Produced by | Bullet Finance
Author | Wang Yajing
Edit | Egg total
American Editor | Li Yufei
Audit | Ode
Clover's vaccine development has finally taken a step forward.
Clover recently announced that the first cohort of young adults in the Phase I clinical trial of its bivalent RSV PreF-trimer subunit vaccine candidate SCB-1019 has received positive preliminary immunogenicity and safety data.
For Clover, which has very few commercially available products, the advancement of any product is critical. From an objective point of view, Clover's current most important need is commercial products, after all, there is not enough product support, and the company's performance has been quite sluggish.
Just before revealing the progress of this vaccine, Clover had just released its 2023 financial results.
During the reporting period, the company achieved revenue of 39.255 million yuan, net profit loss of 139 million yuan, and adjusted net profit loss of 85.024 million yuan.
(Photo / Clover Biotech Financial Report)
In fact, Clover creatures have had their peaks. Before the IPO, it was favored by a number of institutions such as Hillhouse and Temasek, and since its listing on the Hong Kong Stock Exchange in November 2021, its market value once exceeded HK$16 billion.
But I didn't expect that the new crown vaccine "difficult birth", which it focused on, would not be commercialized until February 2023, when the epidemic control has been fully relaxed. Clover, which missed the opportunity, accelerated its dive in the capital market and has now become a member of the "penny stocks".
As of the close of trading on April 12, Clover's share price was only HK$0.365 per share, with a total market value of less than HK$500 million.
1. After betting on the failure of the new crown vaccine, he bet on RSV
In January 2023, Clover released a list of strategic priorities for 2023.
In addition to its continued decision to commercialize COVID-19 vaccines, Clover has identified two directions: first, to build a leading portfolio of respiratory vaccines, and second, to establish a position in the pediatric vaccine market.
Among them, respiratory vaccines give preference to respiratory syncytial virus (RSV) and seasonal influenza. In February 2023, the company signed an exclusive agreement with Guoguang Biotech to distribute AdimFlu-S (QIS) in Chinese mainland (editor's note: this is a quadrivalent seasonal influenza vaccine), which was launched in Chinese mainland in September of that year.
After more than one year, another key RSV vaccine has finally made new progress.
On April 8, Clover announced that in the Phase I clinical trial of its bivalent respiratory syncytial virus (RSV) vaccine SCB-1019, the first cohort of young adults received positive preliminary immunogenicity and safety data.
Clover said that preliminary immunogenicity data for its in-house RSV vaccine SCB-1019 against neutralizing antibodies to RSV-A and RSV-B are comparable or superior compared to other bivalent RSV vaccines, and these positive immunogenicity data further support its strategy for the development of a bivalent RSV vaccine.
In its 2023 financial report, Clover said that it would prioritize respiratory vaccine products, and the company decided to suspend several projects, including SCB-808, to allocate more resources mainly for the research and development of respiratory vaccine product pipelines.
This shows that Clover attaches great importance to this RSV vaccine.
This is very similar to the decision Clover made when it gambled on its COVID-19 vaccine SCB-2019 (CpG1018/alum).
Since its IPO in Hong Kong in 2021, Clover's fate has been closely tied to the new crown vaccine. Since then, companies have also cut multiple pipelines and prioritized resources for COVID-related products.
With the new crown vaccine, Clover once became the "darling" of capital. According to its official website, the company was listed on the Hong Kong Stock Exchange and raised US$258 million in financing from a number of investment institutions, including Hillhouse, Temasek, RockSprings Capital and OrbiMed.
However, Clover has not been able to take advantage of the situation, and the highly-anticipated COVID vaccine will not be commercialized until February 2023, when most of the world has relaxed epidemic restrictions.
(Photo / Clover Biotech Financial Report)
It can only be said that "the plan can't catch up with the changes", and this new crown vaccine missed the development opportunity and finally ended up lonely.
2. Layoffs of 50%, behind the average annual salary of millions per capita
Clover, which missed the opportunity, has still had a bad year of performance.
According to the financial report, in 2023, Clover will achieve revenue of 39.255 million yuan, which is an improvement compared with 0 revenue in 2022.
(Photo / Clover Biotech Financial Report)
It's just that these revenues are really difficult to support the profit margins of enterprises. During the reporting period, Clover's net profit was still in the red, with a loss of 139 million yuan and an adjusted net profit loss of 85.024 million yuan.
Under the high loss, Clover urgently needs to reduce costs and increase efficiency, and one of these knives "cuts" employees.
According to the financial report, as of December 31, 2023, the number of employees of the company was 387, a decrease of 49% from 764 at the end of 2022. In other words, in 2023, basically one out of every two people will leave the company.
(Photo / Clover Biotech Financial Report)
For this, Clover has also paid a great price. In 2023, Clover's other expenses increased by 205% year-on-year to RMB1,812 million, of which RMB1,697 million was for inventory provisions, while one of the remaining expenses was severance compensation costs.
(Photo / Clover Biotech Financial Report)
Judging from the data, the salary expenditure of enterprises in 2023 is indeed falling sharply. In 2023, Clover's total compensation costs were $390 million, down 40% from $655 million in 2022.
(Photo / Clover Biotech Financial Report)
However, the average salary of enterprises has increased instead of falling. If calculated based on the above data, in 2023, Clover's per capita annual salary will be as high as 1,008,500 yuan, an increase of about 150,000 yuan from 857,200 yuan in 2022.
"Jiemian News Bullet Finance" also noticed that Clover's 2023 financial report did not disclose executive compensation, but before 2022, the salaries of Liang Peng (founder of Clover) and Liang Guo and his son have risen all the way to the level of 10 million.
Wind data shows that from 2020 to 2022, Liang Peng's salary will be 3.247 million yuan, 7.367 million yuan, and 10.445 million yuan respectively, and his son Liang Guo's salary is far ahead, with 4.06 million yuan, 14.654 million yuan, and 30.285 million yuan respectively.
(Photo / Wind)
It is worth noting that in 2022, among the senior management of Zhifei Biotech, a listed company in vaccine research and development, Jiang Rensheng, chairman and president, will only receive 900,000 yuan, and the highest-paid directors Du Lin and Yang Shilong will be 1.2 million yuan.
(Photo / Wind)
In fact, when he gets a salary of more than 30 million yuan in 2022, Liang Guo is only 30 years old. It can be said that when Clover Bio's performance was losing money for a long time, Liang Peng and his son still did not treat themselves badly.
However, Clover's capital chain is not very sufficient.
According to the financial report, as of December 31, 2023, Clover's cash and bank balances (including cash and cash equivalents, time deposits, restricted cash and mortgage deposits) decreased by about 41% year-on-year to RMB1.095 billion, and short-term bank loans were RMB308 million, with interest rates ranging from 3.45% to 7.3261%.
(Photo / Clover Biotech Financial Report)
As we all know, drug research and development is a very "money-burning" process, and for Clover, which has little revenue, long-term losses, and many products in the research and development stage, these funds may not be able to support it for too long.
3. Shareholders frequently cash out, and Hillhouse is trapped
Actually, clover creatures don't stop there.
Founded in 2007, Clover Biotech looks back on the past 17 years of development, and can be said to be "a bear breaks a stick - break one, lose one." ”
According to the 2023 financial report, the company's current commercially available products are only the new crown vaccine and quadrivalent influenza vaccine. Among them, the quadrivalent influenza vaccine is the proxy vaccine.
At the time of disclosure in the 2021 prospectus, Clover's pipeline included six Trimer-Tag™ subunit vaccine candidates, two Trimer-Tag™ oncology treatment product candidates, and three Fc fusion protein product candidates.
(Photo / Clover Biotech Prospectus)
Among them, SCB-808 (etanercept prefilled syringe preparation) for rheumatoid spondylitis (AS) is expected to complete Phase III trials in the second half of 2023, and if the research and development goes well, commercial launch is just around the corner.
But Clover quickly abandoned part of its pipeline. In June 2022, the Company announced that it was suspending continued investment in SCB-313 (TRAIL-trimer oncology product), SCB-808 and SCB-420 (Fc fusion protein program) due to the prioritization of resources for COVID-19-related products and certain early-stage programs/platforms.
(Photo / Clover Announcement)
In the 2023 financial report, the company also announced that it has decided to suspend several projects, including SCB-808, to allocate more resources mainly for the research and development of the respiratory vaccine product pipeline.
As of the end of 2023, the company is developing rabies vaccine, RSV vaccine, new crown vaccine (SCB-2023B), SCB-219M for tumor chemotherapy-associated thrombocytopenia (CIT), and SCB-313 for endoluminal malignancies, all of which are in phase I clinical trials and previous stages.
(Photo / Clover Biotech Financial Report)
It is still unknown when these products will be successfully commercialized, but the capital market no longer wants to see Clover continue to "paint the pie".
Wind data shows that Clover's intraday share price once reached HK$14.8 per share. In December 2022, the relevant departments announced the full liberalization of the epidemic, and the company's stock price was less than HK$5 per share at this time.
Since then, Clover's share price has been declining. In July 2023, its closing price was below HK$1 per share for the first time, and although it has rebounded since then, it has finally been unable to recover. As of April 12, 2024, Clover closed at HK$0.365 per share, which has fallen into a "penny stock".
While the stock price is falling endlessly, shareholders are also reducing their holdings and cashing out. Wind data shows that according to incomplete statistics, from July 2022 to March 2024, shareholders reduced their holdings in Clover Biotech several times.
(Photo / Clover Bio)
In July 2022, Delos Capital reduced its holdings of 15,264,800 shares of Clover at a price of HK$4.15 per share, cashing out more than HK$60 million.
除此之外,Liang Peng减持7次,合计减持超20万股;Liang Joshua G减持4次,合计减持35万股。
However, there are many more investors who are deeply trapped.
For example, as of June 30, 2023, JNRY V held a 7.05% stake in Clover and AUT held a 5.13% stake, both of which are controlled by Hillhouse Capital, Wind data shows.
(Photo / Wind)
According to Clover's prospectus, AUT participated in the B-2 round of investment at an investment cost of 16.52 yuan per share and invested 172 million yuan, while JNRY V participated in the C round of financing with an investment of 95 million US dollars and a cost per share of 6.73 US dollars (about 48.71 yuan according to the exchange rate on April 12) or 52.27 yuan.
(Photo / Clover Biotech Prospectus)
Today, the cost of both of Hillhouse Capital's investments is far higher than Clover's share price, both in RMB and US dollars, and the top-tier capital is deeply trapped.
Behind Hillhouse Capital, there are thousands of investors trapped in Clover, and these investors are waiting for new opportunities to come, but they don't know if Clover's RSV vaccine can bring new hope to companies and investors.
*The title image in the article comes from: Camera.com, based on VRF protocol.