This article is written by | Zhang He
"Xin Koning" helped Zhong Shuishui tear open a big hole in the vaccine track.
Because the bivalent HPV (cervical cancer) vaccine (that is, "Xinkonin") is in short supply, The performance of Wantai Biology under Zhong Shui is explosive in 2021. The annual revenue increased by 144.25% year-on-year, and the net profit attributable to the shareholders of the listed company increased by 197.83% year-on-year.
And that's not all.
Shortly after the beginning of 2022, as Henan Zhengzhou, Hebei Shijiazhuang, Hainan, Chongqing, Fujian and other places have successively joined the ranks of HPV vaccine (mainly domestic vaccine) free vaccination, the competitiveness of "Xinkening" as a domestic "single seedling" has become more prominent.
However, the progress of the Watson creatures reminds Zhong That the competition is far from over.
Hepatitis E vaccine was frustrated, and the bivalent HPV vaccine broke through
In fact, Zhong's vaccine road has not been smooth.
Before the bivalent HPV vaccine was launched, Wantai Bio's hepatitis E vaccine was first introduced in 2012, that is, "Yikonin". "Yikonin" took 14 years from research and development to marketing. Moreover, it is a global exclusive product, and was rated as "China's Top Ten Scientific and Technological Progress" in 2012 by academicians of the two academies.
But many people have heard of hepatitis A, B and even hepatitis C, but they are not familiar with hepatitis E. Due to people's low awareness of hepatitis E vaccine, Yikoning's post-market sales were less than expected, and the sales revenue in 2019 was only 14.9664 million yuan, accounting for 1.26% of the revenue of the year.
Unlike hepatitis E, cervical cancer vaccine is the only variety of cancer prevention vaccines in the world, and cervical cancer is also one of the main health risks for women. The problem of small audience and low awareness of hepatitis E vaccine has disappeared from HPV vaccine.
The Global Strategy for Accelerating the Elimination of Cervical Cancer issued by the World Health Organization proposes that by 2030, 90% of girls in the world should complete HPV vaccination by the age of 15, and promote the global goal of eliminating cervical cancer through tertiary prevention and treatment paths such as vaccination, screening and treatment. About 200 countries, including China, have responded.
Prior to the listing of "Xinkonin", Merck's quadrivalent and nine-valent HPV vaccines and GSK's bivalent HPV vaccines had entered the Chinese market. Thanks to the popular science of many media and self-media, many people more or less understand some HPV vaccine related knowledge. However, imported vaccines are "difficult to find", and it has become the norm to purchase at a higher price and queue up for appointments.
In this context, the latecomer "Xinkoning" does not need market cultivation, and can directly rely on low prices to "attack the city". Among the 9-14-year-olds, the "two-needle method" of "Xinkonin" is superior to the "three-needle method" of competitors, and it is only equivalent to 38% of GSK's bivalent products in terms of price.
After "Xinkoning" was approved for listing at the end of 2019, the net profit attributable to the mother of Wantai Bio in 2020 increased by 224.13% year-on-year, and continued the momentum in 2021. It helped Wantai Get Rid of the "Sequelae of the Epidemic" faced by other vaccine and reagent companies, and its market value remained at 150 billion yuan.
The business structure has also been reversed, and the proportion of Wantai Biological Vaccine revenue reached 37.04% in 2020 and further increased to 41.78% in 2021H1.
In the future, as more provinces and cities organize preferential policies for HPV vaccination, "Xinkonin", as the current domestic "single seedling", will take the lead in benefiting from HPV vaccination publicity and market penetration. At the same time, it also paves the way for the listing of other products in the future.
Surrounded by men and women, their position is unstable
On February 11, Wantai Bio fell to a halt in the intraday.
The reason is that the market application review and approval status of the bivalent HPV vaccine declared by the Watson Biological Subsidiary on the previous day has been updated to "in the process of approval". This means that the vaccine is expected to be officially approved soon, becoming the second domestic divalent HPV vaccine approved for marketing.
Watson Biologics has said that its bivalent HPV vaccine production line is designed to have an annual production capacity of about 15 million doses. If the approval is successful, it may be "a piece of the pie" from the free vaccination from all over the world.
This is just one aspect of competition in the vaccine industry. In the face of the goal of eliminating cervical cancer, the struggle over domestic HPV vaccines has really begun.
According to the "Yaozhi Network" article, there are 3 clinical products in the field of 4-valent HPV vaccines in the mainland. At present, the fastest progress is the products of Beijing and Chengdu Institute of Biological Products, which have entered the third phase. In the field of 9-valent HPV vaccine, four companies, Bowei Biologics, Kangle Guardian, Ruike Biologics and Wantai Biologics, have entered the phase III clinical stage.
In terms of higher-priced products, the 11-valent HPV vaccine developed by China Biology Institute has entered the clinical phase II stage, and the 16-valent HPV vaccine under study by Zhejiang Pukang has also been in the clinical phase I stage.
Of course, Wantai Bio's nine-valent HPV vaccine is at the forefront in China, and it is the first domestic nine-valent HPV vaccine to be declared for clinical trials in China. Huaxi Securities expects that if it goes well, the vaccine is expected to be approved for marketing in late 2024 or early 2025.
Wantai Bio also made full preparations for the listing of the nine-valent HPV vaccine.
In the recent fixed increase plan, Wantai Bio intends to raise no more than 3.5 billion yuan, of which 1.1 billion yuan is planned to be used for the construction project of the second phase of the nine-valent cervical cancer vaccine. After the completion of the project, Wantai Bio will have 6 HPV 9 valent virus particle (VLP) vaccine stock solution production lines based on the E. coli technology platform, and the design capacity can be increased to 60 million bottles/year.
However, the current increase has not yet been passed, and it has been questioned by some investors and the media. The success of phase III clinical trials is also unknown. Before the product was approved for listing, whether Wantai Bio could seize the opportunity was still uncertain.
The threat of merck's nine-valent HPV vaccine, which is already on the market, is also ongoing.
In the survey in November last year, some institutions asked questions about the "Merck nine-valent HPV vaccine phase III clinical research registration examination successfully completed, the age should be expanded to 9-45 years old", Wantai Bio is still optimistic about this, the reason is that the HPV vaccine is still in short supply.
In addition, at that time, the market was also worried about the HPV vaccine from "second-class vaccine" to "first-class vaccine", that is, from citizens voluntarily vaccinating at their own expense to providing free of charge by the government. At that time, there may be a similar impact of drug collection, and the price of vaccines will fall.
In addition to hpv vaccines, Wantai Bio's products also include two chickenpox vaccines and a nasal spray new crown vaccine.
Among them, the chickenpox vaccine is the only means of preventing chickenpox, but the vaccination rate in the western part of the mainland is only 41%. Moreover, many places on the mainland have gradually changed the past "one-stitch method" and promoted the "two-stitch method". According to the announcement of Wantai Biology, the current live attenuated vaccine (V-Oka strain) of freeze-dried chickenpox has completed the clinical phase III trial and is expected to be approved for marketing in 2022-2023. The original novel varicella vaccine (VZV-7D) has entered Phase II clinical trials and is expected to be approved for marketing in 2025. Nasal sprays are in Phase III clinical trials.
The R&D platform builds strength, and accounting changes need to be vigilant
The core competitiveness of Wantai Biological Vaccine Research and Development is the global unique E. coli prokaryotic expression virus particle vaccine technology system created by Wantai Biological Vaccine.
According to the prospectus, unlike the eukaryotic expression system of yeast and insect cell baculovirus, the technical system has low production cost, high efficiency, easy scale enlargement, and high safety, and at the same time combines the characteristics of good immunogenicity and high safety of virus-like granule vaccines to achieve the perfect combination of production efficiency and immune effect.
Good versatility, in turn, makes the system suitable for the development of vaccines for many different pathogens. Wantai Bio's hepatitis E vaccine, divalent HPV vaccine, and nine-valent HPV vaccine under research are all based on this technical system.
In September 2019, Wantai Canghai, a subsidiary of Wantai Biologics, signed a cooperative development agreement with GSK, a top international vaccine company.
Under the agreement, GSK will pay a milestone of €134 million (approximately RMB1 billion) to develop a new cervical cancer vaccine using its cervical cancer vaccine antigen technology and share the revenue from international market sales with Wantai Biotech. Milestone payments have been made in eight times, and Wantai Canghai has received two milestone payments from GSK. This shows that Wantai Canghai's technology is recognized by GSK.
However, outside of technology, it is necessary to pay attention to the changes in the accounting treatment of Wantai Bio.
On December 24 last year, Wantai Bio issued the "Announcement on the Change of Accounting Estimates": Before the change of accounting estimates, the company based on the principle of prudence included all expenses of internal drug research and development projects in the profit and loss of the current period when incurred.
After the change, all R&D expenditure before drug R&D enters the phase III clinical trial phase is classified as research phase expenditure, and all directly aggregated R&D expenditure after drug R&D enters phase III clinical trial phase is classified as development phase expenditure.
According to accounting policy, all expenses incurred in the research expenditure phase are included in profit or loss; expenditures in the development phase can be capitalized when certain conditions are met, and expenditures that do not meet the conditions are included in profit or loss.
Since the cost of Phase III clinical trials is not low, such a change in accounting estimates can "reduce" expenses and "improve" performance through R&D capitalization.
This is somewhat sensitive for Wantai Biologics, which has multiple vaccines entering the third phase of the clinic or later.