologies, are making the applications of POCT products increasingly widespread and in-depth, thereby driving the development of the in vitro diagnostics industry.

• Product Innovation: Continuously develop new technologies and products to enhance product competitiveness.
• Team Building: Strengthen team building to improve employee skills and service levels, ensuring sustainable enterprise development.

3.6 Contribution

• Social Value: By providing low-cost, high-quality diagnostic reagent kits, we aim to reduce medical costs and improve diagnostic efficiency, contributing to the health and well-being of the public.
• Social Responsibility: Actively participate in public welfare activities to promote the popularization and development of medical diagnostic technologies.

4 Product Advantages

• Price Advantage: Our diagnostic reagent kits are priced significantly lower than similar products in the market.
• Broad-spectrum Design: Our broad-spectrum diagnostic reagent kits are applicable for multiple disease detections.
• Technological Innovation: Employ advanced testing technologies and processes to ensure product quality and stability.

After cost estimation and market evaluation and comparison, we have priced our GPA Diagnostic Reagent Kit at approximately 25 yuan/test.

5 Market Promotion Strategy

• Target Customer Positioning: Focus primarily on hospitals while also addressing the needs of potential chronic disease patients.
• Channel Development: Establish diverse sales channels, including online platforms, offline agents, and collaborations with medical institutions.
• Brand Promotion: Enhance brand awareness through professional exhibitions, academic conferences, and media promotion.
• Pricing Strategy: Maintain price advantages while adjusting pricing strategies based on market feedback.

6 Risk Assessment and Mitigation Measures

• Market Risks: Changes in market demand, intensified competition, etc.
• Mitigation Measures: Strengthen market research and timely adjust product and market strategies.
• Technical Risks: Failure in new technology development, product quality issues, etc.
• Mitigation Measures: Increase R&D investment and improve quality management sys- tems.
• Financial Risks: Funding chain disruptions, funding shortages, etc.
• Mitigation Measures: Broaden financing channels and arrange a reasonable funding utilization plan.