Summary of Expert Call on China's Preclinical CRO Industry Industry Overview - The focus is on China's preclinical Contract Research Organization (CRO) industry, particularly a medium-sized private preclinical CRO firm - Notable recovery in the industry observed in Q425, with stronger trends noted in the second half of November [2][8] Key Insights Order Inflow and Growth Outlook - Order inflow for projects involving Non-Human Primates (NHP) increased approximately 30% quarter-over-quarter (QoQ) in volume terms in Q425, with service fees rising by 10-20% [2][8] - The expert anticipates sustained growth into 2026, primarily driven by improved funding and R&D demand from upstream R&D firms [2][8] NHP Pricing Dynamics - NHP prices rose about 25% QoQ in Q425, with average selling price (ASP) around Rmb130,000 [3][10] - For trials scheduled to start in Q126, prices have reached Rmb150,000 in some instances, indicating tight supply/demand dynamics [3][10] Supply Chain and Import Challenges - The supply of suitable NHPs remains tight, particularly for those aged over three years, with limited imports expected due to complex procedures [3][10] - The likelihood of exporting NHPs is low for the next three years, as they are considered a strategic resource for innovative drug R&D [3][10] Market Concentration and Competitive Landscape - The expert predicts increased concentration among the top 5-10 CRO firms due to their superior specialty and management capabilities [4][15] - Some small CRO firms are seeking qualifications to expand their capacities, but the number remains limited [4][13] Demand Recovery by Project Type - Demand for large molecules, particularly bispecific and trispecific antibodies, has recovered more robustly than for small molecules [9][8] - Innovative therapies such as peptides and CAR-T are also seeing increased demand, with tumors and autoimmunity being major therapeutic areas [9][8] Order Cancellation Trends - Order cancellations have become rare, indicating a more stable market environment [16][8] Financial Metrics - The total cost for a standard order of 64 NHPs is approximately Rmb130,000 multiplied by 64, with additional expenses around Rmb3-4 million [17][8] - Transaction prices typically range from 70-80% of quotations, reflecting a rebound in margins [17][8] Risks and Challenges - Potential risks for the healthcare industry include unexpected price cuts from government programs, intensified competition, and regulatory challenges [18][8] Conclusion - The preclinical CRO industry in China is experiencing a notable recovery, with positive trends expected to continue into 2026, driven by increased funding and demand for innovative therapies. However, challenges related to supply constraints and regulatory risks remain significant.