All content in this article is a case study of industry research and company research, and does not constitute any investment advice, does not constitute any investment recommendation. There are three other points worth noting:
1. Short-term price fluctuations are almost unpredictable. But the market will be full of God's predictions driven by huge profits.
2. No matter how good the business, if the basic conditions change greatly, there is also a risk of failure.
3. Good companies with overvalued prices, with tighter liquidity, may also have a long-term correction if profit growth does not meet expectations.
introduction
With the COVID-19 pandemic still a few months away from wreaking havoc around the world for nearly two years, the fight against COVID-19 is no longer a short-term battle, but a protracted battle.
Many variants have emerged, among which the Delta variant is currently the most widely affected, and for the variant, the call for vaccination of vaccines with enhanced needles and higher protection rates under the premise of safety is increasing.
In this context, vaccine manufacturing companies have attracted much attention from the capital market. In foreign countries, represented by Moderna and BioNTech, the market value has risen sharply in just a few months; in China, Watson Biologics and Fosun Pharmaceutical have attracted much attention and controversy. Today, the medical researcher will interpret for you the king of vaccines that is on the cusp of the storm - Watson Biology.
summary
1. The global vaccine market shows a typical characteristics of heavy variety-driven development, and the top ten vaccine varieties have achieved a total sales of 23.55 billion US dollars, accounting for more than 50% of the total global vaccine market. And the market concentration is extremely high.
Watson Biologics already has two of the largest global sales of 13-valent pneumonia conjugate vaccine and HPV vaccine. Among them, the 13-valent pneumonia conjugate vaccine has been produced and sold, and the company is the first domestic and second manufacturer in the world to have a 13-valent pneumonia conjugate vaccine, and is currently the only enterprise in the world that has both the 13-valent pneumonia conjugate vaccine and the 23-valent pneumonia vaccine.
2. The new crown virus and its variants endanger the lives of people around the world, and the mRNA vaccine is a new "weapon" to resist the proliferation of the new crown virus and its variants, which has cross-era significance.
Aibo Biologics is a leading enterprise in the development of mRNA vaccines in China, which has carried out phase III clinical trials in foreign countries and china, and the administrative approval of the new crown mRNA vaccine and herpes zoster mRNA vaccine cooperated by Aibo Biology and Watson Biology in the target market is held by Watson Biology, and Watson Biology is responsible for product production and sales.
Note: This article does not discuss the vaccine production part, vaccine production capacity is one of the core competitiveness of Watson Bio, the next article we will supplement.
Company Risk Warning (Impossible):
1. The results of the mRNA vaccine clinical phase 3 and the time and result of approval are uncertain.
2. Kangtai Biological Blockbuster Product - 13-valent pneumonia vaccine has entered the "approval in the approval" stage, that is, the administrative approval stage. CanSino, Lanzhou Institute and Zhifei Bio 13-valent pneumonia vaccine entered phase 3 clinical trials. (Clinical progress and approval progress are highly uncertain.) ）
3. Wantai Biological Bivalent HPV Vaccine First-mover Advantage occupies more markets, and the nine-valent HPV vaccine is currently making faster progress.
Basic Concepts (Source: Wantai Bio, Yiqiao Shenzhou Prospectus, Baidu Encyclopedia, Zhihu)
Amino: Amino (Amino) consists of one nitrogen atom and two hydrogen atoms with the chemical formula -NH2. Amino is the basic base in organic chemistry, and all organic matter containing amino acids has certain alkali properties. Bases, also known as nuclear bases and nitrogen-containing bases in biochemistry, are nitrogen-containing compounds that form nucleosides, and nucleosides are components of nucleotides. Monomers such as bases, nucleosides and nucleotides form the basic building blocks of nucleic acids.
There are five common bases in organisms, namely adenine (A), guanine (G), cytosine (C), thymine (T) and uracil (U).
Suō group: is a basic functional group in organic chemistry, consisting of one carbon atom, two oxygen atoms, and one hydrogen atom with the chemical formula -COOH. Functional groups are atoms or groups of atoms that determine the chemical properties of organic compounds.
Amino acids: a generic term for a class of organic compounds containing amino and carboxyl groups, and are the basic building blocks of biologically functional macromolecules.
DNA: DNA, consisting of nitrogen-containing bases + DNA + phosphoric acid. DNA is a nucleic acid that is one of the four biological macromolecules contained within biological cells. The order in which the bases in dna are arranged constitutes genetic information. This genetic information can be formed through a transcriptional process to form RNA, and then the mRNA in it is produced by translation to produce a polypeptide, forming a protein.
RNA: Ribonucleic acid, composed of nitrogen-containing bases + ribose + phosphoric acid, is a carrier of genetic information present in biological cells and some viruses and viruses. The role of RNA in the body is mainly to guide the synthesis of proteins.
mRNA: Messenger RNA, is a large class of RNA molecules that transmit genetic information from DNA to ribosomes, where they serve as templates for protein synthesis and determine the amino acid sequences of peptide chains of protein products for gene expression.
Protein: A substance with a certain spatial structure formed by a polypeptide chain composed of amino acids in a "dehydrated and condensed" manner through coiled folding.
Antigen: A class of substances that can produce an immune response in humans and animals, which can stimulate the immune system to produce a specific immune response, form antibodies and sensitized lymphocytes, and can combine with them to react. It is usually a protein, but polysaccharides and nucleic acids can also act as antigens.
Antibodies: immunoglobulins with a protective effect produced by the body due to the stimulation of antigens.
Coronavirus: It is an RNA virus with an encapsular membrane and a linear single-strand positive chain. The capsule membrane refers to the lipid bilayer membrane composed of proteins, polysaccharides and lipids, also known as the envelope, which is coated by the virus shell.
The main function of the viral capsule membrane is to help the virus enter the host cell. First, the glycoproteins on the envelope surface recognize and bind to host surface receptors, then the viral envelope binds to the host cell membrane, and finally the viral capsid and viral genome enter the host to complete the infection process.
The 2019 novel coronavirus is currently the seventh known coronavirus that can infect people, and the remaining 6 species are HCoV-229E, HCoV-OC43, HCoV-NL63, HCoV-HKU1, SARS-CoV (causing severe acute respiratory syndrome) and MERS-CoV (causing Middle East respiratory syndrome).
The envelope of these viruses has spinous processes shaped like the corona, so it is proposed to name these viruses as coronaviruses.
Human papillomavirus, HPV: A genus of papilloma vacuolevirus belonging to the family Lactoclerovirus, is a spherical DNA virus that can cause the proliferation of the squamous epithelium of the human skin mucosa. Presents with symptoms such as common warts and genital warts (genital warts).
Streptococcus pneumoniae: Streptococcus pneumoniae mainly causes human lobar pneumonia. Some normal people carry the toxic force of Streptococcus pneumoniae in the upper respiratory tract. It can be seen that the respiratory mucosa has a strong natural resistance to Streptococcus pneumoniae. When something decreases this immune function, Streptococcus pneumoniae can cause infection.
Polysaccharide vaccines: there are a variety of carbohydrates in bacteria, which play an important role in bacterial identification, signaling, adhesion, infection and defense, among which pathogenicity is related to CPS and lipopolysaccharide LPS O antigen polysaccharide O-PS. Due to the immunogenicity of polysaccharides, the vaccine made after the specific polysaccharide is purified is called a polysaccharide vaccine.
Vaccines and Watson Bio's main product introduction
Vaccines refer to vaccine-like preventive biological products used for human vaccination in order to prevent and control the occurrence and epidemic of infectious diseases. Biological products refer to preparations prepared from microorganisms or their toxins, enzymes, serums, cells, etc. of humans or animals for prevention, diagnosis and treatment.
Infectious diseases have accompanied the development of human history, and we are currently unable to completely eliminate the occurrence of infectious diseases, and the new crown epidemic in 2020 has once again deepened our understanding.
Therefore, the prevention and control of the occurrence of infectious diseases will be the long-term needs of human society, and specific product vaccines will continue to be updated and iterated, and will exist for a long time.
According to the prospectus of Wantai Biologics, the classification of vaccines can be divided according to different classification methods as follows.
Watson Bio's main independent vaccine products are: 13-valent pneumococcal polysaccharide conjugate vaccine (vial type and pre-potion type), 23-valent pneumococcal polysaccharide vaccine, Haemophilus influenzae type b conjugate vaccine (vials and pre-potting type), group A group C meningococcal polysaccharide conjugate vaccine, ACYW135 meningococcal polysaccharide vaccine, group A group C meningococcal polysaccharide vaccine and adsorbed acellular diphtheria combined vaccine a total of 7 products (9 specifications).
The composition of product revenue in 2020 is shown in the following figure:
Key Products - Listed:
13-valent pneumonia vaccine: 13-valent pneumococcal polysaccharide conjugate vaccine. Active immunization in infants and young children to prevent invasive diseases (including bacteremia pneumonia, meningitis, sepsis and 23F) caused by Streptococcus pneumoniae serotypes 1, 3, 4, 5, 6A, 6B, 7F, 9V, 14, 18C, 19A, 19F and 23F.
The domestic market pattern and Watson's proportion in 2020 are as follows:
23-valent pneumonia vaccine: 23-valent pneumococcal polysaccharide vaccine, in principle, suitable for people over 2 years of age.
Important products - under development or approval
HPV Vaccine:
Cervical cancer is a malignant tumor that occurs from the epithelium and glandular epithelium of the cervix, and is one of the most common tumors in gynecology, ranking second in the global cancer mortality rate among women, and even ranking first in some developing countries.
Bivalent HPV vaccine:
Recombinant human papillomavirus bivalent vaccine (yeast) for the prevention of HPV16/18 infection and the consequent genital warts and other diseases.
Nine-valent HPV vaccine:
Recombinant HPV nine-valent granule vaccine for the prevention of HPV6/11/16/18/31/33/45/52/58 infection and the consequent genital warts and cervical cancer.
mRNA vaccine:
The mRNA expressing the antigen-expressing target is introduced into the body through a specific delivery system, expressing the protein in the body and stimulating the body to produce a specific immunological response, so that the body can obtain immune protection.
mRNA vaccines have several significant advantages (Source: Antibody Circle-mRNA Vaccines: A New Era of Vaccinology):
1. Safety: Since mRNA is a non-infectious, non-integrative platform, there is no potential risk of infection or insertion mutation. In addition, mRNA is degraded by normal cellular processes, and its in vivo half-life can be adjusted by using a variety of modification and delivery methods. The intrinsic immunogenicity of mRNAs can also be down-regulated to further improve safety.
2. Effectiveness: Various modifications make mRNA more stable and highly translatable, and by constructing mRNA onto the carrier molecule, it can be rapidly uptaken and expressed in the cytoplasm, thereby achieving efficient in vivo delivery. mRNA is the smallest genetic carrier, therefore, avoids an anti-vector immune response and can be repeated.
3. High production efficiency: mRNA vaccines have the potential for rapid, inexpensive and scalable manufacturing, mainly due to the high yield of transcriptional reactions in vitro.
Policy grooming
China's Vaccine Administration Law has been officially implemented since December 1, 2019, which clarifies that "the state adheres to vaccine products."
Strategic and public welfare", "The state supports basic and applied research on vaccines, promotes vaccine development and innovation, and will prevent,
The development, production and reserve of vaccines for the control of major diseases are included in the national strategy", "The state formulates the development plan and production of the vaccine industry."
Industry policies support the development and structural optimization of the vaccine industry, encourage large-scale and intensive vaccine production, and continuously improve vaccine production
Level of craftsmanship and quality".
The promulgation and implementation of the Vaccine Administration Law is conducive to the long-term healthy development of China's vaccine industry.
Vaccine marketing system
Vaccines marketed in China shall be approved by the drug supervision and administration department under the State Council and obtain a drug registration certificate; the drug supervision and administration department under the State Council shall give priority to the review and approval of vaccines and innovative vaccines urgently needed for disease prevention and control.
In the event of a particularly major public health emergency or other emergency that seriously threatens public health, the competent department of health under the State Council shall, on the basis of the needs of the prevention and control of infectious diseases, put forward a recommendation for the emergency use of vaccines, and may use it urgently within a certain scope and within a certain period of time after the approval of the drug supervision and administration department under the State Council.
In 2020, the Drug Evaluation Center (CDE) of the State Food and Drug Administration accepted a total of 159 vaccine applications, covering multiple varieties such as pneumococcal vaccine, meningitis vaccine, influenza virus vaccine, rabies vaccine, and human papillomavirus vaccine. In 2020, 10 kinds of domestic vaccines were approved for marketing in China, with a total of 12 approvals, involving pneumonia vaccine, encephalitis vaccine, influenza vaccine, DTP vaccine, etc.
Immunization programme system
Residents residing in China enjoy the right to receive immunization programme vaccines in accordance with law and fulfill their obligations to receive immunization programmes. The Government provides immunization programme vaccines to residents free of charge.
Batch issuance system:
Batch issuance "is the supervision and management of vaccine products, blood products, etc. that have obtained marketing permits, and designated drug inspection institutions to conduct data review, on-site verification and sample inspection before each batch of products are listed for sale or imported.
Batch issuance information inquiry: https://www.nifdc.org.cn/nifdc/index.html
Enter the website, click on the information disclosure - announcement notice - find the biological product batch issuance information publicity form of the Central Inspection Institute, you can inquire.
Examples of query results:
Biological Products Batch Issuance Information Publicity Form from The Central Inspection Institute (Issuance Date: July 26, 2021 to August 1, 2021)
Market prospects
According to the annual report of Watson Biology, the global vaccine market shows typical heavy variety-driven development characteristics, and the top ten vaccine varieties have achieved a total sales of 23.55 billion US dollars, accounting for more than 50% of the total global vaccine market. And the market concentration is extremely high, GSK, Merck, Pfizer and Sanofi four major pharmaceutical giants still occupy about 80% of the global vaccine market share. The top ten vaccine varieties in terms of global sales in 2020 are as follows (picture from Watson's annual report):
China's vaccine market also presents such characteristics, the value of the top 10 vaccine varieties in batches accounts for more than 60% of the value of vaccines issued in China, and the top ten vaccine varieties are as follows (picture from Watson Biological Annual Report):
Suppliers and customers
Management
Mr. Li Yunchun, born in 1962, bachelor's degree in preventive medicine. Chinese nationality, no right of permanent residence abroad. Mr. Li Yunchun has nearly 30 years of technical background and enterprise management experience in the medical biological products industry, and was elected as the fifth non-public owner of Yunnan Province in 2019
Outstanding builder of socialism with Chinese characteristics. He has served as a director, chairman and president of the company. He is currently a director and chairman of the board of directors of the company.
Mr. Huang Zhen, born in 1963, master of engineering, is a senior engineer. Chinese nationality, no right of permanent residence abroad. HuangZhen
Mr. Li has been engaged in the research and development and production management of viral and bacterial vaccines for nearly 40 years, led and presided over the completion of 9 national and more than 20 provincial and ministerial scientific research projects, and is a person who enjoys special government allowances of the State Council, and won the honorary title of "National Model Worker" in 2020. Mr. Huang Zhen was the leader of the measles team and the leader of the new product development research office of the Chengdu Institute of Biological Products. He has served as deputy general manager and production director of the company, and is currently the director and vice chairman of the company, the chairman of Yuxi Watson, and the chairman of Yuxi Zerun.
R&D investment and proportion of R&D personnel
shareholder
The company's equity is relatively dispersed, and no shareholder can exercise actual control over the company through direct or indirect holding of the company's shares or through investment relationships; no shareholder can control the election of more than half of the members of the board of directors or the resolution of the board of directors on related matters.
Therefore, there is no controlling shareholder in the company.
Financial statement analysis
The company's financial report reflects the characteristics of the industry, the early research and development investment is not profitable, the revenue and profit after the approval of the 13-valent pneumonia vaccine have increased significantly, the company's debt ratio has dropped significantly, and the cash flow situation has improved. With the promotion of the company's 13-valent pneumonia vaccine, it is believed that the financial situation will continue to improve.
The increase in sales of the new 13-valent pneumonia conjugate vaccine and the original vaccine product increased the sales cost in the same direction. Administrative and financial expenses have been declining.
Subsidiary
Shanghai Zerun Biotechnology Co., Ltd. (hereinafter referred to as "Zerun Biotechnology") is a national high-tech enterprise focusing on the research and development and industrialization of new recombinant human vaccines, and undertaking major national new drug creation projects. The company was founded in 2003 and is located in Zhangjiang Hi-Tech Park, Pudong New Area, Shanghai. Zerun Bio successfully completed the integration with Yunnan Watson Biotechnology Co., Ltd., a listed company on the Shenzhen Growth Enterprise Market, in 2012 and became its holding subsidiary.
Shanghai Zerun R&D progress - until May 2021.
2-valent HPV vaccine has advantages and guaranteed production capacity:
The divalent HPV vaccine developed by Shanghai Zerun is produced using the Pichi yeast expression system, which has many advantages.
For example, the yeast expression level is high, which is conducive to separation and purification; the expression can be strictly controlled; and the stability of the expression product is high.
Watson Bio has made full preparations for the production of HPV vaccines in hardware. The HPV vaccine production plant in Yuxi, Yunnan Province, has been completed and obtained a drug production license issued by the Yunnan Provincial Drug Administration in 2018. The production plant not only meets the domestic GMP standard, but also is designed and constructed according to the WHO-PQ standard under the special funding of the Bill & Melinda Gates Foundation (hereinafter referred to as the "Gates Foundation"), which can help the bivalent HPV vaccine pass the WHO-PQ certification faster and supply the global market in the future.
In terms of approval, Zerun bivalent HPV vaccine has been included in the list of priority review varieties.
The bivalent HPV that has been listed in China is Wantai Bio's Xinkenin.
The product features of Synkolin are as follows:
1. The first in China: The first hpV vaccine approved in China has independent intellectual property rights.
2. Unique process: exclusive use of E. coli expression system.
3. Advantages of immunization program: Exclusively approved HPV vaccine for 9-14 years old with 2 injections in China.
4. Market demand: the world's third cervical cancer vaccine supplier, with a broad market space at home and abroad.
COVID-19 vaccine funding:
On July 21, 2021, the Alliance for Innovation in Epidemic Preparedness (CEPI), a global health nonprofit organization, announced that it will provide $13.1 million to Zerun Biotech and Watson Biotech to support Phase I clinical studies, process optimization and scale-up of COVID-19 prototype vaccines, as well as preclinical studies of mutant vaccines and Phase I clinical studies.
At present, Zerun Bio has successfully developed a vaccine platform technology based on CHO cell antigen expression system and double adjuvant system. The prototype COVID-19 vaccine developed based on the platform technology has been conducted in Phase I/II clinical trials in Henan Province, China. At the same time, Zerun Bio is using the same platform technology to develop a vaccine for the new crown variant, which is also the focus of this funding.
Both candidate COVID-19 vaccines can be stored and transported under normal cold chain conditions, facilitating large-scale production and expected to reach hundreds of millions of doses per year, thus helping to alleviate the global shortage of COVID-19 vaccine supply.
Key partners
Founded in early 2019, Aibo Biotech is an innovative clinical-phase biomedical company focused on the development of messenger ribonucleic acid (mRNA) drugs, with an industry-leading mRNA and nano-delivery technology platform with independent intellectual property rights. The company has established a rich product pipeline, covering infectious disease prevention and treatment and tumor immunity and other fields. In June 2020, the new coronavirus mRNA vaccine (ARCoV) jointly developed by the company, the Military Medical Research Institute of the Academy of Military Sciences and Watson Biology was officially approved by the State Drug Administration for clinical trials, becoming the first mRNA vaccine approved for clinical trials in China. At present, the vaccine has completed phase I and phase II clinical studies, and clinical phase III experiments have been initiated.
The administrative approval of the new crown mRNA vaccine and herpes zoster mRNA vaccine in the target market cooperated by Abo Biologics and Watson Biologics is held by Watson Biologics, and Watson Biologics is responsible for product production and sales.
August 19, 2021 - Suzhou Aibo Biotechnology Co., Ltd. ("Aibo Biotechnology") today announced the completion of a Series C financing facility totaling more than US$700 million. The round was co-led by Temasek, Invesco Developing Markets Fund, Zhengxin Valley Capital, Hillhouse Ventures, Yunfeng Fund, Eli Lilly Asia Fund (LAV), Boyu Investment, Andyama Capital, Gaorong Capital, Chenyi Investment, Octagon Capital, Kaiser, Wuyuan Capital, Heyu Capital, Yahui Investment, Yingke Capital, Taixin Capital, AIHC, Ruihua Capital, Oriental Spring, Legend Capital followed the investment, and the existing shareholders Qiming Venture Capital, Honghui Capital, PICC Capital Equity, Boyuan Capital, CTS Capital and so on continued to be blessed. Since its inception in early 2019, the company has completed four rounds of financing, and the last round of 600 million yuan of B financing was just completed in April this year.
This financing will further enhance Abbax's leading position in China's mRNA field. With the independent innovation of the mRNA technology platform, the company will accelerate the clinical development of the new crown vaccine series, expand the pipeline of other vaccine products, enrich the existing oncology treatment field pipeline, and expand to other more treatment areas. At the same time, the company will be committed to improving China's leading mRNA preparation research and development and large-scale production platform, providing a solid foundation for the transformation and application of mRNA technology in more drug treatment directions.
Source:
Wantai Biology, Yiqiao Shenzhou Prospectus
Watson Bio Annual Report
Runze Bio's official website
Snowball - Arbore 2020
Antibody ring-mRNA vaccines: a new era of vaccinology
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