The nine-valent vaccine has not yet been marketed, and the bivalent vaccine has stalled significantly, and Wantai Bio has been greatly affected
"China Science and Technology Investment", Zhang Ting, He Ziyan
A few days ago, Wantai Biotechnology (603392. SH) has published its 2023 Annual Report. During the reporting period, Wantai Biotech achieved operating income of 5.511 billion yuan, a year-on-year decrease of 50.73%, and net profit of 1.248 billion yuan, a year-on-year decrease of 73.65%, and the net profit of revenue decreased significantly.
Regarding the decline in performance, Wantai Bio explained in the report that due to the company's bivalent cervical cancer vaccine (hereinafter referred to as "bivalent HPV vaccine") affected by factors such as the age expansion of the nine-valent cervical cancer vaccine (hereinafter referred to as the "nine-valent HPV vaccine"), market competition and other factors, the sales were less than expected and the demand for new crown pneumonia testing market at home and abroad in 2023 decreased, resulting in a significant decline in vitro diagnostic business and raw material-related revenue.
In March this year, Wantai Biotech won the bid for the procurement project of 499,200 bivalent HPV vaccines of the Jiangsu government at a price of 86 yuan/piece. With the price of bivalent HPV vaccine falling all the way, Wantai Bio's vaccine revenue in 2023 will also shrink by 4.533 billion yuan. The nine-valent HPV vaccine, which is regarded as a new growth point of Wantai Biotech, is also facing fierce competition in the industry.
Both major businesses have stalled sharply
Wantai Bio's business is mainly based on vaccines and in vitro diagnostics, of which the vaccines that have been marketed and sold mainly include hepatitis E vaccine, bivalent HPV vaccine, etc., and the in vitro diagnostic business includes in vitro diagnostic reagents, in vitro diagnostic instruments, etc.
Wantai Bio's net profit in 2023 will drop by 70%, on the one hand, the company's overall profit has declined due to the impairment of assets such as special raw materials and finished products related to the new crown vaccine, special equipment for production, etc., due to the reduction of the current market demand for nucleic acid and antigen testing, there is an inventory backlog or even scrapping of special raw materials and finished products related to the new crown vaccine, and the special equipment is also idle, resulting in unsatisfactory business income. In 2023, Wantai Bio's operating income in vitro diagnostics will be 1.533 billion yuan, a year-on-year decrease of 42.66%. From 2020 to 2022, the revenue of Wantai Bio's in vitro diagnostic products will be 1.472 billion yuan, 2.339 billion yuan, and 2.674 billion yuan respectively. During the new crown epidemic, that is, from 2021 to 2022, Wantai Bio's in vitro diagnostic business is undoubtedly the new revenue focus of Wantai Biotech.
On the other hand, Wantai Bio's main source of revenue, the vaccine business, has halved. In 2023, Wantai Biotech's vaccine revenue will be 3.96 billion yuan, a year-on-year decrease of 53.37%. At present, Wantai Biotech has three vaccines circulating in the market, namely bivalent HPV vaccine, hepatitis E vaccine and nasal spray new crown vaccine.
As the core business of Wantai Bio's vaccine business, the market competitiveness of the bivalent HPV vaccine vaccine "Xinkuning" is far less than before. Wantai Biotech's "Xinkuning" is the first domestic bivalent HPV vaccine approved for marketing in China. In May 2020, "Xinkonin" was launched at a price of 329 yuan per piece, breaking the monopoly of GlaxoSmithKline (GSK) on bivalent HPV vaccine in the domestic market, and once dominated the bivalent HPV vaccine market. The good times did not last long, in March 2022, Walvax Biotech (300142. SZ) independently developed the bivalent HPV vaccine "Wozehui" after the launch, Wantai Bio's dominant market pattern in the domestic bivalent HPV vaccine was broken.
In May 2022, Walvax Biotech and Wantai Biotech's bivalent HPV vaccine jointly won the bid for the procurement project of 32,000 HPV vaccines procured by the Nanjing government, but Walvax Biotech won the bid at a low price of 246 yuan/piece to win the purchase volume of 22,400 units, and Wantai Biotech only won the bid for 9,600 units. In September 2022, Walvax Biotech "squeezed out" Wantai Biotech with a low price of 245 yuan/piece, and obtained the exclusive procurement opportunity of HPV vaccine procurement from the Fujian Provincial Government.
In 2022, Wantai Bio's vaccine business will still be able to achieve a high revenue of 8.493 billion, accounting for 75.93% of the total revenue. In 2023, Wantai Biotech's bivalent HPV vaccine will not only face Walvax Biotech's market share grabbing, but also be affected by the age expansion of Merck's nine-valent cervical vaccine, and its bivalent HPV vaccine market will further shrink. As a result, the price war for bivalent HPV vaccine began. In July 2023, in the announcement of the results of the 2023 human papillomavirus (HPV) vaccine procurement project for school-age girls in Guangdong Province published on the official website of the Guangdong Provincial Government Procurement Center, Wantai Biotech successfully won the bid at a low price of 116 yuan/piece, a decrease of nearly 65%. This time, Walvax Biotech's "Yuxi Zerun" was defeated with a price of 146 yuan for a single dose.
In March this year, according to the information released by the Jiangsu Provincial Government Procurement Network, Wantai Biotech won the bid for 499,200 pieces at a price of 86 yuan per piece, setting a new low for the purchase price of domestic bivalent HPV vaccine. In less than a year, the price of Wantai Bio's bivalent HPV vaccine has shrunk by 25.9%, and the vaccine revenue in 2023 has also shrunk by 4.533 billion yuan.
In addition, Wantai Biotech also seeks a breakthrough in bivalent HPV vaccine through "going overseas", but the current results are not obvious. In 2023, Wantai Biotech's overseas revenue will be 151 million yuan, a year-on-year decrease of 66.06%.
The nine-price market is full of challenges
The bivalent HPV vaccine is under pressure, and the nine-valent HPV vaccine is regarded as a new growth point for Wantai Biotech.
According to the annual report, the on-site work of the V8 phase V8 visit of the phase III main clinical trial of Wantai Biotech's 9-valent HPV vaccine has been completed, and specimen testing is underway. In January this year, Wantai Biotech said on the investor interactive platform that the company's nine-valent HPV vaccine production line will build six dope production lines in two phases, with a design capacity of 60 million pieces/year, and has completed the construction of two dope production lines in the first phase. Although Wantai Biotech did not disclose the time of listing, some industry insiders speculated that its nine-valent vaccine may be expected to be launched in the second half of this year.
In fact, even if Wantai Bio's nine-valent vaccine can be successfully launched in the second half of this year, the market challenges it faces are still severe. On January 9 this year, Merck announced that its nine-valent HPV vaccine for women aged 9-14 years has been approved for the second dose of the program, and the unit price has not been adjusted. In other words, Merck & Co., Ltd. has launched a two-dose 9-valent vaccine, which has reduced the overall cost of vaccination, including time and money, and has a first-mover advantage in the market. In March this year, Merck announced plans to conduct a clinical trial of a single-dose regimen of the 9-valent HPV vaccine to evaluate the protective efficacy and safety of the single-dose regimen compared to the approved three-dose regimen. The nine-valent HPV competitive market that Wantai Biotech will face in the future may not be easy.
Looking at the current situation of HPV nine-valent vaccine in China, Walvax Biologics, Kangle Guardian (833575. NQ), Bowei Biotech, Ruike Biotech (02179. HK) is also in phase III clinical trials, and the market is expected to usher in domestic 9-valent HPV vaccines this year and next. A few days ago, Kangle Guardian revealed in an interview with the media that the phase III clinical trial of its nine-valent HPV vaccine (female indication) has also entered the case monitoring stage and is undergoing a 30-36 month visit. If the clinical trial progresses well, it is expected that the BLA (Biologics License Application) for the 9-valent HPV vaccine will be submitted in 2025.
In addition to the layout of the nine-valent HPV vaccine (female indication), Kangle Guardian said in an institutional survey in December 2023 that "the company's nine-valent HPV vaccine (male indication) will start phase III clinical trial in December 2022, and the enrollment of 9,000 subjects has been completed, and the BLA application for the nine-valent HPV vaccine (male indication) is expected to be submitted in 2027." Some investors asked Wantai Biotech in the interactive platform whether its 9-valent HPV vaccine is suitable for men, and Wantai Biotech did not give a positive answer.
Secondly, Recbio disclosed in the 2023 interim report that the company's recombinant nine-valent HPV vaccine REC603 has entered phase III clinical trial, and it is expected to submit a BLA application in 2025. Recbio also announced the plan of recombinant 9-valent HPV vaccine to "go overseas". On January 23, Recbio announced on its official WeChat public account that the company has signed a framework agreement with SPIMACO, a Saudi Arabian pharmaceutical company, on the recombinant 9-valent HPV vaccine REC603 and reached an authorization and strategic cooperation. Recbio will exclusively license SPIMACO to develop, register and commercialize the recombinant 9-valent HPV vaccine REC603 in 15 Middle East and North Africa countries, including Saudi Arabia.
The dividends of the bivalent HPV vaccine have disappeared and the nine-valent HPV vaccine is still to be marketed, and many investors have expressed concerns about the performance of Wantai Biotech. In December 2023, Wantai Biotech disclosed the latest developments of the company's nine-valent HPV vaccine on the investor interactive platform. In 2021, Wantai Bio's share price once rushed to 344.7 yuan / share, and the closing price was 337.5 yuan / share, with a total market value of nearly 180 billion yuan. As of April 3, the closing price of Wantai Biotech was 62.48 yuan per share, with a total market value of 81.52 billion yuan, and the market value has shrunk by nearly 100 billion yuan.
The reporter sent a letter to Wantai Biotech on issues such as performance and HPV vaccine, but as of now, no reply has been received.