How expensive is HPV vaccine?Reco bio lost $520 million in nine months

2022-08-02 0 By

HPV vaccine “a needle is difficult to find”, before the Spring Festival, known as “domestic nine price HPV vaccine pioneer”, Ruike biology, to the Hong Kong Stock Exchange again submitted a prospectus, intent to sprint Hong Kong “HPV vaccine first unit”.Ruike biology this issue, by Morgan Stanley, China Merchants International, Citic securities co-sponsor.Behind it, there are sequoia Hanchen, China Merchants International, Junlian Capital, Oriental Fuhai, Temasek and other luxury capital groups.In June 2021, the company completed a SERIES C financing, and its valuation soared to nearly 9 billion yuan.However, while standing in the outside world’s HPV vaccine business draught, The high valuation of Rike biology behind, but “not profitable”.In addition to still not having a product on the market, Reco bio lost 520 million yuan in the first nine months of 2021 alone, with research and development costs of 372 million yuan in the same period.Previously, Rekbio had submitted its first form to the Hong Kong Stock Exchange on July 16, 2021, but it was automatically classified as “invalid” because it failed to pass the hearing within six months.After a lapse of more than five months, Rikbio has re-entered the Hong Kong stock Exchange, but some investors worry that it is also “too hasty”.Who would have thought that just four years ago, Reco Bio was a company with only 21 employees paying social security.It was formed in 2019 by the merger of Beijing Anbaisheng and Jiangsu Ruike Biotechnology Co., LTD.On Women’s Day in 2011, Liu yong decided to give up his status as a professor at the Chinese Center for Disease Control and Prevention (CDC) and registered a company that develops vaccines for HPV and other diseases, Beijing Anbaisheng.Later, in 2012, Yu Rong, founder of Meian Health, and three independent investors also set up Jiangsu Ruike Bio.Beijing Yum’s early development was not smooth.In terms of the number of patents, The company has not applied for a single one in six years since it applied for 10 patents in 2013.By 2022, Beijing Yum! Brands has applied for a total of 20 invention patents, compared with peer Wantai biological 52 invention patents, Beijing Yum! Brands research and development strength needs to be improved.At the beginning of its establishment, Jiangsu Ruike Biology positioned itself as the main business of vaccine process amplification.But before the merger, jiangsu Ruike’s business scale has not been too big progress.According to the National Enterprise Credit Information Disclosure System, jiangsu Ruike Bio had only 19 employees in 2016;In 2018, it still had 21 employees.It was not until 2019, when It formed a partnership with Beijing Anbaisheng, that the number of employees in The company jumped to 107.When the two companies were founded, the domestic vaccine industry was also in its early stages.Prior to 2015, capital markets were not enthusiastic about investing in the vaccine industry.Before the merger, Beijing Yum has never obtained financing, Liu Yong once said to the media that It is a miracle that Rike can survive, “in the 10 years of entrepreneurship, Rike has been in a state of extremely tight cash flow for almost 8 years.”In 2016, the “Shandong vaccine case” once sparked public opinion.In March 2016, shandong police uncovered a case of 570 million yuan worth of illegal vaccines, which were transported and sold to 24 provinces and cities without strict cold chain storage, including 25 types of second-class vaccines for children and adults.Since then, the growth of the domestic vaccine industry has been stagnant for two years.On July 17, 2018, the “Changsheng Vaccine event” once again aroused the whole country.Changchun Changsheng Biotechnology Co., LTD was found to have falsified records in the production of freeze-dried rabies vaccine for human use, according to a notice issued by the National Medical Products Administration.This has become one of the most serious negative events in domestic vaccine production, putting the entire vaccine industry on the cusp of controversy.In July 2018, REC603, a nine-valent HPV vaccine developed by Beijing Yum, was finally approved by the State Food and Drug Administration under an umbrella IND, which means the vaccine can enter the clinical development stage.However, clinical research and development is extremely “expensive”, Liu Yong must find a donor as soon as possible to support the development of nine-valent HPV vaccine.Thus, the jiangsu Ruike biological entered the line of sight of Liu Yong in 2017.Since June 2012, Jiangsu Ruike Biological has established a close cooperation relationship with Beijing Anbaisheng in research and development, so the two sides hit it off.When the two sides merge, take is by Liu Yong and other acquisition of Jiangsu Ruike biology, and then by Ruike biology acquisition Of Beijing Anyi Yum “reverse takeover”.In 2019, Beijing Yum Was acquired by Reco Bio for 11.033 million yuan, and the reorganization and integration are “to further strengthen r&d cooperation with Beijing Yum”, according to the prospectus.When Beijing Yum was founded in 2011, Liu yong owned 53.85 percent of the company.Liu yong, through Jinnuo Tongzhou and Dingcheng Daohe, accumulated a 50% stake in Rike bio before acquiring Beijing Yum in January 2019.After the completion of the merger, Liu Yong and the employee stock ownership platform under his control jointly hold 21.63% of The shares of Rike Biological, and Beijing Yum Has been fully controlled by Rike Biological.Up to now, The largest shareholder of Rike Bio is Junlian Capital, holding 10.66%;Shanghai Chaorui owns 8.34 per cent, LYFE Capital 7.7 per cent and Oriental Fuhai 7.43 per cent. Almost all of its major shareholders holding more than 5 per cent are investment institutions.It is worth noting that There is no actual controller or controlling shareholder.-02- How much money can be made from the ace vaccine?Regco bio has the courage to enter the Hong Kong Stock Exchange twice in six months, and its “trump card” is no doubt its five HPV vaccine pipelines.HPV, or human papillomavirus, is the main cause of cervical cancer, and vaccination against HPV can reduce the risk of cervical cancer.There are three common TYPES of HPV vaccines on the market: bivalent, quadrivalent and nine-valent.The “price” refers to the number of types of viruses that can be prevented, with the nine-valent HPV vaccine providing the most protection.Reco bio has two bivalent HPV vaccine pipelines, one tetravalent HPV vaccine pipeline, and two nine-valent HPV vaccine pipelines, which is a business that Beijing Yum has started since its establishment in 2011.According to the prospectus, REC603, the aluminum adjuvant HPV nine-valent vaccine, has entered phase III clinical trials and is the closest to commercialization of REC603’s vaccine portfolio.According to the report of qianzhan Industry Research Institute, according to the census combined with the current domestic HPV vaccine main application population and census data, excluding about 10 million people have been vaccinated, can be estimated that the current domestic HPV vaccine stock demand gap is still 320 million people;At the same time, the National Bureau of Statistics shows that the nine-valent HPV vaccine is available to about 120 million people aged 16-26.The frost Sullivan Report predicts that China’s first HPV vaccine will be approved in 2017.Since then, the market size of HPV vaccine has grown to 13.1 billion yuan in 2020 and is expected to reach 69 billion yuan in 2030, with a cagR of 18.0% from 2020 to 2030.In this huge market, the nine-valent HPV vaccine has become the mainstream product.According to the Frost Sullivan report, the market size of nine-valent HPV vaccine in China will reach 41.1 billion yuan by 2030.In the future, domestic vaccine replacement will also be “promising”.In China, in recent years, there was a nine-valent HPV vaccine “a needle is difficult to find”.Some people even travel thousands of miles to book an appointment to get a shot.However, as of now, Reco bio has no approved products for commercial sale, nor does it generate any revenue from vaccine sales.The company is in deficit for a long time, and the deficit is expanding year by year.In 2019, 2020 and the first three quarters of 2021, the total loss of the company is 138 million yuan, 179 million yuan and 520 million yuan respectively.In the absence of revenue from its main business, the company’s losses are mainly due to its research and development expenses and financial costs.In 2019 and 2020, Reco bio spent 63.265 million yuan and 131 million yuan on R&D, respectively.In 2019 and 2020, the financial cost will be 76.163 million yuan and 37.112 million yuan respectively.In the future, Reco’s revenue will depend entirely on the successful commercialization of its vaccine.But there are big uncertainties.For now, the HPV vaccine market has turned into a carnival of existing players.How much of that bonus will be available to new entrants as HPV vaccine adoption accelerates is questionable.In November 2020, the WTO called on 194 countries around the world to work together to achieve 90% of women vaccinated against HPV by the age of 15 by 2030.After that, all parts of the country also carried out a positive response.Since 2020, ordos city in Inner Mongolia, Xiamen city in Fujian Province, Jinan city in Shandong Province, Guangdong Province, Chengdu city in Sichuan Province, Wuxi and Lianyun District in Jiangsu Province, Zhengzhou city in Henan Province, and Shijiazhuang city in Hebei Province have launched or announced free HPV vaccination programs.On February 7, 2022, Hainan province announced that it will provide free local HPV bivalent vaccine to women of eligible age in the province.After that, free HPV vaccinations will continue to be offered across the country.For companies, the profitability of bivalent HPV vaccines is also “discounted.”As early as the end of 2020, Vosen Bio ignored investors’ dissatisfaction by proposing to sell a 32.6 percent stake in its subsidiary Shanghai Zerun for 1.14 billion yuan.At that time, Shanghai Zerun took the lead in the development of bivalent HPV vaccine in China.However, in a conference call later, Watson bio said that “the future HPV vaccine competition is fierce, (Shanghai Zerun) profitability is not good”, once caused a heated debate.The commercialisation of The pipeline of two bivalent HPV vaccines that Reco has in hand is also unclear.In terms of nine-valent HPV vaccine, the domestic r&d track has gathered a number of players, including Wantai Biological, Kangle Guardian, Bowei biological, and has become crowded.Recorbio’s nine-valent HPV vaccines are expected to enter phase III clinical trials later than Bovibio’s, and they are not expected to reach the market until around 2025 at the earliest, barring any unexpected delays.It’s worth noting that Merck, the global pharmaceutical giant, is trying to speed up its market dominance during the “comfort zone” when there are few rivals for the HPV vaccine.Flavibio, which acts as an agent for Merck, has increased its purchase of HPV vaccines.In December 2021, Jifid signed an agreement with MSD, agreeing to purchase HPV vaccine in 2021 and 2022 at an annual basis cost of 10.289 billion yuan and 11.557 billion yuan respectively, a significant increase compared with 2020.Deppon Securities has estimated that the domestic nine-valent HPV vaccine market will become saturated in a short period of one and a half years to seven years.After the successful merger, the first major event that Reco bio did was to launch the ReCOV industrialization project of novel coronavirus vaccine in 2020, which directly led to the “pre-ind (clinical application) expenditure” of its r&d expenditure that year soaring from 4.246 million yuan in 2019 to 54.863 million yuan.The research and development of COVID-19 vaccine is not the company’s specialty.Of its 12 innovative vaccine pipeline, HPV is its biggest area of expertise.This time, it has shifted its focus to research and development of COVID-19 vaccines, in part, industry insiders believe, because of the potential for huge profits.In 2020, the “dual-concept stock” of COVID-19 vaccine and HPV vaccine, Flavibio, saw its share price increase by 240.44%, and its market value increased by five times compared with the beginning of the year.Meanwhile, A domestic HPV vaccine head manufacturer, Wantai Bio-tech, also started a COVID-19 vaccine related project during the pandemic.In order to develop the novel coronavirus vaccine, Reco also chose to enter into an agreement with the Shanghai Public Health Clinical Center to transfer the relevant technology.However, the deal is also putting pressure on Reco Bio.According to the agreement, Reco bio not only needs to pay 1 million yuan upfront, but also needs to pay up to 44 million yuan during the r&d phase, with “milestone” installments based on the development progress;In addition, upon the successful commercialization of ReCOV, Reco Bio is also obligated to pay 1% of the total sales revenue to jiangsu Center for Disease Control and Prevention as sales commission.As of now, Reco Bio’s COVID-19 vaccine ReCOV is undergoing phase I clinical trials in New Zealand.In order to obtain enough samples, clinical trials of COVID-19 vaccines will have to be carried out in hard-hit regions overseas as the epidemic in China eases, raising research and development costs.Currently, there are 33 COVID-19 vaccines on the market worldwide, 12 of which are recombinant protein vaccines similar to Reco;Section 63 is in phase III or later stages;162 are in clinical development.In the words of Liu Yong, chairman of Reco Bio, “the vaccine industry is developing at a rare opportunity in 200 years.”However, facing huge cost pressure and market pressure, Reco biological must race against time.This article is originally produced by AI Finance, a subsidiary of Caijing Weekly. Please do not reprint it without permission.Offenders shall be prosecuted.