Text/Ye Tan ☞ Financial Woman | Poisonous tongue kindness
This winter, the global epidemic is disturbing people's hearts again.
In two years, none of the world's seven continents have been spared, infecting 300 million people and killing nearly 5 million people.
Entering 2022, the number of new cases in the United States in a single day will break the global record, and the cumulative number of confirmed cases of new crown in the world will exceed 300 million.
The new crown vaccine is highly expected by all countries. It is hoped that it will build an immune barrier and resist the epidemic.
The smallpox that had made humans smell discolored for hundreds of years was eliminated in 1977 because of the effects of vaccines; rabies, with a fatality rate of nearly 100 percent, was appalling, and there was little effective means except vaccines.
The epidemic has made everyone realize the importance of vaccines for the development of human society.
In fact, before the COVID-19 outbreak, vaccines were a small, slow-growing, underappreciated industry.
From 2014 to 2019, the global vaccine market saw total sales from $27 billion to $30 billion, with a compound annual growth rate of less than 2%.
The same is true of China's vaccine companies.
Before 2020, many Chinese vaccine companies have just left the profit and loss line, and some of them have even been questioned because of the vaccine fraud case of Changsheng Biologics, not to mention that domestic vaccines will shine in the world a year later.
Among China's vaccine companies, Zhifei Bio is the most stable performance in recent years, and the market value of A shares has also been ahead of a long time.
This time, we will start from the "domestic vaccine leader" Zhifei Biology, using three soul tortures to restore the true status quo of vaccine companies.
Why didn't the vaccine "faucet" make a "faucet" vaccine?
Speaking of Zhifei Biologics, everyone's first question must be, why did you not make a career in the new crown vaccine as the vaccine company with the highest market value in China?
This needs to start with the technical route of the vaccine.
At present, the most brilliant chinese medicine and Kexing vaccine in China adopt inactivation technology.
Inactivation is the most mature vaccine technology.
Essentially, it is to cultivate a large number of viruses, then kill these viruses so that they are not toxic, and after injecting them into the human body, stimulate the body to produce antibodies.
The advantage of this route is that the side effects are small, and the disadvantage is that the culture of the virus takes time, resulting in slow research and development.
The reason why our inactivated vaccines can be so fast is mainly because there are many P3 laboratories available for research and development in China, and the huge production capacity has accelerated the research and development progress.
It can be said that this is smashed with resources.
Mr. Gao Fu of the CDC said so, Sinopharm and Kexing borrowed the P3 laboratory of the CDC, and the Wuhan Institute borrowed the laboratory of the Wuhan Institute of Virology.
The most effective Pfizer and Modena vaccines overseas are mRNA technology. In China, this route has Watson Bio and Fosun Pharmaceutical Research and Development.
mRNA essentially injects the mRNA of the virus directly into the human body, and uses human cells in the human body to synthesize the virus's spike protein, thereby stimulating the body to produce antibodies.
This technology is fast to develop, low cost, short preparation cycle, in response to this sudden virus has a time advantage.
mRNA is difficult, delivery system is difficult, because mRNA is less stable and easily degraded. mRNA, before the epidemic, was mainly used to treat cancer, and the application of technology was more attractive.
The domestic mRNA route, Watson Biology is still in the third phase of the clinic, Fosun in the consignment of Pfizer vaccines, has become a domestic sense of presence is not strong vaccine technology route.
Zhifei Bio has developed a recombinant protein vaccine, which has been sold in many provinces in China according to the information given by the secretary of the board of directors of Zhifei.
Recombinant proteins, which use the key proteins of the virus or hand-held conjugate domains for vaccine development, typically require an adjuvant to stimulate an immune response or multiple injections to achieve the desired immune response.
The main problem with this route is that it requires multiple injections, and Zhifei Bio's new crown vaccine requires three doses.
In terms of progress, this technical route is second only to inactivated vaccines in China.
But because it is not fast enough, after the rapid promotion of inactivated vaccines, Zhifei's recombinant protein vaccines are less concerned about people.
This means that wise flying creatures can't do it, not so.
Before the development of the COVID-19 vaccine began, no one could say for sure which one worked best and which one developed the fastest.
If we look at it from the perspective of a strategy maker, of course, it is the result of various technologies going hand in hand, just to finally build the Great Wall of epidemic prevention.
Therefore, Zhifei Bio, which adopts the recombinant protein technology route, is an indispensable part of the anti-epidemic strategy.
If the initial inactivated vaccine is not as far as expected, the recombinant protein vaccine will immediately be on the front line.
The road to the prosperity of the vaccine "leader"
The second question follows.
Zhifei Bio's new crown vaccine has not become a "hit", why is it still firmly occupying the position of China's highest market value vaccine company?
It starts with the history of the company.
Under the epidemic situation, we have seen the great contribution made by epidemic prevention personnel through various channels.
From the perspective of Zhifei Bio, an epidemic prevention personnel, he grew into the chairman of a successful vaccine company.
Jiang Rensheng, the founder of Zhifei Biotech, started his career as an ordinary Guangxi epidemic prevention personnel.
Looking back at Jiang Rensheng's experience, we will find that domestic vaccine companies want to gain a firm foothold at the beginning, relying more on channels and resources than on technical advantages.
Born in a remote rural area of Guangxi, Jiang Rensheng witnessed the poor medical conditions in his hometown since he was a child, and the difficulties of his parents' medical treatment gave him the idea of becoming a doctor.
In 1977, the college entrance examination was resumed, and Jiang Rensheng was admitted to the Guilin Medical College, which was already a very good result in a small county.
However, in the end, he failed to become a doctor and was assigned to work at the Guanyang County Health and Epidemic Prevention Station, where his daily work was inextricably linked to vaccines.
In the past 20 years, he has grown from a county-level epidemic prevention personnel to a section chief and general manager of the Guangxi epidemic prevention station, and has a very in-depth understanding of vaccines in his work.
In 2002, Jiang Rensheng and two close friends partnered to buy a vaccine company and renamed it "Chongqing Zhifei Bio".
Since China's vaccine research and development capabilities at that time were far inferior to overseas enterprises, Jiang Rensheng aimed at the vaccine agency business.
In the growth history of Zhifei creatures, we can find several important nodes.
In 2005, the A+C meningitis vaccine accumulated the first bucket of gold, listed in 2010, and in 2017, because of the outbreak of HPV vaccine performance of Merck, the new crown epidemic ushered in a revaluation of the value in 2020.
The "blockbuster" vaccine has become a ladder for the company to rise step by step.
Both the A+C meningitis vaccine and the HPV vaccine are exclusive agents, bringing great performance improvements to the company.
Here we select Zhifei Bio to act as an agent for Merck HPV vaccine after listing to confirm the growth logic of vaccine companies.
Vaccine companies are characterized by both high-tech enterprises and consumer enterprises.
From 2011 to 2016 after the listing, the company's revenue has hardly increased, or even declined slightly, but it insists on investing in development and investing more capital expenditure, a bit like a high-tech enterprise.
Since 2017, the company's revenue and profits have doubled, and there are a large number of cash inflows, and capital expenditures are insignificant compared to consumer enterprises.
The watershed in 2017 is Merck's HPV vaccine, pentavalent wheel vaccine, pneumonia vaccine and so on.
HPV is a typical class II "blockbuster" vaccine with high gross profit and high market demand.
Zhifei agent, although to give Merck a penny (agent product gross profit margin of 35%, independent product gross profit margin of more than 85%), thereby directly pulling down the company's gross profit margin, but can not stand the agent's huge drive to revenue.
The reason why Zhifei can represent Merck's vaccine is, on the one hand, of course, the management led by Jiang Rensheng has channels and good vision.
On the other hand, it is also because the company's sales team is strong enough.
In the past ten years, sales personnel have accounted for the largest proportion of Zhifei biological personnel.
In 2020, the number of the company is 3380, of which 1905 are sales personnel, accounting for 56.36%; production personnel are 763, accounting for 22.57%; technical personnel are 414, accounting for 12.25%; finance, administration, comprehensive management and other personnel are 298, accounting for 8.82%.
Source: wind (the number of salespeople in orange in the picture)
A large number of sales personnel correspond to a comprehensive and meticulous marketing network.
At present, the company has covered 31 provinces/autonomous regions/municipalities directly under the central government, more than 300 prefectures and cities, more than 2,600 districts and counties, and more than 30,000 grass-roots health service points.
It can obtain the agency of high-quality vaccines and can effectively roll out and sell them throughout the country.
This is probably the main advantage that Zhifei Bio can now lead in the performance and market value of A-share vaccine companies.
Where is the moat of the vaccine company?
At this point, the third question arises.
Does the vaccine company have technical content, and what is the situation in the research and development process? How to judge the moat of a vaccine company?
First of all, we need to know that vaccines are an atypical high-tech industry.
The main difficulties of vaccines are the long development time, clinical and marketing is very dependent on resources and channels.
The process of vaccine development is generally very long, usually taking 8-20 years.
Preclinical studies usually take 5-10 years and usually include strain selection, process studies, prescription studies, quality studies, animal experiments, etc.
The clinical stage, including the application of clinical and clinical trial institutions, and the registration of clinical trials (Phase I, Phase II, Phase III), usually takes 3-10 years.
In this process, it is very likely that it will be stopped or terminated because it does not meet the preset purposes and requirements, and if the clinical process is successfully completed, the research and development process will be basically completed.
This is followed by the registration phase.
Not only do you need to submit information, but you also need to try to produce, verify samples, if they are qualified, in order to get production approvals, registration certificates, etc., this process also needs 2-5 years.
The new crown vaccine is a special case among vaccines.
In the face of the pandemic, countries have spent a lot of money to accelerate the entire process of research and development to market, and countries have given emergency authorizations for the new crown vaccine to varying degrees, so that it can be quickly launched in less than two years.
The new crown is a major epidemic for mankind, but for Chinese vaccine companies, the new crown vaccine is the first time in the world to recognize Chinese vaccines, and it is an opportunity for Chinese vaccine companies to appear on the international stage.
Vaccine development is indeed difficult, and the failure rate is not low.
However, unlike high-tech enterprises such as chips and information technology, the advantages and disadvantages of leading and small institutions are the same.
As one of the world's four major vaccine companies, Pfizer, the US vaccine company that relied on the new crown epidemic, is actually a small German institution BioNtech cooperation.
Before the epidemic, BioNtech, like China's vaccine companies, was a small transparency in the shadow of the four major vaccine manufacturers.
The other three major vaccine companies, in addition to Merck embarked on the road to develop special drugs, the remaining two are also like Pfizer, to invest in the development of new crown vaccines.
GlaxoSmithKline invested £130 million in Curevac in 2020 to collaborate on the development of five mRNA-based vaccines.
Sanofi and Translate Bio are working on mRNA vaccines, but the latter is actually not as powerful as BioNtech, and progress is slow. Whether Sanofi's covid-19 vaccine can be released depends on this year.
Where are the advantages that big factories can't avoid? It's clinical and marketing.
Clinical difficulties are in organizing volunteers and related hospital resources.
The leaders have been in vaccine research and development for a long time, and the accumulation of resources in this area is relatively rich, and the relevant resources can be organized relatively quickly and efficiently.
If the clinical performance is expected, large manufacturers can also use their sales channels and certification advantages around the world to obtain vaccine certification in various countries and finally sell them.
This is why a large number of small biotechnology R&D enterprises, as well as domestic R&D-based CXO companies, will attract the attention of capital.
The domestic vaccine companies this time actually have the research and development assistance of national teams such as the Chinese Academy of Sciences and the National Institute of Virology.
Research and development technology is a difficult problem for vaccine companies, not the most difficult to solve.
Doing a good job in clinical and sales is the way for vaccine companies to survive.
Chinese vaccines cannot stop
Finally, let's talk about the future of Zhifei Biology.
For a business, it is naturally a good thing to be able to make money.
For Zhifei Biology, the leader of domestic vaccines, we naturally hope that he can set an example.
Not only in terms of revenue and market value performance, but also in the strength to set an example.
As mentioned earlier, when the company can't make money, the investment is not a lot, from the perspective of R & D expenditure, the company's R & D expenditure is also increasing year by year.
After making money, R&D expenditure has increased sharply, from less than 100 million yuan in 2017 to 480 million yuan in 2020, and the company's R&D investment in the first half of 2021 has reached 790 million yuan.
What is the effect of this R&D expenditure?
Key data from the phase III clinical trial of the recombinant COVID-19 vaccine, developed in collaboration with the Institute of Microbiology of the Chinese Academy of Sciences, were revealed in August 2021.
After international multicenter phase III clinical trials in Hunan Province, Uzbekistan, Indonesia, Pakistan and Ecuador in China, the protective efficacy of COVID-19 for any severity is 81.76%, meeting the WHO requirements of the NEW CROWN vaccine effectiveness standard.
Among them, the protective effect on severe cases and above of COVID-19 and deaths is 100%.
Zhifei's vaccines play a role in industrial research and development for subsequent large-scale supply, ideally with a production capacity of 1 billion in 2022.
According to the latest reply of the secretary of the board of directors of Zhifei Bio on interactive easy, the company's new crown products have realized the supply of more than 20 provinces such as Anhui, Zhejiang, Jiangsu, Chongqing, Beijing, Sichuan, Heilongjiang, Jilin and Liaoning.
At present, the company is promoting the certification of vaccines to the sea.
At the same time, in the face of the mutation of the new crown virus, the company continues to follow.
The same is the interactive information, the company said that it has carried out research work on the mutated strain with the Institute of Microbiology of the Chinese Academy of Sciences, and used the pseudoviral cross-neutralization test method to detect the serum of subjects 1 month after the full immunization of 3 doses of recombinant new crown vaccine, and has achieved certain positive results.
Second, the company currently has a total of 26 research projects, mainly self-developed meningitis and two influenza vaccines.
Among them, the 23-valent pneumococcal polysaccharide vaccine and influenza virus cleavage vaccine have completed clinical trials.
In the phase III trial of the two human rabies vaccines, these products are expected to bring better revenue to the company after they are subsequently approved for marketing.
As can be seen from the chart below, these types of vaccines are the most prominently sold globally.
For Zhifei Biologics, as well as major Chinese vaccine companies, the new crown vaccine has given them a rare opportunity to go abroad and establish their own overseas clinical resources, sales resources, certification resources and so on.
More critically, the new crown vaccine has made powerful companies make a lot of money.
For example, according to the latest financial report of Kexing, it is calculated to make 180 million yuan a day.
In the next step, how to make good use of these overseas resources and large profits, so that more Chinese vaccines can be recognized by the world, is worth our expectations.
This week's Power new entity column ends here.
Our original intention remains unchanged, to find out the unique entity enterprises in China, and actively help the new entity enterprises and help the growth of Chinese enterprises.
If sandalwood has a new entity company that is optimistic, welcome to leave a message below the article to share, welcome to give us a manuscript.
Let's select new entities together to help China's new economy.
(Disclaimer: This article is an objective analysis made by Ye Tan Finance based on public information, and does not constitute investment advice, please do not use this as an investment basis.) ）
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