Phosphoramidite monomers are poised for robust demand growth as small nucleic acid drugs gain traction, with companies embedded in multinational pharmaceutical supply chains positioned to benefit, according to a research report by Caitong Securities.

Small nucleic acid drugs, recognized for their unique molecular structures and therapeutic mechanisms, are emerging as promising candidates for treating various diseases. These drugs target disease-related genes or RNA to enable precision medicine. However, their development is complex, with phosphoramidite monomers—a critical raw material—playing a pivotal role by: (1) serving as a foundational component in synthesis, (2) enhancing drug stability and bioactivity, and (3) driving innovation in R&D.

Oligonucleotides constitute the primary raw material and cost driver in nucleic acid drug production. The dominant upstream synthesis method, solid-phase phosphoramidite triester chemistry, involves steps like deprotection, coupling, oxidation, and capping to yield crude oligonucleotides. Subsequent purification, ultrafiltration, and lyophilization produce intermediate active pharmaceutical ingredients. Given that oligonucleotides account for the bulk of nucleic acid drugs, their production is central to cost structures.

SphericalInsights projects the global nucleotide market (including oligonucleotides and monomers) to reach $730 million in 2023, with China as the largest producer—primarily for export. Approximately 90% of global nucleotides are used in nucleic acid drug manufacturing, leaving only 10% for sectors like nutraceuticals and agriculture.

As demand for small nucleic acid drugs surges, phosphoramidite monomer consumption is expected to follow suit. With the market currently reliant on multinationals like Novartis, Roche, Sanofi, and Alnylam for end-product development, supply chain participants stand to gain.

Investment recommendations include innovative drug and device firms such as INNOVENT BIO (01801) and REMEGEN (09995), alongside CXO and API players like WuXi AppTec (603259.SH) and Jiuzhou Pharma (603456.SH). Risks include potential anti-corruption campaign fallout, R&D uncertainties, sales shortfalls, and steeper-than-expected price cuts under centralized procurement.