Only one shot of HPV vaccine? Dragon head stock Qi was flash crashed!

The news that the HPV vaccine "only takes one shot" has hit several concept stocks in an instant.

On April 14, Zhifei Bio quickly plunged more than 18% in the intraday, and the total market value fell back below 200 billion, and the next day it still failed to stop the fall.

On the news side, the WHO official website recently released a message showing that from April 4 to April 7, the WHO Strategic Advisory Group on Immunization (SAGE) held a meeting to review the evidence for 1 dose of human papillomavirus (HPV) vaccination, and concluded that a single dose of HPV vaccine can provide reliable protection, and the effect of 2 or 3 doses of vaccination is comparable. Affected by this news, Wantai Biological and Watson Biological have followed suit.

As of the close of trading on April 15, Zhifei Bio continued to fall, and finally closed at 115.98 yuan / share, a decline of 0.02%, and the latest market value was 185.6 billion yuan.

"Just a stitch" hit the stock price hard

Cervical cancer ranks fourth in the world for the highest incidence of malignant tumors in women, and is the only malignant tumor that is considered to have a known cause among human tumors, but the incidence and mortality of cervical cancer have not decreased significantly.

The burden of cervical cancer in mainland China is relatively heavy, and the incidence of cervical cancer is highly correlated with HPV infection, after years of research and development, there are currently 5 HPV vaccines approved for marketing in the world, namely GlaxoSmithKline's divalent HPV vaccine, Merck's quadrivalent HPV and nine-valent HPV vaccine, as well as Wantai Bio's bivalent HPV vaccine and Watson Biological divalent HPV vaccine.

According to information released by WHO, it reviewed the evidence for 1 dose of human papillomavirus (HPV) vaccination and concluded that a single dose of HPV vaccine provides reliable protection and is comparable to the effectiveness of 2 or 3 doses of vaccination regimens.

In other words, one injection of hpv vaccine is the same as three injections.

Meanwhile, WHO Assistant Director-General Nothemba (Nono) Simelela said a single dose would cost less, take up fewer resources and be easier to administer. It also makes re-vaccination campaigns for different age groups easier, reduces the challenge of having to follow up and manage multiple vaccinations, and saves health money and human resources that can be used for other health priorities.

In this regard, SAGE recommends the following immunization procedures: 1 dose or 2 doses for women aged 9-14 years (the highest priority population), 1 dose or 2 doses for women aged 15-20 years, and 2 doses for women over 21 years of age (with an interval of 6 months). Immunocompromised individuals, including those living with HIV, should receive three doses if feasible and at least two if not. Evidence on the efficacy of single doses in this group is limited.

Public information shows that cervical cancer is mainly caused by human papillomavirus (HPV), which is the main cause of cancer in women. HpV vaccines are highly potent, prevent almost 100% vaccine type-specific HPV infections and diseases, and significantly reduce cervical cancer risk at the individual level.

It is reported that there are currently three HPV vaccines licensed: bivalent vaccines can prevent HPV16/18; quadrivalent vaccines can prevent HPV16/18/6/11; and nine-valent vaccines can prevent nine HPV genotypes, including HPV6/11/16/18/31/33/45/52/58 viruses.

As the largest vaccine against prevention, the nine-valent vaccine is almost a shot, and the only one that supplies nine-valent vaccines in the world is Merck, and there are about 3.6 billion women in the world, which can only be in short supply.

Whether the "vaccine myth" can be continued

As the only exclusive agent enterprise in China that owns Merck Quadrivalent HPV Vaccine and Nine Valent HPV Vaccine, According to the data of the past three years, nearly 90% of the company's operating income comes from agent vaccines.

However, in the 2021 interim report, the proportion of income contributed by Zhifei Biological Agent products fell to 54.03%, while the proportion of revenue from independent products began to rise, reaching 6.037 billion yuan, accounting for 45.84%.

Perhaps because the vaccine agency contract is about to expire, Zhifei Bio must find new profit growth points. It is reported that the company's vaccine cooperation with Merck will expire at the end of June 2023, and if it cannot be renewed, it may affect half of the company's revenue.

In March this year, the recombinant novel coronavirus protein vaccine (referred to as the "recombinant new coronavirus protein vaccine") developed by Zhifei Bio's wholly-owned subsidiary Zhifei Longkema in cooperation with the Institute of Microbiology of the Chinese Academy of Sciences was approved for conditional listing.

The vaccine also got the platform of Academician Zhong Nanshan, who previously said in public on April 8 that the third injection he received was Zhifei's recombinant protein new crown vaccine.

But this still can't change the "agent + autonomy" business model that Zhifei Biology has always had. Looking back at the development process of Zhifei Biology, according to its official website information, the company was founded in 1995 and landed on the A-share market in 2010, and the company is mainly engaged in the research and development, production and sales of vaccines and biological products. In the early days of its establishment, the company mainly focused on agency business, and since then, through independent research and development, it has gradually established its own product system, that is, "agent + autonomy".

As far as the R&D investment of Zhifei Bio is concerned, compared with the R&D expense rate of the industry, the company's R& D investment has always been within 3%. But in fact, 54% of Zhifei's revenue comes from agent vaccines, and the manufacturer of agent vaccines is Merck (USA), which itself has little to do with Zhifei.

Therefore, excluding the income of agent products, the R&D expense rate of Zhifei is up to the industry standard, but with the significant increase in the revenue of independent products, its expense rate will decline again in 2021.

Some investors also pointed out that although the short-term market reaction is too strong, the latest statement of the World Health Organization has also brought some uncertainty to HPV vaccination. If there are major changes in the number of HPV vaccinations in the future, the related business will be greatly impacted for Zhifei Bio and other HPV vaccine sales companies.

How long will it take to get universally vaccinated

IN THE ARTICLE, WHO also proposes that by 2030, the coverage rate of HPV vaccine for girls aged 9 to 14 years will reach more than 90%, the coverage rate of adult women aged 35 to 45 with effective cervical cancer screening should reach more than 70%, and at least 90% of women with lesions after screening need to be treated and managed appropriately.

However, it should be noted that only 13% of the population completed the 2 doses of HPV vaccine globally in 2020.

In the mainland, after the cooperation between Zhifei Bio and Merck, only a few million quadrivalent and nine-valent vaccines imported into Chinese mainland are imported every year, and HPV nine-valent vaccines and quadrivalent vaccines are still in short supply.

According to the data, merck's quadrivalent HPV vaccine was issued 7.2194 million in 2020; the batch issuance volume of the nine-valent HPV vaccine was 5.066 million, which shows that the current hpvage vaccine gap in mainland China is still large, and "one dose is difficult to find" is the norm.

In March this year, Watson Bio ended its 17-year long-distance run, and the second HPV vaccine in China was approved. Its subsidiary Yuxi Zerun independently developed and produced a bivalent human papillomavirus vaccine (HPV2 vaccine), Wo Zehui, which was approved for marketing by the State Drug Administration. This is the second bivalent HPV vaccine approved in China, and Yuxi Zerun is also the fourth enterprise in the world to obtain a marketing license for cervical cancer vaccines.

On April 14, Wantai Bio said in the announcement that the company provides more products to the society to meet the market supply by increasing production capacity, and has reached a capacity of 30 million bottles / year in 2021, and actively supply the market to allow more women of the right age to prevent cervical cancer through vaccination.

Reporter Hu Xinyu

Edited by Wang Liying

Editor-in-Charge Sun Xiao