China Galaxy Securities: Experimental animals just need mice and monkeys to develop innovative drugs are booming

The Zhitong Finance App learned that China Galaxy Securities released a research report saying that experimental animals are just needed to develop innovative drugs, and the industry barriers are deep. The two major segments have medium- to long-term growth logic: the humanized mouse track has stronger growth certainty and slower cycle fluctuations; the experimental monkey track has strong supply constraints, and short-term price increases have brought significant performance flexibility. Leading domestic companies rely on independent germplasm resources, integrated model+service capabilities to continuously replace domestic production and expand overseas customers, and their global market share is expected to increase in the long term.

The main views of China Galaxy Securities are as follows:

Experimental animals are just needed for new drug development. The industry is developing rapidly, and there is plenty of room for domestic substitution and overseas travel

Experimental animals are the “active reagents” needed at the core of pre-clinical research and development of innovative drugs. The downstream covers university research institutions, innovative pharmaceutical companies, and CRO companies. It runs through the entire process of target verification, efficacy screening, and toxicological safety evaluation. Qualifications, breeding cycles, and heavy asset investment build high industry barriers. As global and domestic pharmaceutical R&D spending continues to expand, in 2025, China's pharmaceutical R&D expenditure will reach 45.9 billion US dollars, and the pre-clinical CRO market size will be 3.6 billion US dollars, directly driving the rapid growth in demand for experimental animals. In 2023, the global model animal market was 10.7 billion US dollars, the Chinese market was 5.7 billion yuan, and the domestic compound growth rate for the period 2022 to 2027 was 18.1%, which is significantly higher than the global growth rate of 9%. There is plenty of room for domestic replacement and overseas travel in the industry. Leading European and American leaders rely on century-old germplasm resources and global compliance services. Domestic companies have taken the lead in non-human primate racing, and gene-edited mouse technology is catching up fast, yet there is still a generational gap in high-end germplasm and global integrated services.

The main line of mice and monkeys is booming, and products+services are growing

There are many types of experimental animals, but with mice and experimental monkeys as the two main carriers, the segmented racetrack is booming, and the number of products+supporting services is distributed simultaneously, and there is a certain differentiation in growth drivers. 1) Experimental mice: They have high genetic homology, low breeding cost, and strong model plasticity; in recent years, more than half of all human antibodies approved by the FDA and NMPA rely on genetically modified mice. Genetically modified mice and humanized mice have become mainstream, meeting the development needs of all-human antibody drugs. 2) Experimental monkey: Due to its 90%-98% genetic homology to humans, it is an irreplaceable species for the toxicology and immunogenicity evaluation of macromolecular drugs such as monoclonal antibodies, ADC, and oligonucleotides, and there has been a long-term mismatch between supply and demand. The demand-side macromolecule innovation pipeline continues to expand and increase procurement volume; the supply-side crab-eating monkey breeding cycle lasts 6-7 years, and the industry population continues to age, and new breeding capacity is limited. As a result, experimental monkeys are currently experiencing a new cycle of price increases, and the spot unit price will rise to 180,000 yuan/piece in 2026.

Risk warning: policy and regulatory compliance risks, downstream demand fluctuations and industry competition risks, germplasm resources and supply chain risks, technology iteration and intellectual property risks, production and operation and biosafety risks.