Titanium Media Note:This article comes from WeChat official account eight points health news (ID: HealthInsight), author: Wu Yeting, editor in charge: Wang Jilu, titanium media authorized to publish.
In more than a month, 21 trading limits, the stock price rose from 8.75 yuan to 84.82 yuan, an increase of nearly 9 times, and it has not stopped, Wantai Bio is likely to become the most rising new stock in 2020. This is also far more than the 16 trading limits of WuXi PharmaTech in 2018 and the increase of nearly 5 times.
Along with the stock price, there is the value of the actual controller Zhong Shanshan, whose shares in Wantai Bio have reached 27.60 billion yuan. In September 2001, he spent 17.10 million yuan to buy 95% of the shares in Wantai Bio, which has increased by 1600 times in 19 years. And the low-key Zhong Shanshan, the most well-known commercial version of the picture, is about to be listed on the Hong Kong Stock Exchange. It is estimated that the market value will be 100 billion after the listing, and the wealth of Zhong Shanshan will exceed 100 billion.
Wantai Bio was established in 1991 as a Sino-Japanese joint venture. Since then, its shares have been converted several times, and its main business has remained unchanged. It is mainly engaged in the research and development, production and sales of in vitro diagnostic reagents, in vitro diagnostic instruments and vaccines.
Although the main business is vaccines, Wantai Bio’s first vaccine was developed in 1998 and did not go on sale until 2012. Moreover, this is a hepatitis E vaccine. Its sales revenue in 2019 was only over 14 million, accounting for less than 2%.
To this year, the first real market prospects of the main product, from 2003 began to develop the 2-valent human papillomavirus vaccine (HPV vaccine, cervical cancer vaccine) Xin Kening (Cecolin) before the market, and Wantai biological investment in research and development costs have exceeded 1.10 billion yuan, it can be seen that the pharmaceutical industry really needs time and capital to temper.
Wantai Bio’s Xinkoning is the third HPV vaccine in the world, which was approved on the same day, as well as Watson Bio’s 13-valent pneumococcal polysaccharide conjugate vaccine, which is China’s first 13-valent pneumonia vaccine. Pfizer’s annual sales are $5.80 billion. After the COVID-19 pandemic broke out, Kanginuo and Kexing Bio were in the first sequence of global COVID-19 vaccine development.
So, is China’s vaccine industry starting to shift from the sales-driven trend of the past to the trend of emphasizing R & D and paying attention to both legs? Is the popularity of Wantai Bio a projection of the industry emerging from the shadows after the "vaccine crisis" in 2018, or a capital hype for vaccine stocks under the COVID-19 pandemic?
Since landing on the main board of the Shanghai Stock Exchange on April 29, Wantai Bio has stably maintained the rhythm of the daily limit of each trading day, and by June 1, it has continuously harvested 21 one-word daily limit boards.
Up to now, the record of new shares listed on the main board of the Shanghai Stock Exchange this year is the Star Semiconductor listed in February, which has achieved 22 one-word daily limit. Followed by Wantai Bio, and Wantai Bio has not yet opened the board and is expected to break the record.
And pushing the time forward to a longer cycle, according to Wind data statistics, since the implementation of the first day of listing restrictions on new shares in 2014, a total of 51 new shares have exceeded 20 after listing. After Jucan Optoelectronics, which listed in October 2017, Star Semiconductor and Wantai Bio are the only two new shares that have reached 20 one-word boards in more than two years. Also in the pharmaceutical field, the last one with the largest number of boards was WuXi AppTec, which listed in 2018. After 16 one-word boards, it rose from 21.6 yuan to 92.91 yuan.
According to the data disclosed in the prospectus, Wantai Bio achieved revenue of 949 million, 983 million yuan and 1.184 billion yuan in 2017, 2018 and 2019 respectively, the largest proportion of which is diagnostic reagents. However, this composition is about to change. Wantai Bio’s HPV vaccine has been officially listed in May this year, and the company expects sales revenue to usher in explosive growth.
Since the outbreak of the COVID-19 pandemic, Wantai Bio, together with the National Research Center for Infectious Disease Diagnostics and Vaccine Engineering Technology (NIDVD) of Xiamen University, has developed 11 detection reagents such as the novel coronavirus antibody detection kit (double antigen sandwich method), and invested in the research and development of the recombinant protein new coronavirus vaccine candidate (COVID-19XWG-03).
Detection kits and vaccines related to COVID-19 are an important reason for the continuous rise of Wantai, a securities analyst to eight health news analysis, detection and vaccine are two important concepts involved in Wantai, the former product quality has been internationally recognized, exported to many countries; the latter because the final can be completely against the novel coronavirus will be the vaccine, and the companies involved in the development of COVID-19 vaccines, including Wantai Bio, have a certain degree of overgrowth.
In vitro diagnostics and vaccines are the core business of Wantai Bio.
In vitro diagnosis refers to a diagnostic method that obtains clinical diagnostic information by testing human samples (blood, body fluids, cells, tissues, etc.) outside the human body. Internationally, it is collectively referred to as IVD (In-Vitro Diagnostics). During the COVID-19 pandemic, nucleic acid testing with pharyngeal swab sampling is an in vitro diagnostic method.
According to its prospectus, Wantai Bio has formed characteristic testing products in AIDS, hepatitis, tuberculosis, dengue virus, etc. In 2019, diagnostic reagents and diagnostic instruments generated 1.20 billion yuan of business income for Wantai, accounting for more than 80%.
Compared with in vitro diagnostics, vaccine research and development requires more investment and takes longer to develop and market. The current R & D pipeline includes recombinant hepatitis E vaccine, bivalent cervical cancer vaccine, nine-valent cervical cancer vaccine, next-generation cervical cancer vaccine, and freeze-dried varicella live vaccine, of which only the first two have been approved for marketing.
In the prospectus, Wantai attributed its core competitiveness to its research and development capabilities. As of the end of 2019, the company had a research and development team of 382 people, accounting for 21.41% of the total number of employees.
In addition, Wantai Bio and Xiamen University jointly established the National Infectious Disease Diagnostic Reagents and Vaccine Engineering Technology Research Center, and maintained close cooperation with the team of Xia Ning Shao, Dean of the School of Public Health of Xiamen University.
During the reporting period, the R & D expenses invested by Wantai were 159 million yuan, 138 million yuan and 166 million yuan respectively, accounting for about 15% of the operating income.
This proportion is relatively high in the industry, but it is still not high compared to the nearly 30% of sales expenses.
After the outbreak of the epidemic, Wantai Bio invested in the development of COVID-19 antibody detection kits and COVID-19 vaccines.
In March, the novel coronavirus antibody detection kit (chemiluminescent microparticle immunoassay) was approved by the State Drug Administration on an emergency basis, becoming one of the five novel coronavirus antibody detection reagents that had been approved at that time. Since then, Wantai Bio has developed 11 detection reagents such as the novel coronavirus antibody detection kit (double antigen sandwich method) in conjunction with the National Infectious Disease Diagnostic Reagents and Vaccine Engineering Technology Research Center (NIDVD) of Xiamen University. As of March 30, Wantai Bio has supplied 437,000 detection reagents in China and 502,000 abroad.
According to the information disclosed by Wantai, the product uses a double antigen sandwich method to detect the total antibodies of novel coronavirus in blood samples (including various antibody types such as IgM, IgG and IgA), which methodologically guarantees that the reagent has higher sensitivity and better specificity, and reduces the false positive rate. Since then, several novel coronavirus antibody detection kits developed by Wantai have been certified by the European Union CE and exported to South Korea, Italy, Hungary, Austria, the Netherlands and other countries.
On April 2, Wantai Bio and GlaxoSmithKline (GSK) jointly announced that they have cooperated in the development of novel coronavirus. But at present, compared with other COVID-19 vaccines under development, Wantai Bio has fallen behind.
The launch of the HPV vaccine is a milestone for Wantai Bio.
According to its prospectus, as the third cervical cancer vaccine supplier in the world and the first domestic HPV vaccine to be launched in China, Wantai expects to lead its domestic peers by about two years.
This market is very large, according to Wantai’s calculation, the current domestic cervical cancer vaccination for women aged 9-45 a total of about 300 million people, according to the domestic cervical cancer vaccine price for imported vaccines 1/2 (about 300 yuan/dose, 900 yuan/person) calculation, the stock market size up to 270 billion yuan, according to 1% vaccination rate estimated market demand is 2.70 billion yuan.
Cervical cancer vaccines currently available on the market are divided into bivalent, quadrivalent, and nine-valent. The higher the number, the more virus types that can be prevented. The overall protective efficacy of the bivalent vaccine against cervical cancer prevention is 84.5%, and the overall protective efficacy of the nine-valent vaccine is 92%.
The price and young age group are the advantages of Wantai’s bivalent vaccine, which is priced at 329 yuan/shot. The whole process of vaccination between 9 and 14 years old requires two shots, or 658 yuan; for those over 14 years old, the whole process requires three shots, or 987 yuan. The bivalent vaccine of GSK is 580 yuan/shot, and the whole process costs 1,740 yuan for three shots. Merck’s quadrivalent and nine-valent vaccines are 798 yuan/shot, 1,298 yuan/shot, respectively. Three shots cost 2,394 yuan and 3,894 yuan.
In the past May, Xinkening has been officially launched, and ads for domestic HPV vaccines can be seen on Alipay.
However, there are also pessimistic expectations for market demand. Zhao Heng, founder of Latitude Health, a medical strategy consulting firm, said in an interview with Time Finance that the bivalent cervical cancer vaccine of Wantai Bio will not cause major changes to the current domestic market structure, because the consumption attribute of cervical cancer vaccine is stronger, and consumers prefer the nine-valent, and the advantages of the bivalent cervical cancer vaccine are weaker.
Xiamen University, a partner of Wantai Bio, previously said that the first batch of launch areas are Hubei, Xinjiang, Jilin, Yunnan, Jiangsu, Shandong and other provinces. From this market layout, it can avoid head-to-head confrontation with Merck and GSK to a certain extent, and open the second- and third-tier cities with cost-effectiveness.
In addition to the 2-valent vaccine, the 9-valent HPV vaccine is also in Wantai’s research and development plan. It was approved in 2017 and completed the Phase 1 clinical trial in 2019. It has now entered the Phase 2 clinical trial, ahead of other domestic companies.
It is worth mentioning that Wantai’s research and development technology on HPV vaccines can help improve the protection rate of 9-valent vaccines from 92% to 99%, which has been recognized by GSK, a leading company in the industry. It will pay a total of 134 million euros to Wantai Bio (about 1 billion yuan), use Wantai’s HPV vaccine antigen technology to develop new cervical cancer vaccines, and share the international market sales revenue with Wantai. In November 2019, Wantai received the first milestone payment of 11 million euros (about 85 million yuan).
For many years, China’s vaccine industry has been sales-driven.
In an article, Junlin Investment Research Institute described China’s vaccine industry as: a typical "two legs one big and one small walk" driving model, research and development is the calf, sales is the thigh, because the early research and development costs are high and the later production costs are low, only the more sold, can quickly return to the cost, and generate several times the profit of revenue growth. So whoever can sell the vaccine and earn back the white ocean will have a high status. In a typical vaccine company, Jiang Rensheng of Zhifei Bio has a sales background, Du Weimin of Kangtai Bio has a sales background, Gao Junfang of Changsheng Bio has a financial background, her husband and vice president Zhang Youkui has a sales background, and Li Yunchun, chairperson of Watson Bio, also has a sales background.
The advantage of sales-driven is that it can generate quick cash flow, which is conducive to promoting research and development and launching new vaccines.
For example, Changsheng Bio had a sales cost of 583 million yuan in 2017, and there were 25 sales staff, and the per capita annual sales cost exceeded 23 million. Many cases involving vaccine distributors bribing CDC staff can be found in the judgment document network.
The sales of Wantai biological pre-vaccine are relatively small, but in the sales of testing reagents, the company was also involved in a case of bribery by the director of the hospital’s laboratory department. The company’s overall sales expenses also accounted for a high proportion, approaching 30%.
While focusing on sales, if the product is light, it is prone to problems. Extreme cases are like the Changsheng Biological Vaccine incident in 2018, which pushed substandard vaccines to the market.
After the incident, the vaccine industry was mired in a crisis of confidence and was facing a reshuffle.
At the end of Product Research & Development, good news has come one after another. On December 31, 2019, Wantai Bio’s HPV vaccine and Watson Bio’s 13-valent pneumonia vaccine were approved at the same time, providing room to compete with imported vaccines in these two fields. In the research and development competition of COVID-19 vaccines, more than 130 projects around the world, Kang Xinuo’s adenovirus vector vaccine and Koxing Bio’s inactivated vaccine, are the first to enter clinical trials.
However, the newly approved vaccine, after the listing of the feedback is still unknown. Wantai Bio’s hot market, and the overall rise in the biomedical industry under the epidemic is also related, according to the wind sub-industry index, if the latest index data compared with the beginning of the year to calculate the increase, health care social security and supplies index (50.65%), biotechnology index (45.37%), life science tools and services index (26.01%) are ranked high, like Kang Xinuo’s stock, also rose 3 times at the peak.
Whether China’s vaccine industry will shift from sales-driven to a model that places equal emphasis on sales and research and development is still uncertain. But change is happening.
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