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THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE
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INDUSTRY OVERVIEW
The information and statistics set out in this section and other sections of this
document were extracted from different official government publications, available
sources from public, market research and other sources from independent suppliers. In
addition, we engaged CIC to prepare an independent industry report in respect of the
[REDACTED] (the “CIC Report”). We believe that the sources of the information in this
section and other sections of this document are appropriate sources for such information,
and we have taken reasonable care in extracting and reproducing such information. We
have no reason to believe that such information is false or misleading or that any
material fact has been omitted that would render such information false or misleading.
The information from official and non-official sources has not been independently
verified by us, the Joint Sponsors, or any other persons or parties involved in the
[REDACTED] or their respective directors, officers, employees, advisers and agents
(except for CIC), and no representation is given as to its accuracy. Accordingly, the
information from official and non-official sources contained herein may not be accurate
and should not be unduly relied upon. Our Directors confirm that after making
reasonable enquiries, there is no adverse change in the market information since the date
of the CIC Report that would qualify, contradict or have a material impact on the
information in this section.
THE RESPIRATORY AND LUNG DISEASE 1 DRUG MARKET
Overview
Respiratory and lung diseases have become a growing global public health problem that
is under-recognized, under-diagnosed, and under-treated in almost all countries, including
China. According to the National Bureau of Statistics, respiratory and lung diseases is the third
leading cause of death in China, after cardiovascular and cerebrovascular diseases and
malignant tumors. The main symptoms are cough, chest pain, sputum, affected breathing, and
in severe cases, respiratory distress, hypoxia, and even death from respiratory failure.
Depending on the cause and symptoms, respiratory and lung diseases can be categorized
into various types. In 2020, the major types of respiratory and lung diseases, which include
respiratory tract infections (including RSV infection), COPD, asthma, and interstitial lung
diseases (ILDs), affected 18.4 billion and 2.7 billion patient cases worldwide and in China,
respectively. These numbers are expected to further increase, given the large base of smokers
and a high exposure to second-hand smoke, as well as global population aging, growing
respiratory viral infection rates and increasing concerns over air pollution.
1 Unless otherwise specified, references to “respiratory and lung diseases” in this document exclude lung
cancers and COVID-19.
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INDUSTRY OVERVIEW
According to the CIC Report, the global market size of respiratory and lung disease drugs
is projected to increase from US$128.1 billion in 2020 to US$183.7 billion in 2030,
representing a CAGR of 3.7%. The China market size of respiratory and lung disease drugs is
expected to increase from US$35.2 billion in 2020 to US$69.7 billion in 2030, representing a
CAGR of 7.1%.
Global respiratory and lung diseases drugs market size (2015-2030E)
CAGR 2015-20 2020-30E Billion USD
RSV 2.3% 21.4%
IPF 29.7% 8.6%
PF-ILD (excl. IPF) / 30.4%
Asthma 4.0% 5.6%
COPD 4.4% 3.8% 184
Others(1) 0.4% -1.8% 176
Total 3.1% 3.7% 169 13
162 11 8
155 9 7 4
7
144
150 6 37 3
138 5 6 26
133 2
129
45 1 5
128 2 5 2 1
123 2 4 1 59
115 119 4 2 0 4 1 52 55
113 3 2 0 47 50
110 3 2 44
2 2 2 2 40 42
1 2 34 35 37
31 32
29 30
28
39 42 48 50 52 54 56 58 60 62
35 37 38 44 46
34
45 45 45 46 47 46 44 43 43 43 42 42 41 41 40 38
2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Note:
(1) Others primarily include drugs for cough, cold, and nasal and throat preparations.
Source: CIC
Respiratory Syncytial Virus (RSV)
RSV is an enveloped RNA virus that is highly prevalent and infectious, which causes
respiratory tract illness, especially in vulnerable populations such as children, the elderly and
the immunocompromised. Initial infection with RSV is usually in the upper respiratory tract
and causes symptoms that can be easily confused with common colds, resulting in a relatively
low diagnosis rate. If not properly treated, RSV cases may progress to lower respiratory tract
infection (LRTI) with more serious clinical manifestations, and could further lead to chronic
respiratory and lung diseases.
RSV infection is the number one cause of LRTI in young children worldwide, infecting
90% of children under two years old with approximately 3.3 million infected and hospitalized
children globally each year. In 2020, incidence of severe RSV infection in children under five
years old reached 34.6 million and 3.0 million globally and in China, respectively. RSV is also
estimated to infect 5.5% of adults aged 65 years or above globally each year, as their immune
system gradually deteriorates due to aging. In 2020, incidence of severe RSV infection in
adults aged 65 years or above reached 4.9 million and 1.2 million globally and in China,
respectively.
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INDUSTRY OVERVIEW
To date, there are no effective treatments specifically targeting RSV. In recent years,
direct-acting antiviral drugs are being developed as new therapeutic candidates for RSV, which
primarily target the various proteins involved in the viral replication cycle, including the fusion
protein (F protein), nucleoprotein (N protein) and RNA polymerase (L protein). The following
diagram illustrates the structure of an RSV. For more details on the mechanism of these
antiviral inhibitors and their development stage, see “—The Respiratory and Lung Disease
Market—Respiratory Syncytial Virus (RSV)—Competitive Landscape.”
Small hydrophobic
Phosphoprotein (P)
protein (SH)
Attachment
Nucleoprotein (N) glycoprotein (G)
Fusion protein (F)
Large RNA
Matrix protein (M)
polymerase (L)
Source: CIC
Addressable Market Size
Global Market Size
The overall global RSV drug market, including therapeutics and prophylactics, is
projected to grow at a CAGR of 21.4% from US$1.8 billion in 2020 to US$12.8 billion in 2030.
The global market size for RSV therapeutic drugs has been historically limited by the lack
of effective treatments. According to the CIC Report, the global RSV therapeutic drug market
is expected to grow significantly to reach US$6.1 billion in 2030, representing a CAGR of
89.6% from 2020, driven by the anticipated launch of RSV treatment drugs and their increasing
accessibility. The global RSV prophylactic drug market is expected to rise when new
prevention drugs with better efficacy, longer duration, and wider patient coverage enter the
market in the next few years.
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INDUSTRY OVERVIEW
Market size of RSV drug in the world, by treatment type
CAGR 2015-20 2020-30E Million USD
RSV therapeutic drug -28.7% 89.6%
RSV prophylactic drug 2.9% 13.8%
Global RSV drug market1 2.3% 21.4%
12,811
6,116
10,618
4,624
8,843
3,492
7,238
2,567
5,791
4,714 1,847
3,576 1,338
6,695
2,474 727 5,994
5,351
1,683 1,844 1,896 1,934 106 4,671
1,647 1,634 1,606 1,712 3,945
30 28 10 10 9 3,376
55 42 32
2,849
1,591 1,591 1,574 1,681 1,654 1,833 1,887 1,924 2,368
2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Note:
(1) Excluding vaccines.
Source: CIC
Approved and clinical-stage RSV treatment and prophylactic drugs primarily target
children, who are most susceptible to the disease. The global market of RSV drugs for children
is expected to rise at a CAGR of 20.3% from US$1.8 billion in 2020 to US$11.7 billion in
2030, according to the CIC Report, which will account for around 91.1% of the global RSV
drug market.
Market size of RSV drug in the world, by target population
CAGR 2015-20 2020-30E Million USD
RSV drug for children 2.3% 20.3%
RSV drug for adults -11.6% 97.8%
Global RSV drug market1 2.3% 21.4%
12,811
10,618
8,843
7,238
11,666
5,791
4,714 9,677
8,103
3,576
6,690
2,474 5,426
1,844 1,896 1,934 4,510
1,647 1,634 1,606 1,712 1,683
3,540
1,895 1,932 2,473
1,644 1,632 1,604 1,710 1,681 1,842
740 941 1,144
2 2 2 2 2 1 1 1 1 36 204 365 548
2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Note:
(1) Excluding vaccines.
Source: CIC
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China Market Size
The overall RSV drug market in China is projected to expand significantly at a CAGR of
75.8% from US$5.2 million in 2020 to US$1.5 billion in 2030, according to the CIC Report,
of which RSV drugs for children is expected to account for around 89.4% of the overall RSV
drug market in China.
According to the CIC Report, China’s RSV therapeutic drug market is expected to grow
to US$1.1 billion in 2030, as new and potentially more effective drug RSV antiviral drugs
become available in the country. Because palivizumab is not approved in China, the RSV
prophylactic drug market in China remains a white space market to date, and is expected to
grow starting in 2027 when the first RSV prophylactic drugs are expected to launch in China.
Market size of RSV drugs in China, by treatment type
CAGR 2015-20 2020-30E Million USD
RSV therapeutic drugs -11.6% 71.1%
RSV prophylactic drugs(1) N/A N/A 1,460
China RSV drug market -11.6% 75.8%
1,207
998
1,110
776
959
514 822
468
651
237
468 514
101 351
10 8 7 8 7 5 5 4 237 248
125 176
101
0 10 0 8 0 7 0 8 0 7 0 5 0 5 0 4 0 0 0 0
2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Note:
(1) Excluding vaccines.
Source: CIC
Market size of RSV drugs in China, by target population
CAGR 2015-20 2020-30E Million USD
RSV drug for children(1) -11.6% 78.8%
RSV drug for adults(1) -11.6% 62.0% 1,460
China RSV drug market -11.6% 75.8%
1,207
998
776 1,305
1,073
514 888
468
688
237 447
406
101 201
10 8 7 8 7 5 5 4 100 110 134 155
36 62 67 88
2 7 2 6 2 5 2 6 2 5 1 4 1 4 1 3 1
2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Note:
(1) Excluding vaccines.
Source: CIC
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INDUSTRY OVERVIEW
Treatment and Prevention Paradigm
Currently, the standard-of-care treatment for RSV is limited only to supportive care, such
as oxygen, nasal congestion relief, and nutrition and hydration, as well as the use of
bronchodilators, epinephrine, and steroids. Major clinical practice guidelines in the US and
China have recommended against ribavirin, a broad-spectrum antiviral drug not specifically
targeting RSV, due to concerns for its potential toxicity, limited and unpredictable efficacy, and
the inconvenience and high cost associated with its aerosolized administration, which can cost
an average of US$29,000 per day for one patient. In China, there are no existing RSV drugs
specifically approved for pediatric RSV patients. Interferon is a broad-spectrum drug used in
China for off-label treatment of children with RSV bronchiolitis and pneumonia.
Palivizumab, an RSV-specific mAb, is the only approved RSV prophylatic drug globally,
but is only indicated for selected high-risk infants and young children, and is not approved in
China. Palivizumab requires once-a-month injection during flu season and the cost of a single
dose can range from $1,000 to $3,000 depending on the weight of the patient. Despite its
limited prophylaxis effect, short prevention duration and narrow patient coverage,
palivizumab’s annual global sales peaked at US$1.6 billion in the past decade. There is no
other prophylactic antibody drug or vaccine approved globally for RSV prevention.
Guideline
Treatment Target population Efficacy and safety Recommendation*
China US
Therapeutic
US: Hospitalized high-risk infants and
young children • Minimal clinical benefits
Ribavirin X X
• Serious adverse effects (e.g. genotoxicity)
China: Unspecified
Children with RSV bronchiolitis and • No direct antiviral effect
Interferon 䡩 N/A**
pneumonia • Side effect of flu like symptoms
Prophylactic
• Limited prophylaxis effect
Palivizumab High-risk infants and young children 䡩 公
• Short prevention duration
* 公 Recommend × Not recommend as routine therapy 䡩 No approved drug
** N/A: not mentioned in the US guidelines
Source: CIC
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INDUSTRY OVERVIEW
Competitive Landscape
RSV Treatment
To date, there is no effective treatment specifically targeting RSV. In recent years,
direct-acting antiviral drugs are being developed as new therapeutic candidates for RSV, and
some have shown promising results in early clinical trials. These RSV therapeutic candidates
primarily target viral proteins involved in the viral replication cycle. The F protein, for
example, is a glycoprotein expressed on the surface of the viral membrane. It not only plays
a crucial role in virus entry – the first step of viral infection of human cells, but also promotes
syncytia formation between infected cells and adjacent healthy cells, a hallmark of RSV
transmission. Thus, F protein inhibitors represent a major class of direct-acting anti-RSV
therapeutic candidates among the most advanced RSV drug development programs globally.
The L protein is an RNA polymerase associated primarily with enzymatic activities required for
viral replication, making it another attractive research target. Inhibitors with different
mechanisms of action, including those targeting the N protein, are also being explored, pending
results from further pre-clinical and clinical studies. Different RSV antiviral inhibitors can
potentially be used in combination treatments, aiming for multiple targets to achieve better
therapeutic outcome and overcome the emergence of drug resistance.
As of the Latest Practicable Date, there were four RSV-targeted antiviral compounds
under clinical development globally.
RSV-targeted Antiviral Drugs under Clinical Development Globally 2
Administration
Drug name Company Target Study population Phase First posted Trial number Regulator
route
Children III 2020/02/21 CTR20200215 NMPA
AK0529 Adults II 2018/12/13 CTR20181808 NMPA
The Group F protein Oral
(Ziresovir) Children II 2016/01/13 NCT02654171 EMA
Adults I 2021/03/09 NCT04788017 FDA
Children III 2020/10/12 NCT04583280 FDA
JNJ-53718678 Immunocompromised
Janssen F protein Oral II 2019/08/14 NCT04056611 FDA
(Rilematovir) adults
Healthy adults I 2021/02/20 CTR20210269 NMPA
Adults II 2019/12/12 NCT04196101 FDA
EDP-938 Enanta N protein Oral
Children II 2021/03/25 NCT04816721 FDA
Children II 2020/01/13 NCT04225897 EMA
RV521 ReViral F protein Oral Immunocompromised
II 2020/02/13 NCT04267822 FDA
adults
Source: ClinicalTrials.gov; CDE; CIC
2 Unless otherwise specified, a clinical trial is considered inactive, and hence not included in this and other
pipeline charts, if (1) the latest phase of the clinical trial had been completed over five years ago, and (2) it
has not entered into the next phase.
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INDUSTRY OVERVIEW
RSV Prevention
Prophylactic vaccines and antibodies are the primary RSV prevention strategies being
developed. The development of RSV vaccines was hindered for many years due to safety
concerns as healthy infants experienced vaccine-enhanced disease (VED) after administration
of the first RSV vaccine candidate. Despite decades of clinical efforts, no RSV vaccine has
demonstrated efficacy or been approved globally as of the Latest Practicable Date.
Palivizumab, a prophylactic antibody, is currently the only approved drug for RSV prevention
globally. However, it is only approved for prevention of RSV infection in a limited group of
infants and young children with specific characteristics, and is not approved in China.
According to the CIC Report, as of the Latest Practicable Date, there were only two RSV
antibodies under clinical development globally.
RSV Antibodies under Clinical Development Globally
Administration
Drug name Company Target Study population Phase First posted Trial number Regulator
route
Healthy late
preterm and term III 2019/06/07 NCT03979313 FDA
MEDI-8897 AstraZeneca/
F protein Intramuscular infants
(Nirsevimab) Sanofi
High-risk children II/III 2019/05/22 NCT03959488 FDA
Healthy adults I 2021/02/19 CTR20210252 NMPA
Merck Sharp &
MK-1654 F protein Intramuscular Infants II/III 2021/02/23 NCT04767373 FDA
Dohme Corp.
Source: ClinicalTrials.gov; CDE; CIC
Market Drivers and Trends
• R&D efforts driven by lack of efficacious RSV drugs. There has long been significant
unmet needs for effective RSV drugs. Despite decades of drug discovery efforts,
there are still no effective treatments available, leaving the market with significant
white space opportunities. Latest research and development advances, pre-clinical
studies and clinical trials of new RSV drug candidates will help remove major
technical obstacles hampering drug development over the years, paving the way for
market growth.
• Increasing diagnosis and awareness of RSV infection. Since the symptoms
manifested after RSV infection are very similar to common flu, RSV is often
undiagnosed. Moreover, RSV testing and diagnosis techniques, which are well-
developed and widely accessible, have been long underutilized due to the absence
of targeted treatment. Since the outbreak of COVID-19, public awareness for RSV
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and other respiratory and lung diseases have been significantly enhanced both in
China and globally. diagnosis rate of RSV infection, the overall market for RSV
therapeutic and prophylactic drugs is expected to grow.
• Growing population vulnerable to RSV infection. Multiple factors may contribute to
the expansion of RSV patient population, including the aging population, the delay
in women’s marriage and childbearing which is associated with an increase in
premature births and congenital defects, and worsening air quality. Increase in
population susceptible to RSV infection, such as premature infants, newborns with
underlying diseases, and elderly adults, is expected to drive market growth.
Entry Barriers
RSV drug development is highly complex, especially due to challenges associated with
clinical trial in pediatric population. Infants and young children are most susceptible to RSV
infection. Pediatric drug development has a distinctly different, and more stringent, set of
standards than adult-use drugs in formulation, PK, toxicology, dosing, safety, clinical trial
design and regulatory pathway, requiring a much bigger safety window and a higher level of
know-how and expertise. As a result, challenges in the design and clinical development of
pediatric drugs have brought major entry barriers to RSV drug development.
Chronic Obstructive Pulmonary Disease (COPD)
COPD is a chronic inflammatory lung disease and the world’s third leading cause of
death, with an estimated three million deaths recorded worldwide in 2020, equivalent to
approximately 5% of global deaths in the same year. It is characterized by persistent respiratory
symptoms and airflow limitation due to airway and/or alveolar abnormalities, usually caused
by cigarette smoking, respiratory viral infection, and significant exposure to noxious particles
or gases.
There were approximately 218.2 million COPD patients worldwide in 2020, which is
expected to increase to 276.8 million in 2030, representing a CAGR of 2.4%, largely
attributable to a large base of smokers and aging population. Prevalence of COPD in China has
also been on the rise in recent years, especially among the elderly. There were approximately
114.7 million COPD patients in China in 2020, which is expected to grow at a CAGR of 2.9%
and reach 153.1 million in 2030.
According to the CIC Report, the market size of COPD drugs worldwide is expected to
increase at a CAGR of 3.8% from US$42.4 billion in 2020 to US$61.7 billion in 2030. The
market size of COPD drugs in China is expected to increase at a CAGR of 6.5% from US$9.9
billion in 2020 to US$18.4 billion in 2030.
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Global COPD drugs market size (2015-2030E)
CAGR 2015-20 2020-30E Billion USD
Global COPD drugs 4.4% 3.8%
61.7
59.5
55.5 57.5
53.6
51.7
49.7
47.9
46.0
44.2
42.4
37.8 39.4
35.5 36.8
34.2
2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Source: CIC
There is currently no cure for COPD, and the existing treatment drugs mainly rely on
bronchodilators, which can modulate airway smooth muscle but only relieve the symptoms of
COPD and delay disease progression. Anti-inflammatory agents such as inhaled corticosteroids
(ICS) are also commonly used to reduce the severity of exacerbations, but have shown no
clinical evidence in modifying the long-term decline in lung function and disease progression.
Higher life expectancy and rising aging population are expected to propel the prevalence
of COPD, which in turn drives the development of COPD drugs. There is growing evidence of
higher prevalence of COPD in the elderly, as age-associated changes in the structure and
function of the lung may increase a patient’s susceptibility to COPD. A large base of smokers
also contributes to a higher risk of COPD. Moreover, the COVID-19 outbreak has brought
worldwide attention to respiratory and lung diseases. As a result, more routine health check-ups
and precautionary measures are expected to be taken in the future for the screening for COPD,
which will potentially increase diagnosis rates.
THE FIBROTIC DISEASE DRUG MARKET
Overview
Fibrosis is a progressive and degenerative condition in human organs where a normal
tissue becomes scarred over time and loses its physiological function. Fibrotic diseases
constitute a major challenge to global health owing to the large number of affected individuals,
the incomplete knowledge of the fibrotic process pathogenesis, and the current void of
effective therapeutic treatments. Fibrosis is a leading cause of morbidity and mortality
worldwide which can occur in almost any human organ or tissue.
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According to the CIC Report, the global market size of anti-fibrotic drugs is projected to
increase from US$8.4 billion in 2020 to US$41.0 billion in 2030, representing a CAGR of
17.2%. The China market size of anti-fibrotic drugs is expected to increase from US$0.6 billion
in 2020 to US$3.5 billion in 2030, representing a CAGR of 18.7%.
Market size of anti-fibrotic drugs in the world (2015-2030E)
CAGR 2015-20 2020-30E Billion USD
PF-ILD (including IPF) 31.8% 12.3%
Hypertrophic scar 2.3% 3.4%
Myocardial fibrosis / 35.8% (23E-30E)
41.0
Kidney fibrosis / 52.9% (25E-30E)
Liver fibrosis / 42.4% (22E-30E) 35.8
Total 10.8% 17.2% 12.3
31.3
10.7
27.4
9.4
6.3
21.3 8.3
6.0 1.0
18.1 5.7 0.9 5.3
15.6 7.4
5.4 0.8 4.2
13.1 6.6
0.7 3.5
10.4 5.9
8.9 5.2 2.9
8.4 5.3 0.6
7.0 7.5 5.1
5.8 6.3 4.7 16.1
5.0 3.9 4.3 5.0 0.5 1.9 13.9
2.1 2.6 3.0 4.8 0.1 0.3 0.6 11.9
1.0 1.6 10.0
4.7 5.3 6.3
4.1 4.2 4.3 4.4 4.4 4.5 4.6 2.9 4.4
0.1
2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Source: CIC
Idiopathic Pulmonary Fibrosis (IPF)
IPF is a specific form of chronic, progressive fibrosing pneumonia of unknown cause. IPF
is a rare disease that affected approximately 1.6 million persons worldwide in 2020, and is
estimated to account for 20% to 50% of all cases of interstitial lung disease (ILD), a group of
disorders which commonly feature progressive scarring of lung tissue. On May 11, 2018, IPF
became one of the 121 rare diseases designated by the First Catalogue of Rare Diseases in
China. Cigarette smoking, respiratory viral infection and environmental factors, such as
exposure to metal and wood dusts, livestock, and hazardous materials, are potential risk factors
of IPF.
IPF occurs primarily in older adults, characterized by progressive worsening of dyspnea
and lung function. In recent years, mortality from IPF has been increasing steadily worldwide.
Given its unpredictable but progressive evolution, the prognosis of IPF remains generally poor,
with a median survival time of three to five years from the time of diagnosis and a five-year
survival rate estimated at around 20%, even lower than those observed in many types of cancer.
According to the CIC Report, the number of patients affected by IPF worldwide is expected to
rise to approximately 2.1 million in 2030, representing a CAGR of 2.7% from 2020. There were
approximately 250,000 IPF patients in China in 2020, and the number is expected to grow at
a CAGR of 2.4% and reach approximately 317,000 in 2030.
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Addressable Market Size
The IPF drug market has grown rapidly in recent years, both globally and in China, a
trend largely attributable to improved diagnosis capabilities and the availability of efficacious
treatment drugs.
According to the CIC Report, the market size of IPF drugs worldwide is expected to
increase at a CAGR of 8.6% from US$3.6 billion in 2020 to US$8.1 billion in 2030. The market
size of IPF drugs in China is expected to increase at a CAGR of 36.2% from US$34.5 million
in 2020 to US$757.6 million in 2030.
Global IPF drugs market size (2015-2030E)
CAGR 2015-20 2020-30E Million USD
Global IPF drugs 29.7% 8.6%
8,091
7,482
6,913
6,382
5,887
5,425
4,995
4,595
4,224
3,878
3,557
3,038
2,595
2,087
1,597
971
2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
China IPF drugs market size (2015-2030E)
CAGR 2015-20 2020-30E Million USD
China IPF drugs 96.8% 36.2%
758
533
398
296
220
162
120
88
65
35 47
11 24
1 2 5
2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Source: WHO; National Bureau of Statistics; CIC
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Treatment Paradigm
There are currently only two drugs approved for IPF in the US and China, namely
pirfenidone and nintedanib. Both drugs are poorly tolerated with side effect, such as GI
intolerance, phototoxicity and liver toxicity, which could lead to discontinuation of the
treatment. In 2020, pirfenidone and nintedanib recorded US$1.3 billion and US$2.5 billion 3,
respectively, in global sales, despite their limited efficacy and poor tolerability.
Cost of treatment
Treatment Mechanism Indications and side effects Approval year
(per patient/year)
Therapeutic
US: US$80,000-
• IPF
US (2014) 110,000
Pirfenidone TGF- • GI intolerance and
China (2013) China: US$10,000-
phototoxicity
11,000
US: US$100,000-
Multi-target kinase • IPF, PF-ILD and SSc-ILD US (2014) 120,000
Nintedanib
inhibitor • Liver and kidney toxicity China (2017) China: US$14,000-
15,000
Source: CIC
Competitive Landscape
The approval of pirfenidone and nintedanib has fueled IPF drug discovery and
development. Currently, there is a growing portfolio of candidates that target different
pathways involved in the complex pathogenesis of IPF. Among the candidates, second
generation pirfenidone drugs share a similar chemical scaffold and have similar mechanisms of
action as pirfenidone. Second-generation pirfenidone drug candidates aim to improve the
safety profile of pirfenidone, especially side effects such as GI intolerance and phototoxicity
that could result in discontinued use of the drug, and to achieve better efficacy and patient
compliance.
3 The global and China sales of nintedanib is primarily attributable to the treatment of IPF, but may also be
associated with other indications. Nintedanib is approved for the treatment of PF-ILD and SSc-ILD in China
and the US.
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INDUSTRY OVERVIEW
According to the CIC Report, as of the Latest Practicable Date, there were three
second-generation pirfenidone compounds for IPF under clinical development globally.
Second-generation pirfenidone for IPF under Clinical Development Globally
Drug name Company Target Phase First posted Trial number Regulator
I 2021/6/17 CTR20211248 NMPA
AK3280 The Group TGF-*
I 2019/6/19 NCT03990688 EMA
Guangdong HEC II 2021/1/26 CTR20210132 NMPA
Yinfenidone
Pharmaceutical TGF-
(HEC585) I 2020/8/13 NCT04512170 FDA
Industry
Deupirfenidone
PureTech TGF- I/II 2020/1/28 NCT04243837 FDA
(LYT-100)
* Inhibitor of TGF- induced fibrotic gene expression
Source: ClinicalTrials.gov; CDE; CIC
Market Drivers and Trends
• Rise in patient population. Increase in the number of aging population has been
witnessed worldwide. According to a WHO report, the number of people above 65
is expected to reach 1.5 billion by 2050, which is estimated to constitute about 16%
of the world population. Increase in elderly individuals is expected to result in rise
in incidence and prevalence of lung disorders, which in turn increases the risk for
lung fibrotic diseases. Cigarette smoking is another significant factor contributing to
lung fibrosis. Moreover, studies have shown that COVID-19 patients are prone to
develop IPF and other lung fibrosis. The outbreak and global spreading of
COVID-19 is hence another factor contributing to the growth in patient population.
• Unsatisfactory current treatments driving development of new drugs. The two
approved treatments for IPF to date, pirfenidone and nintedanib, both have limited
efficacy and poor tolerability. As a result, there are significant unmet needs in the
treatment of IPF. Recent progress in the clinical development of IPF drugs continues
to stimulate further research efforts and potential market growth.
• National rare disease list coverage may drive rapid approval process. On May 11,
2018, IPF became one of the 121 rare diseases designated by the First Catalogue of
Rare Diseases in China. The catalogue was published by the PRC government to
facilitate greater awareness of rare diseases and introduce incentives for research
and development of orphan drugs. As a result, drugs that target IPF treatment is
potentially eligible for fast track launch by leveraging the rare disease designation
in China.
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INDUSTRY OVERVIEW
• Improvement in diagnosis capabilities and public awareness. Historically, IPF
diagnosis rates have been low due to a limited understanding of the disease and
limited clinical guidance. With a growing understanding of the complex
pathogenesis of IPF, and an increasing number of official guidelines and expert
consensus being formulated, diagnosis rate for IPF is increasing, which is expected
to drive the market for IPF treatments.
Entry Barriers
IPF is a rare disease affecting approximately 1.6 million individuals worldwide in 2020.
Therefore, the development of treatment for IPF suffers from the hurdles characteristic of rare
diseases, where the small number of patients limit the feasibility of adequately powered trials.
Moreover, given that the pathogenesis of IPF remains unclear, the development of IPF drugs
requires in-depth research and development experience and know-how, as well as access to a
wide network of KOLs and patients. As a result, medical research and clinical development for
IPF face longstanding obstacles which take considerable commitment, expertise, and financial
resources to overcome.
Progressive Fibrosing Interstitial Lung Disease (PF-ILD) (excluding IPF)
PF-ILD is a group of fibrosing lung diseases characterized by progressive deterioration
in lung function, physical performance, and quality of life in patients. IPF is the most common
and severe type of PF-ILD, but other chronic ILDs are also at risk of developing into a
progressive fibrosing form. Cigarette smoking is considered one of the common causes for the
development of PF-ILD, and the risk of PF-ILD also increases with age.
According to the CIC Report, there were approximately 1.1 million PF-ILD (excluding
IPF) patients worldwide in 2020, which is expected to increase to 1.4 million in 2030,
representing a CAGR of 2.7%. In China, there were approximately 167,000 PF-ILD (excluding
IPF) patients in 2020, which is expected to grow at a CAGR of 2.4% and reach approximately
211,000 in 2030.
According to the CIC Report, the market size of PF-ILD drugs (excluding IPF) worldwide
is expected to substantially increase at a CAGR of 30.4% from US$296.2 million in 2020 to
US$4.2 billion in 2030, following the approval of nintedanib as a PF-ILD treatment in 2020.
The market size of PF-ILD drugs (excluding IPF) in China is expected to increase at a CAGR
of 40.7% from US$18.3 million in 2021 to US$397.7 million in 2030.
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INDUSTRY OVERVIEW
Global PF-ILD drugs market size (excluding IPF) (2015-2030E)
CAGR 2015-20 2020-30E Million USD
Global PF-ILD drugs / 30.4%
4,211
3,267
2,528
1,952
1,503
1,154
884
675
514
296 391
2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Source: CIC
Nintedanib is the first, and to date the only, approved treatment for PF-ILD (excluding
IPF) globally. For more details on nintedanib and its market size, see “—The Fibrotic Disease
Drug Market—Idiopathic Pulmonary Fibrosis (IPF)—Competitive Landscape.” Before the
approval of nintedanib, patients with PF-ILD have generally been treated with off-label
antifibrotic or immunosuppressive therapies.
According to the CIC Report, as of the Latest Practicable Date, there were only two
compounds under clinical development globally for the treatment of PF-ILD (excluding IPF).
PF-ILD Drugs under Clinical Development Globally (excluding IPF)
Drug name Company Target Phase First posted Trial number Regulator
Pirfenidone Hoffmann-La Roche TGF- II 2017/4/4 NCT03099187 FDA
Shanghai Yuanxi
Thioredoxin
Selenium porphyrin Pharmaceutical I 2021/4/13 CTR20210706 NMPA
reductase
technology Co., Ltd
Source: ClinicalTrials.gov; CDE; CIC
Similar to IPF, the future growth of the PF-ILD drug market will be driven by an expected
rise in patient population, especially the elderly, as well as the overall improvement in
diagnosis capabilities and public awareness. For details, see “—The Fibrotic Disease Drug
Market—Idiopathic Pulmonary Fibrosis (IPF)—Market Drivers and Trends.”
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INDUSTRY OVERVIEW
Liver Fibrosis (LF)
Liver fibrosis occurs when repetitive or long-lasting injury or inflammation causes
excessive amounts of scar tissue to build up in the organ. It can be caused by chronic liver
diseases, most commonly HBV infection, alcohol abuse, and nonalcoholic steatohepatitis
(NASH). Advanced liver fibrosis, if not properly treated, can result in cirrhosis, liver failure,
and portal hypertension that often requires liver transplantation. Approximately 1.9 billion
patients were estimated to be affected by liver fibrosis globally in 2020, which is expected to
increase steadily to 2.1 billion in 2030. Approximately 359.8 million patients were estimated
to be affected by liver fibrosis in China in 2020, which is expected to remain steady in the next
ten years.
There are currently no anti-fibrotic drugs approved for the treatment of liver fibrosis. The
drug market for liver fibrosis treatments is projected to expand significantly in the next decade,
both in China and globally, as an increasing number of drug candidates currently under clinical
development are expected to enter into the market. In particular, viral infection plays a key role
in the development of chronic liver diseases, the prevalence of which is expected to drive the
market growth for liver fibrosis treatments globally. Approximately 18% to 35% of hepatitis
B patients, for instance, suffer from advanced liver fibrosis.
According to the CIC Report, the global liver fibrosis drug market is expected to grow
from US$954.0 million in 2022 to US$16.1 billion in 2030, in terms of sales revenue,
representing a CAGR of 42.4%. The liver fibrosis drug market in China is expected to grow
from US$123.4 million in 2025 to US$991.3 million in 2030, representing a CAGR of 51.7%.
According to the CIC Report, as of the Latest Practicable Date, there was only one
compound under clinical development globally for the treatment of liver fibrosis caused by
hepatitis B.
Anti-Fibrotic Drug for Liver Fibrosis (Caused by Hepatitis B)
under Clinical Development Globally
Drug name Company Indication Phase First posted Trial number Regulator
Liver fibrosis with
Shanghai Genomics II 2018/11/28 CTR20160699 NMPA
chronic hepatitis B
Hydronidone Chronic viral
Beijing Continent hepatitis b with liver
I 2019/10/11 NCT04123769 NMPA
Pharmaceutical fibrosis and mild
liver dysfunction
Source: ClinicalTrials.gov; CDE; CIC
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It is estimated that the patient size in need for effective liver fibrosis drugs will remain
large, given the current lack of effective treatment. Hepatitis B is still a major cause of liver
fibrosis and a widespread and highly infectious disease with no functional cure. Deepening
research into the etiology and pathogenesis of liver fibrosis is expected to further propel the
ongoing development programs, which in turn contribute to a significant growth in the
projected market size.
Hypertrophic Scars (HS)
Hypertrophic scars are pathological scars resulting from abnormal responses to trauma
and can be itchy and painful, causing serious functional and cosmetic disability. They are the
most common type of clinical scarring, typically caused by abnormality of the repair process,
which can lead to excessive tissue proliferation. Incidence rates of HS vary from 40% to 70%
following surgery to up to 91% following burn injury, depending on the depth of the wound.
There were an estimated 25.9 million new cases of HS worldwide in 2020, which is expected
to increase to 33.9 million in 2030, representing a CAGR of 2.7%. Approximately 7.3 million
new cases of HS were recorded in China in 2020, and the incidence is expected to rise at a
CAGR of 3.7% to reach 10.5 million in 2030.
The HS drug market has been growing steadily in recent years. According to the CIC
Report, the global HS drug market is expected to grow from US$4.5 billion in 2020 to US$6.3
billion in 2030, in terms of sales revenue, representing a CAGR of 3.4%. The HS drug market
in China is expected to grow from US$598.4 million in 2020 to US$876.5 million in 2030,
representing a CAGR of 3.9%.
There is no cure for HS, and the current first line treatments are intralesional
corticosteroid injection and silicone elastomer sheeting. Existing drug therapies, such as local
injection of steroids, are limited by uncertain efficacy, high rate of recurrence, or severe
adverse reactions, which create significant need for new treatment options.
According to the CIC Report, as of the Latest Practicable Date, there was only one
topical-use compound under clinical development globally for the treatment of HS.
HS Topical-Use Treatment under Clinical Development Globally
Drug name Company Administration Phase First posted Trial number
FS2 Emulsion Moisturizer
Birch BioMed Topical use II 2019/11/20 NCT04169490
(hydrogel)
Source: ClinicalTrials.gov; CDE; CIC
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The HS drug market is driven by technology breakthroughs in novel and improved skin
treatment methods. Disposable income and willingness and ability to pay for such treatments
are also growing globally, in part attributable to rising self awareness among people regarding
their aesthetic appearance. Consequently, there has been a rise in the public’s interest and
demand in the potential options for scar treatments, which further promotes the growth of the
HS drug market.
OVERVIEW OF THE HBV DRUG MARKET
Hepatitis B is a widespread and infectious liver disease caused by chronic infection of
HBV, an enveloped DNA virus affecting more than 236.4 million people worldwide. Hepatitis
B can become a chronic disease, especially if infected in children, which can lead to liver
fibrosis and liver cancer. According to the Guideline for Primary Care of Chronic Hepatitis B
(2020) (慢性乙型肝炎基層診療指南(2020年)) published by Chinese Medical Association (中
華醫學會) in February 2021, among Chinese patients with liver cirrhosis and hepatocellular
carcinoma (HCC) – the most common type of primary liver cancer – 77% and 84%,
respectively, were infected with HBV.
The diagnosis and treatment rate for hepatitis B has historically been low due to lack of
symptoms and functional cure. In 2020, it is estimated that 236.4 million people worldwide
were living with HBV infection, although only 15.5%, or 36.7 million, were diagnosed with
hepatitis B, and only 3.2%, or 7.5 million, were on treatment. For the same year, there were
71.7 million people in China living with HBV infection, with a diagnosis rate and treatment
rate of 26.9% and 7.4%, respectively.
Hepatitis B incurs a high disease burden, including social stigma, labor loss, and heavy
economic burden, thereby creating a large unmet demand for effective hepatitis B treatments,
particularly in China. According to the CIC Report, the global HBV drug market is expected
to grow from US$3.9 billion in 2020 to US$9.9 billion in 2030, in terms of sales revenue,
representing a CAGR of 9.6%. The HBV drug market in China is expected to grow from
US$1.5 billion in 2020 to US$4.5 billion in 2030, representing a CAGR of 11.5%.
While there are long-term standard of care treatments for HBV infection that suppress
HBV replication, none of them can achieve functional cure, defined as seroconversion of
HBsAg, in the majority of patients. Recently, RNA destabilizers, which are compounds that
affect the stability of viral RNA, have attracted interest for their biochemical and therapeutic
potential. Some RNA destabilizer drug candidates have exhibited efficacy in destabilizing
multiple HBV RNA species, which in turn result in the reduction in the level of the respective
HBV proteins, including HBsAg and HBeAg.
According to the CIC Report, as of the Latest Practicable Date, there was only one HBV
RNA destabilizer drug under clinical development globally.
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HBV RNA Destabilizer Drug under Clinical Development Globally
Drug name Company Indication Phase First posted Trial number Regulator
Fujian Cosunter
GST-HG131 Chronic Hepatitis B I 2020/08/06 CTR20201603 NMPA
Pharma
Source: ClinicalTrials.gov; CDE; CIC
The high prevalence of HBV and the patients’ need for functional cure are key drivers of
the hepatitis B antiviral drug market. The successful development of new antiviral drugs for
hepatitis B and the general improvement of therapeutic efficacy, in particular the discovery of
functional cure, will benefit the growth of the overall HBV drug market.
OVERVIEW OF THE PFIC DRUG MARKET
PFIC is a rare and inherited condition which causes problems with bile acid secretion,
resulting in abnormal bile flow, liver damage and scarring. PFIC symptoms may begin in
infancy and can lead to cirrhosis and end-stage liver disease at variable ages from infancy to
adulthood. Affected individuals typically develop liver failure before adulthood.
According to the CIC Report, the global PFIC drug market is expected to grow from
US$4.5 million in 2021 to US$61.2 million in 2030, in terms of sales revenue, representing a
CAGR of 33.7%. The PFIC drug market in China is expected to grow from US$0.5 million in
2022 to US$8.1 million in 2030, representing a CAGR of 43.0%.
For most patients, surgery is often needed for survival, including liver transplantation and
a procedure known as Partial External Biliary Diversion (PEBD), and available treatment drugs
are only off-label medications providing symptomatic relief.
According to the CIC Report, as of the Latest Practicable Date, there were two
compounds under clinical development globally for the treatment of PFIC.
PFIC Drugs under Clinical Development Globally
Drug name Company Study population Phase First posted Trial number Regulator
Odevixibat Albireo Children NDA 2021/1/25 N/A FDA
III 2019/4/5 NCT03905330 FDA
Maralixibat Mirum Children
II 2021/1/28 NCT04729751 FDA
Source: ClinicalTrials.gov; CDE; CIC
In recent years, there has been a noticeable rise in the awareness of PFIC, which is
expected to propel drug discovery and clinical development seeking better therapies for the
disease. PFIC has also been listed on the First Catalogue of Rare Diseases, under which PFIC
drugs are potentially entitled to an accelerated review and fast track launch in China.
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INDUSTRY OVERVIEW
SOURCE OF INFORMATION
In connection with the [REDACTED], we have commissioned CIC, a market research
and consulting company and an Independent Third Party, to conduct research and analysis of,
and to produce a report on, the respiratory and drug disease market and other potential markets
for our drug candidates (the “CIC Report”). The CIC Report has been prepared by CIC
independent of the influence of our Group and other interested parties. We have agreed to pay
CIC a total fee of RMB650,000 for the preparation and use of the CIC Report, and we believe
that such fees are consistent with the market rate. CIC is a consulting firm founded in Hong
Kong and provides professional industry consulting services across multiple industries. CIC’s
services include industry consulting, commercial due diligence and strategic consulting.
In compiling and preparing the report, CIC conducted both primary and secondary
research using a variety of resources. Primary research involved interviewing key industry
experts and leading industry participants. Secondary research involved analysing data from
various publicly available data sources, including but not limited to the National Bureau of
Statistics, National Medical Products Administration, Food and Drug Association, National
Health Commission of the PRC, the International Monetary Fund, and World Health
Organization. The market projections in the CIC Report are based on the following key
assumptions: (i) the overall social, economic and political environment in China is expected to
remain stable during the forecast period; (ii) China’s economic and industrial development is
likely to maintain a steady growth trend over the next decade; (iii) related key industry drivers
are likely to continue driving the growth of the respiratory and lung disease drug market and
other potential markets for our drug candidates during the forecast period, such as the growing
prevalence of respiratory and lung disease, improving diagnosis and awareness of respiratory
and lung disease, increasing number of new drugs, supportive government programs and
policies, increasing research and development expenditures and improved affordability of
drugs; and (iv) there is no extreme force majeure or industry regulation in which the market
may be affected dramatically or fundamentally.
Notwithstanding the exchange rates adopted elsewhere in this document, in this “Industry
Overview” section, translations between Renminbi and U.S. dollars were made at the rate of
RMB6.5249 to US$1.00, the median rate set by PBoC for foreign exchange transactions
prevailing on January 1, 2021.
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