High Monkey Prices and Surging Demand for Preclinical Platforms Signal a Strategic Shift in China's Biopharma Ecosystem

About a decade ago, the price of purchasing an experimental monkey in China was only around RMB 10,000. Since the onset of the COVID-19 pandemic, prices for experimental monkeys in China have risen steadily. In 2022, the price of a single experimental monkey peaked at RMB 230,000.

In fact, since the outbreak of the novel coronavirus, demand for vaccines and diagnostic reagents has surged worldwide, leading to varying degrees of shortages in materials required for pharmaceutical R&D and production. In particular, experimental monkeys have become a scarce resource globally, with intense competition for their availability.Last month, reports indicated that the price of laboratory monkeys in the United States exceeded 400,000 yuan, reigniting significant attention on the experimental animal industry due to these sky-high prices.

Due to China’s historical lack of presence in the innovative drug sector, the domestic laboratory monkey industry has been extremely weak, with very few large-scale breeding facilities. As an upstream industry supporting innovative drug R&D services, the laboratory animal sector has seen sustained surges in demand amid the boom in domestic innovative drug development. This has directly driven a sharp spike in the prices of laboratory animals.

The severe short-term imbalance in U.S. monkey prices is primarily attributable to supply shortages: Southeast Asia, a major supplier of laboratory monkeys, faced customs rejections due to failed defect inspections, while exports from China, another key supplier, declined due to the pandemic. These factors collectively tightened supply and demand dynamics, resulting in skyrocketing monkey prices.

Whether it is the gradually rising heat of the innovative drug industry, the rigid demand for the development of COVID-19 vaccines and drugs, or the limited source of species and difficulties in import and export, these factors jointly affect the rise and fall of monkey prices from many aspects.In fact, by this year, the latest round of tender announcements published on the China Government Procurement Network shows that the price per monkey isRMB 122,800, the unit price still seems to be an astronomical figure, but in reality,Prices have shown a downward trend.

To meet the continuous demand from upstream, China’s laboratory animal platforms and CRO services have been developing rapidly in recent years. Although a complete industrial cluster has not yet formed, a large number of innovative companies dedicated to this field have emerged.

Moreover, as regulatory frameworks continue to improve, the previously fragmented landscape of animal testing services is being replaced by scaled and standardized service providers. Coupled with the fact that an increasing number of innovative medical devices are entering a critical phase of product compliance, experimental animal platforms are demonstrating unprecedented commercial value.As the final piece of the R&D ecosystem that was once overlooked, the experimental animal platform is now being competitively introduced into bioparks across various regions.

What stage has the development of China’s laboratory animal industry reached? How might changes in overseas laboratory animal prices impact domestic laboratory animal platforms? What new trends have emerged in the industry?Recently, VCBeat New Medicine invited four guests from the industry and investment sectors to discuss why model animal platforms continue to attract repeated attention.

The panelists participating in the discussion included: Ms. Zhang Lei, Chairwoman and Co-President of Life Biosciences; Mr. Wen Zefeng, Senior Sales Director for Greater China at Charles River; Ms. Li Chen, General Manager of Yifang Health Valley; and Ms. Zhang Bingjie, Vice President of Investment at Puhua Capital.

▲ The guests in the picture, from left to right, are:

(First row) Wang Shiwei, Senior Researcher at VCBeat; Wen Zefeng, Senior Sales Director for Greater China at Charles River

(Second Row) Zhang Bingjie, Vice President of Investment at Puhua Capital; Li Chen, General Manager of Yifang Health Valley; Zhang Lei, Chairman & Co-President of Life Biosciences

VCBeat New Medicine:First,Who are the primary consumers of laboratory monkeys? How do they differ from other goods and services?

Wen Zefeng (Charles River):Our primary consumer base remains CROs and biotech companies, with cynomolgus monkeys mainly used for drug safety evaluation and biologics research. In recent years, driven by the urgent demand for COVID-19 vaccine and related drug development, the market for laboratory monkeys experienced a significant boom.

Our company primarily produces cynomolgus monkeys, which are characterized by three key factors. First, breeding stock is scarce, with the majority sourced from Southeast Asian countries. Second, they have a long growth cycle; offspring of cynomolgus monkeys are generally not ready for experimental use until they are over three years of age. Third, production qualifications are stringent, requiring simultaneous acquisition of licenses such as the Laboratory Animal Production License and the Wildlife Artificial Breeding License. The combination of a lengthy breeding and rearing cycle with surging demand has resulted in a tight supply-demand imbalance.In the long term, the issue of breeding stock must be urgently addressed; otherwise, the domestic production capacity of crab-eating macaques will continue to decline.

Zhang Lei (Life Biosciences):Clients of laboratory animals can be mainly divided into three major categories. One category consists of leading CRO companies, which, in addition to experimental monkeys, also extensively use Beagle dogs and mice for research purposes. CROs are among the largest customers for basic laboratory animals.

In addition, as we provide early-stage research services, there is another major category of research clients, including basic research institutions such as domestic universities, research institutes, and hospitals. Driven by their innovation mandates, they also have sustained, high-volume demand for laboratory animals.

The third category comprises innovative companies. Many well-established innovators procure laboratory animals during the early stages of development for preclinical animal studies. Consequently, users of experimental animals span the entire biopharmaceutical industry, from academic research to industrial applications.

As with all industries,Ripple Effects of Falling Monkey Prices: Downstream Profits, Upstream Pressure. As downstream beneficiaries of the experimental monkey market, innovative pharmaceutical companies will reap significant benefits, as this translates into tangible savings in clinical trial costs. Price fluctuations often provide the most intuitive reflection of shifting market trends.

VCBeat New Medicine:What trends have recently emerged in the pricing and demand for laboratory animals? Will these changes impact the operations of laboratory animal platforms?

Wen Zefeng (Charles River):It is a fact that the price of cynomolgus monkeys has declined compared to the previous two years. However, feedback from sales and marketing indicates that this is not due to an increased supply of monkeys, but rather a slight decrease in R&D demand driven by the economic downturn.Due to the impact of COVID-19,Domestic imports of breeding stock remain restricted, leading to the gradual aging and degeneration of existing breeding populations over the past three years, which has resulted in a significant decline in production capacity.

The surge in monkey prices abroad is primarily due to disruptions in the international supply chain. Recently, shipments of crab-eating macaques from Cambodia to the United States were subjected to inspections by U.S. Customs, causing a brief interruption in the supply chain. The resulting shortage has driven prices sharply higher. Overall, however, China’s domestic products and pricing are returning to a relatively balanced state after the overheating seen in the previous two years. This adjustment is likely to be a gradual decline rather than a sudden drop, as demand remains consistently present.

As a manufacturing supplier, short-term price fluctuations will not significantly impact our operations; we will make timely adjustments based on market dynamics. Our current priority is to ensure product quality and quantity, introduce new breeding stock whenever possible, and guarantee the stable annual production and supply of crab-eating macaques.

Zhang Lei (Life Biosciences):China and Southeast Asia are the largest suppliers of laboratory monkeys in the United States. However, China has been unable to export due to the pandemic, while Southeast Asia has also failed to supply due to defect investigations. The adjustment of supply and demand has ultimately affected monkey prices. So, can we avoid using them if the price is high? Not necessarily. Whether or not to use them still depends on the needs of drugs and indications.

Although the financing environment in China has led some companies to shelve their pipelines or reduce preclinical studies, with growing emphasis on foundational innovation, innovative drug companies truly committed to developing first-in-class drugs are increasingly aware of the need to front-load clinical risk assessment. After completing basic validation studies in mice, they conduct experiments in non-human primate models to minimize unnecessary time losses caused by clinical failures.

Companies in the CGT sector and emerging medical device fields, such as brain-computer interfaces, that we have engaged with to date place significant emphasis on the early identification and mitigation of clinical risks.Because it is well understood that once experiments are successful in non-human primates, clinical risks will be significantly reduced.

In terms of operations, although short-term price declines may impact profitability, the medium- to long-term outlook is beneficial for both parties. We will focus on strengthening our breeding colonies while simultaneously enhancing high-value-added basic services, such as providing technical support for animal model development. This segment remains unaffected by fluctuations in animal prices.

As industry participants, we do not wish to see monkey prices continue to soar, as this would disrupt the development pace and efficiency of the entire sector. Even with a commitment to foundational innovation and proactive risk management, if experiments become unaffordable due to exorbitant prices, it will effectively slow down R&D progress across the industry.Therefore, maintaining a healthy supply-demand relationship and restoring prices to a balanced and reasonable level is beneficial for the entire biopharmaceutical industry, as it ensures affordability for innovative companies while generating revenue for laboratory animal suppliers.

VBInsight New Medicine: From an investor’s perspective, what stage of development is the experimental animal platform currently in? What is the underlying logic for its future advancement?

Zhang Bingjie (Puhua Capital):In the field of laboratory animals, we only began to pay attention in the past two years after recognizing the demand from innovative pharmaceutical companies for upstream CRO services. Although China started later in this area, it has developed rapidly, especially on the demand side. With the continuous emergence of new targets and new indications, the demand for laboratory animals by innovative drug companies is showing a trend of rapid growth, and the industry also needs development on the supply side to meet this demand.

Due to the technical barriers within the industry, there is a shortage of suppliers capable of delivering at scale and with standardization.The industry is in its early growth stage. This is an opportune time for social capital to enter."Providing financial support to accelerate industry development and help leading companies quickly become mature benchmark enterprises is what we hope to see."

The industry is currently substantial in scale and populated by numerous enterprises; however, suppliers that are stable and adhere to scientific, standardized practices remain exceedingly rare.This has resulted in uneven management standards across the industry as a whole. Meanwhile, there is a shortage of research talent and high staff turnover, but this is a normal phase in early-stage development; standardization and refined growth will be achieved as the industry matures.

VCBeat: What is the progress of the experimental animal platform’s layout within the industrial park? How does this platform collaborate with the biopharmaceutical park for mutual development?

Li Chen (Yifang Health Valley):The establishment of experimental platforms within industrial parks is an inevitable stage in industrial development.The development of the industrial park is centered on meeting enterprise needs. The establishment of pharmaceutical and medical device companies, along with clinical trial centers, has made the demand for laboratory animals increasingly apparent. Therefore, we will introduce specialized platforms to enhance the laboratory animal supply chain, thereby providing comprehensive innovative research services to enterprises within the park.

On the other hand, we will also collaborate with the experimental animal platform to create an innovative medical incubator, providing comprehensive empowerment and full-industry-chain services from the perspectives of incubation, policy, and funding.

Arterial Network New Medicine: When it comes to innovation, how can domestic experimental animal platforms achieve a high-tech industrial transformation? How can they facilitate innovation?

Zhang Lei (Life Biosciences):It is widely recognized that laboratory animals constitute a critical infrastructure supporting the development of the biopharmaceutical industry. Therefore, we should prioritize customer needs to determine the appropriate models and services required, thereby guiding our strategic layout.

Meanwhile, we must seize the opportunity to drive innovation. China is witnessing rapid advancements in fields such as cell and gene therapy and large-molecule drugs, which present novel challenges for both domestic and international stakeholders. Therefore, there is a critical need to develop animal models that support continuous innovation.. When clients seek to validate early-stage target discovery, we can continuously provide models with independent intellectual property rights and offer third-party services.

This represents a significant area of demand. Early-stage scientific research and innovation are both challenging and critical; therefore, providing support to Chinese scientists and innovative pharmaceutical companies at this stage greatly facilitates later industrial development and accelerates the R&D of new drugs and medical devices.

VBInsight: Finally, please share your expectations for the future development of domestic laboratory animal platforms in one sentence.

Wen Zefeng (Charles River):This winter will not be particularly cold, and spring will arrive soon. We must maintain our resolve and patience, diligently implementing the 4Rs principles for laboratory animals, consistently providing high-quality laboratory animals and animal testing services, growing alongside domestic enterprises, and contributing to the healthy development of China’s biopharmaceutical industry.

Zhang Bingjie (Puhua Capital):For the experimental animal industry, which is currently in a growth phase, we hope to see greater inflow of social capital to accelerate the maturation of leading enterprises and support the refinement of the innovative drug R&D chain, thereby jointly underpinning the industry’s long-term, stable development.

Li Chen (Yifang Health Valley):The experimental animal platform not only holds long-term value but also demonstrates a significant effect in driving the biopharmaceutical industry. Therefore, we call for greater financial investment and supportive government policies.

Zhang Lei (Life Biosciences):Every industry experiences cycles of peaks and troughs, and the development of laboratory animals has reached a critical juncture. We have a vast market foundation and should be confident in ourselves. On one hand, we need to learn from international companies; on the other hand, we must seize the opportunities presented by the times and grow into an innovative company that not only possesses solid resources but also provides services to innovators.