• News
• 2024-06-07

Huaxi Biotech Revamps Collagen Market, Engages "Ingredient Enthusiasts"

"Compared to blindly following the trend of buying international big-name skincare products in the past, I now prefer to study the ingredients," Wang Mengni, a post-90s consumer, told the reporter from Xinjing News' Beike Finance, saying that in the past two years, she and her friends have been carefully examining the core ingredients and their concentrations when choosing skincare products. If they encounter unfamiliar ingredients, they will search and learn about them on social media. "It not only increases knowledge but also ensures whether the products have the claimed effects, making their use more reassuring."

Wang Mengni's consumer insights are not an isolated case. The reporter found through social media searches that topics such as "ingredient skincare" and "effective skincare ingredient analysis" have maintained a high level of popularity in recent years. As consumers' skincare concepts shift from "basic maintenance" to "precise efficacy," a group of domestic technology-driven biotechnology companies and skincare brands that started with scientific research and raw material development have also ushered in their own "window of opportunity," entering a new era driven by technology.

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Who is competing in the billion-dollar market?

Among the many popular ingredients, recombinant collagen is undoubtedly the one at the "forefront of the trend," attracting more and more consumer attention. Wang Mengni, who was recently choosing skincare products for her mother, became fascinated with it and considered it a "standard" ingredient for product selection. "The process of skin aging is the process of collagen loss. If you want to fight aging and firmness, recombinant collagen is the star ingredient," Wang Mengni told the reporter.

Xinjing News' Beike Finance reporter learned from research that compared with traditional animal-derived collagen, recombinant collagen has more advantages in bioactivity, water solubility, and other aspects, showing good effects in anti-aging and skin repair. With these advantages, recombinant collagen has gradually entered the fields of medical treatment and beauty skincare, becoming the "national raw material light" that will sweep the skincare industry after hyaluronic acid.

The concept of recombinant collagen is hot, and companies focused on terminal products are also competing to enter the market. According to data from Frost & Sullivan, the market size of China's recombinant collagen terminal products in 2022 was 18.5 billion yuan, and it is expected to grow to 108.3 billion yuan by 2027, with the market penetration rate increasing from 46.6% in 2022 to 62.3% in 2027. Among them, the market size of functional skincare products will reach 64.5 billion yuan by 2027, becoming the largest proportion in the application of the recombinant collagen market.

Against the backdrop of the continuous release of growth potential in terminal demand scale, what is the production situation of recombinant collagen? A report released by Zhiyan Consulting pointed out that with the improvement of technical levels in China's recombinant collagen industry in recent years and the continuous expansion of downstream application fields, the output and demand of China's recombinant collagen industry have grown rapidly. Data shows that the output of China's recombinant collagen industry was 7.2 tons in 2016, and by 2022, the output had increased to 150.8 tons. Correspondingly, on the demand side, there is also a trend of year-on-year growth.

When recombinant collagen faces huge development potential on both the supply and demand sides, some "technology giants" that have advantages in both the raw material and skincare product terminals naturally attract market attention. Among them, Huaxi Bio, a biotechnology company driven by synthetic biotechnology innovation and a full industrial chain platform company of biomaterials, is making efforts in both the raw material and product terminals of the recombinant collagen track, and is continuously launching new products with scientific research "hard strength," which has attracted high attention and recognition from the market as soon as it entered the market.

Empowering the entire industry chain, multiple products have been launched one after another.

There has been a market view that questions Huaxi Bio, as the leading enterprise in the hyaluronic acid industry, entered the recombinant collagen field relatively late. Faced with a rapidly developing market, "latecomers" will inevitably miss the first opportunity.However, some opinions suggest that the current competitive landscape of the recombinant collagen industry has not yet stabilized. As a biotechnology company driven by synthetic biology, Huaxi Bio's entry into the market will bring new vitality.

The Eggshell Research Institute believes that in recent years, the development of synthetic biology has brought revolutionary breakthroughs to recombinant collagen. By designing and constructing efficient and specific expression vectors, precisely regulating the expression levels of collagen, and combining the advantages of various expression systems, the yield and purity of recombinant collagen have been greatly improved. These advancements have not only increased production efficiency but also expanded the application prospects of recombinant collagen. Huaxi Bio's "underlying genes" driven by synthetic biotechnology have become the core driving force for the company to enter and catch up.

Beijing News Shell Financial reporters, after sorting out and understanding, found that Huaxi Bio's entry into the recombinant collagen track was not "achieved overnight." In recent years, Huaxi Bio has deeply cultivated and laid out in the recombinant collagen track with scientific research as the starting point, and has already made a strong "presence."

As early as April 2022, Huaxi Bio acquired 51% of the equity of Beijing Yierkang Bio for 233 million yuan, becoming its controlling shareholder and officially entering the collagen industry; in August of the same year, the company launched three products: animal-derived collagen, recombinant human-derived collagen, and hydrolyzed collagen (peptides), to meet the needs of different fields such as medical, food, and regenerative medicine.

In 2023, with the help of the synthetic biology technology platform, Huaxi Bio successfully developed its own proprietary recombinant collagen, expanded its product matrix with a variety of biomaterials, and launched four new products of recombinant type III collagen raw materials, upgrading the matrix of recombinant collagen raw materials from the supply side. According to Huaxi Bio's disclosure, the current production capacity of recombinant collagen by Huaxi Bio has reached a ton-scale level.

Breakthroughs in the raw material end are also continuously empowering Huaxi Bio's medical terminal business and functional skincare business, allowing the company to achieve quality and efficiency improvements throughout the entire industry chain.

In January 2024, Huaxi Bio's recombinant collagen wound dressing obtained a second-class medical device registration certificate; in April, its brand Runbayan laid out in the collagen field, launching the collagen product Runbayan Collagen "Tight and Plump" single-use ("Vital Bomb" single-use), completing the strategic layout of the anti-aging core product line; in September, Huaxi Bio's core functional skincare brands Runbayan and Kuadi respectively launched Runbayan Collagen "Tight Shaping Cream" and Kuadi's main medical recombinant type III collagen dressing Kuadi "Red Cross" new medical device product series, focusing on the functional skincare product matrix of recombinant collagen ingredients is gradually becoming clear. In addition, according to relevant disclosures, Huaxi Bio has developed a variety of second-class medical device terminal products such as sprays and freeze-dried powders around recombinant collagen raw materials, which are expected to gradually obtain certificates and go to market in the next 1-2 years; independently developed third-class medical device collagen terminal products are expected to enter the clinical stage in the second half of 2024.

Huaxi Bio has always been at the forefront of the industry in the industrialization of bioactive substances, especially the production scale and application fields of hyaluronic acid have reached an international leading level. The existing advantages in this field will also support Huaxi Bio to go far and steady in the track of recombinant collagen. Caitong Securities released a research report pointing out that recombinant collagen has not yet entered the era of stock competition. The "2024 Recombinant Collagen Industry White Paper" also has the same view - in recent years, from the perspective of market space, recombinant collagen has become a track with strong growth potential, and is expected to replicate the development path of the hyaluronic acid industry, from the supply side technology breakthrough to the demand side popularization and application scenario expansion, to achieve a virtuous cycle, and ultimately promote the market scale from tens of billions to hundreds of billions.

High investment builds technical barriers, aiming at "differentiation"

The production of recombinant collagen depends on bioengineering technology. In addition to the need for "accumulation" on the time axis, to "immerse in the game" in exchange for market space, it is more necessary for companies to accurately grasp "technology power".In recent years, Huaxi Biotech has consistently increased its R&D expenditure, built technological barriers, and expanded its synthetic biology domain. According to the company's recently released semi-annual report, Huaxi Biotech's R&D investment increased by 7.4% year-on-year to 201 million yuan, compared to 187 million yuan in the same period of the previous year. The total R&D investment as a percentage of operating income increased by 1.06% to 7.13% year-on-year. The number of R&D personnel also increased from 813 in the first half of 2023 to 867, with the proportion of R&D personnel in the total company headcount rising to 19.63%.

The high investment has provided support for Huaxi Biotech's full industry chain R&D from basic research to terminal applications and has ensured its continuous innovation capabilities.

At present, as more and more companies focus on recombinant collagen, how will the industry develop? Open Source Securities pointed out that in the long run, as more similar products appear on the market, a differentiated strategy will become a key factor for corporate success, including technological reserves, diversified product layout, and differentiated brand building targeting consumers.

The Eggshell Research Institute believes that the relationship between recombinant collagen and existing market materials is not simply competitive; on the contrary, the essential effects of recombinant collagen can be further amplified through collaboration with other materials or projects.

In response to the above industry judgment, Huaxi Biotech has provided the market with a successful case of effectively combining recombinant collagen with hyaluronic acid to achieve "1+1＞2"—by deeply researching hyaluronic acid, Huaxi Biotech has launched the exclusive technological application "Hyalu-Collagen Flash Charge" technology. It uses hyaluronic acid Hybloom™ with a molecular weight less than 1000Da as a "guide" to carry collagen to the deep layers of the skin.

Through the creative combination of "recombinant collagen + hyaluronic acid Hybloom™ micro-truth," with high-quality raw materials and scientific penetration methods, Huaxi Biotech has brought better solutions for recombinant collagen skincare. It has proven the new possibilities of hyaluronic acid and recombinant collagen, which are not "either-or" substitutive relationships but can work synergistically to achieve "1+1＞2."

Regarding future layout and development, Huaxi Biotech has stated that on the raw material side, the company has achieved an important transformation from a raw material supplier to a solution provider. Subsequently, it will further improve the raw material efficacy evaluation and formulation application technology service system to provide customers with a complete set of solutions. At the terminal, Huaxi Biotech will be guided by consumer demand, fully leverage the advantages of a full industry chain platform company, and use technological strength to create good products, providing consumers with more high-quality and high-performance domestic products.