Source of this article: Times Finance Author: Li Aohua
Image source: Tuworm Creative
According to the mainland's Vaccine Administration Law, mainland vaccines can be divided into immunization program vaccines and non-immunization program vaccines, the former refers to vaccines that are included in the national immunization program and provided to citizens free of charge, known as "first-class vaccines"; The latter are vaccines that have not yet been included in the national immunization program and need to be vaccinated at their own expense, that is, "type two vaccines".
State-owned enterprises are the main suppliers of immunization programme vaccines, while private enterprises focus on non-immunization programme vaccines. Among all non-immunization program vaccines, HPV (human papillomavirus) vaccine is a well-deserved "top-notch" product. At present, there are only 3 Chinese vaccine companies in China that have HPV vaccine supply capacity, namely Wantai Biotech (603392. SH), Watson Bio (300142. SZ) and Zhifei Biology (300122.SZ).
Although the number of approved products is not large, the current HPV vaccine market has long been a red ocean. As the disclosure of the 2023 half-year report comes to an end, the cruel "fight" of the HPV vaccine has also surfaced through financial report data.
The two-price "price war" is upgraded
In December 2019, the bivalent HPV vaccine (trade name: Cinchonin) developed by Wantai Biotech was approved for marketing by the State Food and Drug Administration and officially commercialized in May 2020, becoming the third HPV vaccine manufacturer in the world after GlaxoSmithKline (GSK) and Merck, breaking the monopoly of foreign companies in the HPV vaccine market.
The listing of Cinchonin has promoted the rapid growth of Wantai Biologics' performance and has become the strongest growth engine of Wantai Biologics. According to the financial report data, from 2020 to 2022, Wantai Biotech achieved revenue of 2.354 billion yuan, 5.750 billion yuan and 11.185 billion yuan, respectively, and achieved net profits of 677 million yuan, 2.021 billion yuan and 4.736 billion yuan, respectively. Cinchonin is the core product of Wantai Biologics' vaccine segment. From 2020 to 2022, the revenue of Wantai Biologics' vaccine business was 865 million yuan, 3.363 billion yuan and 8.492 billion yuan, respectively.
But just 3 years later, the performance growth engine of Wantai Biotech "failed". According to the latest disclosed financial report, in the first half of 2023, Wantai Biotech achieved revenue of 4.164 billion yuan, a year-on-year decrease of 29.78%; The net profit was 1.702 billion yuan, down 36.78% from the same period last year. Wantai Biotech admitted that the sales revenue of Cinchonin and new crown-related products declined, resulting in a decline in overall net profit.
Judging from the batch issuance data, Cinchonin is still in the climbing period. Southwest Securities Research Report pointed out that in the first half of this year, Xinkening was issued 224 batches, a year-on-year increase of 52%. This means that sales are not the reason for the decline in Wantai HPV vaccine sales revenue.
At the beginning of the listing, GSK was the only competitor of Wantai Biotech in the bivalent HPV vaccine market. GSK's bivalent HPV vaccine full vaccination cost of 1740 yuan, while the initial market price of Cinchonin is 329 yuan / stick, 9-14 years old women only need to receive 2 shots, 15-45 years old women 3 shots, based on this calculation, the cost of Cinchonin 9-14 years old vaccinated is 658 yuan, 15-45 years old vaccinated 987 yuan, compared with GSK has a significant price advantage.
But as Watson Biologics joins the fray, the competition for bivalent HPV vaccines has suddenly added new variables.
In March 2022, Watson Biotech's bivalent HPV vaccine (trade name: Wozehui) was approved for marketing, and the immunization procedure of Wozehui is similar to that of Xinconin, and the initial pricing of the two specifications is 319 yuan / unit and 329 yuan / tube, respectively.
Watson Bio fired the first shot at the price reduction. In May 2022, Watson Biotech and Wantai Biotech jointly won the bid for the bivalent HPV vaccine government procurement project in Jiangsu Province, and the two sides met for the first time, and Watson Biotech won more procurement at a low price. The purchase quantity of the project is 32,000 units, of which Watson Biotech won the bid at a price of 246 yuan / unit, and the purchase volume was 22,400 units, while Wantai Biotechnology, which still insists on the price of 329 yuan / unit, only won the bid for 09,600 units.
In September of the same year, Watson Biotech won another large order worth 142 million yuan for the HPV vaccine procurement project of the Fujian Provincial Center for Disease Control and Prevention. The procurement information shows that the purchase volume of the project is 580,000 units, and the winning bid price of Watson Biotech this time is about 245 yuan per unit.
Entering 2023, the price war of bivalent HPV vaccines has escalated again. According to the "Guangdong Province 2023 Admission Age Girls Human Papillomavirus (HPV) Vaccine Procurement Project Results Announcement" disclosed by the Chinese government procurement network in July this year, Wantai Biotech successfully won the bid, the winning unit price was 116 yuan / unit, and Watson Bio ranked second in this bidding with a quotation of 146.00 yuan / unit. Compared to the initial pricing, the quotations of Wantai Biotech and Watson Biotech decreased by about 64% and 55%, respectively.
Watson Biotech said that in the first half of this year, the company's bivalent HPV vaccine won a total of 1.686 million government procurement projects. Wantai Biotech said that in the first half of this year, the company's sales of bivalent HPV vaccines exceeded 10 million.
Under the price battle, the high growth of Cinchonin's sales revenue came to an abrupt end, and Wozehui's pulling effect on the performance of Watson Biotech was also limited.
According to the announcement, in the first half of this year, Watson Biotech obtained 4.1439 million doses of bivalent HPV vaccine batch issuance, an increase of 368.42% over the same period last year. In this case, Watson Bio's revenue still decreased by 7.68% year-on-year to 2.167 billion yuan, while net profit increased by 8.13% year-on-year to 455 million yuan. For the decline in revenue, Watson explained that this was due to the decrease in vaccine export sales.
Nine-price increase, Zhifei Biology "exclusive"
Unlike Wantai Biotech and Watson Biotechnology, which are busy with "price wars", Zhifei Biologics, which exclusively enjoys the nine-valent HPV vaccine market, is much more calm. Financial report data shows that in the first half of this year, Zhifei Biology achieved revenue of 24.445 billion yuan, a year-on-year increase of 33.19%; The net profit was 4.260 billion yuan, a year-on-year increase of 14.24%.
There are more than 200 subtypes of the HPV virus, which are divided into high-risk and low-risk types. The higher the "valence" of the HPV vaccine, the more virus subtypes are targeted, which also means wider prevention coverage. In 2018, Merck's nine-valent HPV vaccine (trade name: Jiadaxiu 9) was approved by the State Food and Drug Administration, and Zhifei Biotech was its sole agent in China. As the highest-priced HPV vaccine at present, the nine-valent HPV vaccine has always been the first choice for many vaccinated people, but due to the limited supply and vaccination age restrictions, the nine-valent HPV vaccine has long been "difficult to find".
In fact, Merck is increasing the supply of nine-valent HPV vaccine every year. According to the financial report of Zhifei Biotechnology, in 2022, the annual batch issuance of nine-valent HPV vaccines will reach 15,477,232 units, a year-on-year increase of 51.65%; From January to June 2023, the batch issuance of nine-valent HPV vaccines reached 14,678,200, a year-on-year increase of 57.85%.
On August 30, 2022, Merck announced that a new indication for its nine-valent HPV vaccine has been approved by the State Food and Drug Administration. The approval marks the expansion of the applicable population of Merck's nine-valent HPV vaccine from women aged 16-26 to women aged 9-45.
The continuous increase in supply and the relaxation of vaccination age restrictions have alleviated the shortage of nine-valent HPV vaccine.
Recently, a number of intermediaries, vaccination clinic staff and vaccinators who provide nine-valent HPV vaccine appointment services told Times Finance that since the beginning of this year, the difficulty of appointment for nine-valent HPV vaccine has decreased significantly.
Times Finance learned from scalpers that this year's nine-valent HPV vaccine generally waits 7-15 days to arrange vaccination, and when the vaccine is in short supply, many appointments need to wait for more than half a year. However, due to the fact that scalpers also need to charge a service fee of 900~1500 yuan while making an appointment, with the decline in the difficulty of appointment for the nine-valent HPV vaccine, many vaccinated people choose to make their own appointments.
Vaccinated person Madoka (pseudonym) told Times Finance: "This year, the difficulty of booking the nine-valent HPV vaccine is much lower. I have now received the second dose, and both times I grabbed it with a swipe in the official mini program (Guangzhou vaccination) a day in advance. Especially the vaccination clinic in Zengcheng District, which is a little further away, is easy to make an appointment successfully. ”
A staff member of a vaccination clinic in Zengcheng District, Guangzhou, also told Times Finance that this year's nine-valent HPV vaccine arrival has indeed increased compared with previous years, and it is not difficult to grab numbers. The appointment information page of the vaccination clinic shows that a batch of number sources were released at 5 p.m. on August 29, but the number sources were still sufficient until August 30.
Domestic pharmaceutical companies battle nine prices
GSK's bivalent HPV vaccine is the first HPV vaccine in human history, but under the offensive of Merck's quadrivalent and nine-valent HPV vaccines, GSK's bivalent HPV vaccine has become "the front wave of being photographed on the beach". In 2016, GSK's bivalent HPV vaccine was withdrawn from the U.S. market. In the Chinese market, Southwest Securities Research Report shows that in the first half of this year, the number of batches issued by GSK bivalent vaccine was only 5 batches.
At the same time, Merck has made rapid progress with two HPV vaccines, especially the nine-valent HPV vaccine. In the first half of 2023, Merck's revenue in China was approximately US$3.58 billion, a year-on-year increase of more than 45%, surpassing AstraZeneca, which has been in place for many years, and becoming the largest multinational pharmaceutical company in China. According to financial report data, the global sales revenue of quadrivalent and nine-valent HPV vaccines reached 4.43 billion US dollars, a year-on-year increase of 41%. Merck also admitted that this is due to strong global demand, especially in China.
The Prospective Industry Research Institute believes that the per capita HPV vaccination cost is expected to be reduced to less than 1,000 yuan in the future. The Global Strategy for Accelerating the Elimination of Cervical Cancer proposes that by 2030, 90% of girls will complete HPV vaccination before the age of 15, and the current per capita vaccination price of nine-valent HPV vaccine suitable for this age range is about 4,000 yuan, combined with the number of domestic newborns born in the past 10 years, the new demand in the next 10 years will also reach about 80 million. According to the per capita vaccination cost of 1,000 yuan, the market size is about 80 billion yuan.
Under the lure of huge market potential, pharmaceutical companies have begun to compete for domestic nine-valent HPV vaccines.
According to Times Finance statistics, at present, Wantai Biotechnology, Rico Biotechnology, Watson Biotechnology, Recreation Guard (833575. BJ) and Shanghai Bowei's nine-valent HPV vaccine have entered the phase 3 clinical stage. Vaccine expert Tao Lina once pointed out to Times Finance that it still takes at least 2~3 years for the domestic nine-valent HPV vaccine to be approved.
In the field of HPV vaccines, high price is a "winning weapon", the higher the price of the vaccine, the more virus subtypes can be prevented. Although the first domestic nine-valent HPV vaccine has not yet been approved, many companies have already laid out higher price HPV vaccines. For example, China Biotech's 11-valent HPV vaccine is already in clinical phase 3, and Shenzhou Cell (688520. SH) 14-valent HPV vaccine has entered phase 3 clinical trials, and Chengda Biotech (688739. SH) and Connaught Guard's 15-valent HPV vaccine has also entered the clinical stage.
In July this year, the Center for Drug Evaluation (CDE) of the State Food and Drug Administration issued the "Technical Guidelines for Clinical Trials of Human Papillomavirus Vaccines (Trial)", which clearly pointed out that if the previous generation of vaccines complete the protective efficacy test using recognized histopathological endpoints, the protective efficacy of the previous generation vaccine is evaluated to meet the marketing requirements, and the test vaccine is indeed an iterative vaccine after pharmaceutical evaluation, it can be accepted to apply for marketing with a virological endpoint of 12 months PI (PI12) to shorten the approval time of the iterative vaccine.
The issuance of the "Guiding Principles" is expected to promote the accelerated marketing of domestic nine-valent HPV vaccines.