HPV vaccine "three shots to one shot", the vaccine industry is going to change the day?
According to media reports, at the recent meeting of the Strategic Expert Group on Immunization held by the World Health Organization, the Immunization Strategy experts of the World Health Organization believed that "a single dose of HPV vaccination can be effective in preventing cervical cancer caused by persistent HPV infection, and the effect of two or three doses is comparable."
In other words, the HPV vaccine, which previously required three injections to take effect, may now be sufficient with just one injection.
Affected by this news, on April 14, a number of listed vaccine companies fell sharply, of which the "vaccine brother" Zhifei Biological stock price fell the most, fell by 18.66% in the morning, although the stock price in the late session has rebounded, but the decline still reached 14.19%, ranking second in the list of market declines, and the market value also evaporated by more than 30 billion in just one day.
From the financial report, a large part of the revenue of Zhifei Bio in the past two years has come from HPV vaccine consignment sales. If it is really as the experts say, "three needles become one needle", how much will Zhifei Bio be affected? Will the "vaccine brother" walk off the altar because of this?
"Vaccine Brother" encountered a black swan
About this black swan, we must start from an academic article not long ago.
According to media reports, on April 11 of this year, researchers from the WHO group, the University of Washington School of Medicine, and Harvard Medical School published a research paper online in the journal "NEJM Evidence" entitled "Efficacy of Single-Dose Human Papillomavirus Vaccination among Young African Women."
The research article argues that a single dose of HPV vaccine can provide as much cervical cancer protection as the standard three-dose regimen, and is comparable to the two- or three-dose regimen, which directly led to a big dive in the stock price of Zhifei Bio on April 14.
As the exclusive domestic agent of Merck quadrivalent HPV vaccine and nine-valent HPV vaccine, if it is really as the research paper says that only one injection can achieve the effect, Zhifei Bio will be greatly affected.
According to the financial report data, after obtaining the agency right of HPV vaccine in 2017 and 2018, the proportion of revenue of Zhifei Biological Agent products in revenue has been rising. In terms of specific data, from 2018 to 2020, the proportion of zhifei biological agency product revenue to total revenue was 74.37%, 86.79% and 91.87%, respectively, exceeding the proportion of independent product revenue for three consecutive years.
Of course, before that, with the help of agent vaccines, Zhifei Bio can be said to have made a lot of money.
According to the financial report data, from 2018 to 2020, the revenue and net profit of Zhifei Bio are growing steadily. In 2017, Zhifei Bio's revenue was only 1.343 billion yuan and net profit was 432.3 million; but in 2018, revenue climbed to 5.228 billion, and net profit increased to 1.451 billion; subsequently, in 2019 and 2020, Zhifei Bio achieved revenue of 10.59 billion and 15.19 billion, respectively, and achieved net profits of 2.388 billion and 3.323 billion, and revenue and net profit continued to grow significantly.
According to the latest financial forecast data, in the first quarter of 2022, Zhifei Bio expects to achieve a net profit attributable to about 1.783 billion yuan to 1.97 billion yuan, up 90.00% to 110.00% year-on-year; to achieve a non-net profit of about 1.791 billion yuan to 1.979 billion yuan, up 90.00% to 110.00% year-on-year, and the revenue continues to grow significantly.
If there is no news of "three needles to one needle", the prospects of Zhifei Biology can be said to be optimistic, and the revenue and net profit will continue to grow steadily; but if it is really as experts say, only one needle can achieve the effect, then the revenue and net profit of Zhifei Biology are likely to be "discounted", from this point of view, the prospects of Zhifei Biology are full of uncertainty.
The legendary history behind the Zhifei creature
Although the road ahead is full of uncertainty, it is undeniable that Zhifei Bio is also a legendary company.
The founder of Zhifei Bio, named Jiang Rensheng, was born in 1953 to a poor family in Guanyang, Guangxi. In that era, the college entrance examination had not yet been restored, and high school graduation was already the highest academic qualification, and after finishing high school, Jiang Rensheng naturally became a local primary school teacher, bishop of Chinese and mathematics.
Perhaps for many people at that time, after finishing high school, it was already very remarkable, but Jiang Rensheng was not satisfied and kept learning. Until the resumption of the college entrance examination in 1977, Jiang Rensheng seized this opportunity, was admitted to Guilin Medical College, and after graduation, he was assigned back to work at the health and epidemic prevention station, became a staff member of the epidemic prevention station, and worked for more than 20 years.
In 1999, Jiang Rensheng, who was 46 years old and became the station manager of the epidemic prevention station, decided to go to the sea to start a business, and the direction he chose was the vaccine industry that he had been engaged in before. In 2002, Jiang Rensheng and several colleagues spent 500,000 yuan to buy the loss-making Chongqing Jinxin Biological Products Company and began to formally start a business, which is the predecessor of Zhifei Biology.
Due to the lack of funds, Jiang Rensheng found that he did not have the ability to develop vaccines after buying the factory, so he had to choose the direction of vaccine sales. However, because of the previous more than 20 years of work experience in epidemic prevention stations as a support, Jiang Rensheng is very sensitive to the needs and prospects of each vaccine.
For example, in 2002, the A+C meningitis vaccine of the Lanzhou Institute of Biological Products was not optimistic at the time, but it was not expected that with the outbreak of the C group cerebral epidemic in 2005, the demand for A+C meningitis vaccine increased greatly, and Jiang Rensheng and Zhifei Bio also successfully earned the first pot of gold and became famous.
With the success of the OEM vaccine, Jiang Rensheng and Zhifei Bio acquired two companies, Beijing Luzhu Biopharmaceutical and Anhui Longkema, respectively, in 2008, and successfully landed on the Science and Technology Innovation Board in 2010.
However, after landing on the GEM, Zhifei Biology did not go further, although it went all out to engage in research and development, but the performance of Zhifei Biology stagnated, especially after the outbreak of the vaccine incident that shocked the whole country in 2016, because the state cut down the middleman and let the vaccine manufacturers directly supply medical institutions, Zhifei Biology directly fell to the bottom.
However, the so-called "misfortune and blessing depend on, and blessing and misfortune lie down." Although domestic vaccines are no longer allowed to have middlemen, foreign vaccines must be sold through agents, and it is precisely because of this that Zhifei Bio has obtained the exclusive agency rights of the US pharmaceutical giant Merck and began to represent HPV vaccines.
With the help of the rising demand for HPV vaccines, Zhifei Bio has come out of the quagmire and its performance has increased significantly. On May 17, 2021, the stock price hit the highest point of 230.69 yuan, and the market value was as high as 369.1 billion, and Jiang Rensheng also became a billionaire.
The prospect of Zhifei Bio
In fact, even without the black swan this time, the wisdom flying creature is not without risks.
Although the "lying profit" has been achieved by virtue of the agent HPV vaccine, on the other hand, the research and development capabilities and self-developed products of Zhifei Biology have lagged far behind the development speed of the company itself.
According to the financial report data, as of the third quarter of 2021, the total operating cost of Zhifei Bio was 11.8 billion, of which the research and development expenses were only 240.3 million, and the proportion of research and development expenses was only a pitiful 2%; and the sales expenses were 1.225 billion, accounting for 10.38%, which was nearly 6 times the research and development expenses. Obviously, at present, Zhifei Bio has a clear trend of "light research and development, heavy marketing".
From the perspective of products, as of December 31, 2020, the revenue of Zhifei Bio's agent product - non-immunization program vaccine was 13.96 billion, the revenue of non-immunization program vaccine was 1.198 billion, the proportion of agent products to revenue reached 91.87%, and the proportion of non-agent products to revenue was only 7.89%.
As a pharmaceutical and biological company, research and development capabilities and product capabilities should have been the basis of the company's survival, agent products should be the icing on the cake, and Zhifei Biology is now obviously "putting the cart before the horse", and because of this, when the HPV vaccine appears black swan, investors will have such a big reaction to Zhifei Biologics.
Of course, at present, "three injections to one injection" is only a point of view, and the domestic HPV vaccine also needs three injections, in other words, the days of Zhifei Bio 'lying and earning" with the help of HPV vaccine will continue.
However, although the "three needles into one needle" has not been implemented, but this also sounded the alarm for Zhifei Biology, if the company itself does not have a strong research and development capabilities, when the external situation is faced with unexpected situations, it will often only fall into a passive situation, and if Zhifei Biology does not pay attention to research and development, although in the short term life will be very easy, but the future road will only become narrower and narrower.