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July 11, 2019 | Pharmaceutical
Lactoferrin as an ingredient has widespread clinical benefits which range from treating diarrhea and hepatitis C, to protect against bacterial infections and cancer. These pharmacological and nutraceutical benefits of lactoferrin have been pivotal in its widespread applications across pharmaceuticals, food, and other industries. The major source of lactoferrin includes milk (both human milk, and bovine milk), where human milk concentrations are higher than those found in bovine milk.
However, despite the efforts being undertaken by regional government agencies and non-profit organizations for promoting breastfeeding, the comparatively lower rates of breast-feeding have been instrumental in driving the demand for infant formula with added lactoferrin, especially in China.
Bovine lactoferrin is a product derived from bovine milk, as a product of fractionation of the milk, along with other by-products such as cheese, whey protein, etc. In terms of revenue, the Global Bovine Lactoferrin Market was valued at USD 507.3 Mn in 2018 and is projected to reach USD 551.8 Mn by 2026. The market is anticipated to exhibit a CAGR of 1.0% in terms of revenue.
"Infant formula application emerged as the largest consumer of bovine lactoferrin globally in 2018"
Among the industry verticals where lactoferrin has found its applications as an ingredient of great value, the infant formula sector emerged as the largest consumer of lactoferrin globally. There is a huge demand for lactoferrin as an added ingredient in the infant formula market, which has persistently soared over the years, considering the clinical benefits of added lactoferrin in infants and pediatrics. However, other industry verticals are still in their nascent stages and are yet to explore the clinical effectiveness of lactoferrin in its full potential, especially in the pharmaceutical industry.
The major reason attributable to this lack of research being conducted in the lucrative pharmaceutical industry is the requirement of purity level of pharmaceutical-grade lactoferrin, and lack of availability of the product. According to our Key Opinion Leader, Dr. Jagan Billakanti (Senior Bioprocess Scientist), “currently there are very few companies offering pharmaceutical-grade lactoferrin, due to complex process demanded by the highest purity of lactoferrin (98% purity), and price of the final product.” Dr. Jagan Billakanti also mentioned, “as the purity requirement for lactoferrin increases, from 90% pure lactoferrin in the food industry, to 98% pure lactoferrin in pharmaceuticals, there is an estimated 2 to 4 fold increase in prices of lactoferrin (per kg.). The major reason for this is the complexity of the process, and stringent control parameters during the process which ultimately lead to significantly higher price of the final product.”
"Regulatory reforms pertaining to the use of lactoferrin globally have governed price fluctuations in the market"
The demand for bovine lactoferrin has seen a gradual increase over the past decade, especially in the infant formula industry. This demand has been augmented by opening of new avenues and application areas for bovine lactoferrin including nutraceuticals, food, and pharmaceuticals to some extent. However, regulatory reforms and changes in regulatory policies in a stringent and regulated infant formula market, especially in China, led to an exponential increase in prices of bovine lactoferrin in 2018. According to various sources and interviews with market players, the prices of bovine lactoferrin skyrocketed from an estimated US$ 200 per kg., in 2015 to US$ 1,950 per kg., in 2018. The reform in Chinese GB standards, pertaining to the purity requirement of lactoferrin in infant formula, led to a huge gap in supply-demand, propelling the prices in 2018.
One of our respondents and a Sr. Bioprocess Scientist – Dr. Jagan Billakanti in his interview quoted, “the lactoferrin market for infant formula was largely dependent on China prior to the Chinese GB Standards due to China being the largest consumer of infant formula. This along with new purity requirements for lactoferrin in infant formula laid down by the Chinese Standards in 2018, led to only a handful of players possessing the capabilities to offer 95% pure lactoferrin for those large quantities. This led to a huge supply-demand gap, and skyrocketing of the prices of lactoferrin in 2018.” However, the prices of bovine lactoferrin are expected to decline gradually during the forecast period, citing entry of new players offering lactoferrin at 95% purity, along with the opening of new regional markets and application areas for bovine lactoferrin.
"The market demonstrates intense competition among existing players, with new players aiming to capitalize on emerging opportunities"
The market for bovine lactoferrin is a semi-consolidated market, with top 5 players accounting for less than 50% share of the global market in 2018. However, existing players are focusing on increasing their production capacities, aiming at catering the rising demand for bovine lactoferrin during the forecast period from various application areas including pharmaceuticals and infant formula. Players such as Synlait Ltd., and Bega Cheese Ltd., have already started the expansion of their manufacturing facilities during 2018-2019. The entry of new players in the highly regulated bovine lactoferrin market is projected to drive the decline in prices of bovine lactoferrin, by reducing the supply-demand gap during the forecast period.