HPV (human papillomavirus) vaccine used to prevent cervical cancer is difficult to obtain, and the nearly 100 billion market attracts more capital to "enter". Accelerate the pace of domestic vaccine research and development, and seize the first place of HPV related enterprises in the near future.
On February 15, 2022, the new third board company Kangle guard (833575. NQ) announced that it plans to publicly issue shares to unspecified qualified investors and list them on the Beijing stock exchange. The number of shares to be issued is no more than 44.53 million, the reserve price is 77.68 yuan / share, and the issuing object is expected to be no less than 100. The proposal still needs to be deliberated and approved by the general meeting of shareholders of the company.
Previously, on January 21, the Hong Kong stock exchange had accepted the IPO application materials submitted by Jiangsu Ruike biology for the second time; Morgan Stanley, China Merchants International and Citic Securities Company Limited(600030) are the co sponsors of the company. According to the interface news, as early as half a year ago, Ruike biology submitted the materials for the listing of Hong Kong stocks on July 16, 2021.
At present, the two HPV vaccine R & D companies, which have been established for more than 10 years, are still losing money, and their core products, nine valent HPV vaccines, are in phase III clinical trials. Next, the capital market will be another "battlefield" between Kangle guard and rec biology.
There is a gap of 700 million doses of vaccine. How can Kangle guard and Ruike biology seize business opportunities?
The HPV vaccine market has great prospects for Kangle guard and Ruike biology.
Since the first approval of HPV vaccine in China in 2017, the market scale of HPV vaccine has increased to 13.5 billion yuan in 2020 and is expected to increase to 69 billion yuan in 2030. At present, there are four commercial HPV vaccine products in China, namely Xinkening (bivalent) of Xiamen Wantai Canghai biotechnology, Cervarix (bivalent) of GlaxoSmithKline, Gardasil (tetravalent) and gardasil9 (bivalent) of Merck. In 2020, in terms of output value, Gardasil and gardasil9 accounted for about 91% of the total HPV market in China in 2020.
Nevertheless, the Chinese HPV market is still in short supply. The total number of garsidal and garsidal studies approved in China since 2020 is 16900000, and the total number of garsidal and garsidal approved in China since 2018 is 16900000 respectively; Compared with the total population, the vaccination rate of HPV vaccine in China is less than 1%. Even considering the expected increase of HPV vaccination rate, frost Sullivan predicts that 234 million women aged 9 to 45 will not be vaccinated with HPV vaccine in China by 2025. Assuming 3 doses per person, an additional 702 million doses may be required.
Source: Hong Kong stock prospectus of Ruike biology on January 21, 2022
Headquartered in Beijing, Kangle guard was established in 2008 and is mainly engaged in the research and development of recombinant protein vaccines. At present, the main project of Kangle guard is the research and development of a series of HPV vaccines based on HPV virus structure design; It claims to be the "first echelon of domestic HPV vaccine development", and its pipeline core products include recombinant trivalent, nine valent and fifteen valent HPV vaccines, recombinant bivalent covid-19 vaccine, recombinant polyvalent norovirus vaccine, recombinant respiratory syncytial virus vaccine and recombinant herpes zoster vaccine.
Source: Kangle Guardian official website
wellness guard pointed out that at present, the company's recombinant trivalent and jiuvalent HPV vaccine has entered phase III clinical practice and ranked among the top three. It is planned to complete the phase III clinical work of trivalent and jiuvalent HPV vaccine in 2-4 years . Among them, the phase III clinical trial of trivalent HPV vaccine was launched on October 17, 2020, and all subjects have been enrolled; The phase III clinical trial of nine valent HPV vaccine was launched in December 2020.
In addition, the fifteen valent HPV vaccine jointly developed by Kangle guard and Liaoning Chengda Biotechnology Co.Ltd(688739) ( Liaoning Chengda Biotechnology Co.Ltd(688739) . SH) has completed all preclinical research work, and has submitted the pre communication application for clinical trial registration in April 2021. At present, it is in the pre communication stage, waiting for CDE (drug evaluation center of the State Drug Administration) to accept the clinical application (ind).
In addition, according to the semi annual report of 2021, after the outbreak of covid-19, Kangle guards carried out independent research and development and preclinical research on covid-19 vaccine; At present, the pharmacodynamics evaluation of recombinant bivalent covid-19 virus vaccine has been completed, the animal protection efficacy determination and safety evaluation have been completed, and the animal anti-virus experiment is under way. It is expected to submit the clinical trial application (ind) in the fourth quarter of 2021.
Ruike biology, headquartered in Taizhou, Jiangsu Province, was founded in 2012, mainly focusing on the research and development of HPV candidate vaccines. It has established a vaccine combination composed of 12 candidate vaccines. Its core product recombinant HPV nine valent vaccine rec603 is currently in phase III clinical trial stage, and it is planned to complete three doses in the first half of 2022, Submit BLA application to the State Food and Drug Administration in 2025 .
Source: Hong Kong stock prospectus of Ruike biology on January 21, 2022
According to the prospectus, Ruike biology is currently developing two covid-19 vaccines. Among them, the phase I recombinant covid-19 pneumonia vaccine recov was approved by the Philippine FDA for clinical trial in January 2022 and can conduct global phase II / phase III trials on recov; The company plans to carry out the global phase II / III test of recov in the first quarter of 2022.
Kangle guard and rec biological products have a high degree of coincidence, and the R & D progress is also close. Both companies focused on the development of nine valent HPV vaccine, and both entered the phase III clinical trial stage. It is reported that there are only five HPV nine valent candidate vaccines in phase III clinical trials in China. Ruike biology believes that considering that HPV nine valent vaccine is unlikely to be included in China's national vaccination mechanism, the company expects that its main customers will be individual customers rather than CDC.
Meanwhile, Ruike biology estimated that with the further promotion of pilot areas such as Guangdong, HPV bivalent candidate vaccines are likely to be included in the national immunization plan, which will lead to a significant increase in the sales of these vaccine products. In view of this, the company plans to adopt competitive prices for bivalent candidate vaccines, so as to seek to be incorporated into China's national vaccination mechanism; " currently expects the price to be lower than Gardasil or gardasil9 ".
At present, Ruike biology has stepped up the construction of phase I vaccine production base. According to its disclosure, the company is building an HPV vaccine production base in Taizhou. The design capacity of phase I is 5 million doses of HPV bivalent vaccine or 30 million doses of HPV bivalent vaccine per year, which is expected to be completed by the end of 2022. "The project may be expanded to more than 10 million doses of HPV nine valent vaccine or 60 million doses of HPV two valent vaccine every year; we plan to build another HPV vaccine production base on the reserved land if necessary after the commercialization of our HPV vaccine.".
Kangle guard is also accelerating the construction of industrialization base during the construction period. It is reported that its Kunming industrialization base covers an area of about 140 Mu and a construction area of 75000 square meters. After being put into operation, it will achieve an annual production capacity of 30 million recombinant HPV vaccines and 5 million recombinant polyvalent norovirus. In June 2021, the main construction of the raw liquid and preparation production workshop building of the base was completed. In addition, wellness guard stepped up its overseas promotion work, strengthened its communication with Gates Foundation, participated in the HPV vaccine procurement plan of who, and promoted the internationalization of HPV vaccine; In addition, at the end of May 2021, the company signed a contract with Russian Pharmaceutical Group Co., Ltd. (hereinafter referred to as "Russian Pharmaceutical Group"), Russian Pharmaceutical Group will bear all the expenses for the preclinical and clinical development of nine valent HPV vaccine in Russia, and Kangle guard will receive the sales commission of nine valent HPV vaccine after commercialization in Russia.
It has been established for more than ten years and is still losing money. Can't star shareholders wait?
As a R & D pharmaceutical enterprise in the clinical stage, Ruike biology and Kangle guard have been losing money since their establishment.
According to the prospectus, Ruike biology has not successfully carried out the commercial sales of any candidate vaccine, nor has it generated any income through vaccine sales. From January to September in 2019, 2020 and 2021, the company lost 138 million yuan, 179 million yuan and 520 million yuan respectively, cumulative loss was about 837 million yuan ; The R & D costs are 63.265 million yuan, 131 million yuan and 372 million yuan respectively.
Source: Hong Kong stock prospectus of Ruike biology on January 21, 2022
"We may continue to incur significant expenses and operating losses in the foreseeable future." Ruike biology estimates that the full year net loss in 2021 will increase significantly compared with that in 2020, "especially our R & D expenditure will increase by more than 200%. Due to the increase of R & D activities for the development of candidate vaccines (especially rec603 and recov), we expect our net loss to continue to increase in 2022".
In 2019, 2020 and the first half of 2021, Kangle guard lost 419505 million yuan, 152 million yuan and 221 million yuan respectively, cumulative loss was about 415 million yuan, half less than that of Ruike biology ; During this period, the R & D expenses of the company were also significantly lower than those of Ruike biology, which were 229544 million yuan, 118 million yuan and 998567 million yuan respectively.
Image source: wind
It should be noted that in the past three years, the management expenses of Kangle guards listed on the new third board in 2015 have soared due to fund-raising consulting fees, equity incentive plan and accrued share based payment costs. In 2019, 2020 and the first half of 2021, the management expenses of the company were 180505 million yuan, 339512 million yuan and 125 million yuan respectively. It is disclosed that in April 2021, Xiaojiang bio, the holding subsidiary of the controlling shareholder of Kangle guard, signed the incentive agreement with Liu Yongjiang, Ma runlin and Yao miansong respectively, and Xiaojiang bio agreed to implement equity incentive for the three by increasing their capital to Jiang linweihua. Jiang linweihua holds 10.18% of the shares of Kangle guard. During the reporting period, Kangle guard confirmed that the share payment fee of 106 million yuan was included in the current management fee.
After losing money for many years, the two vaccine R & D companies all rely on continuous financing to "survive".
According to Tianyan survey, from 2017 to June 2021, Ruike biology completed six consecutive rounds of financing and raised more than 3.5 billion yuan in total. According to the prospectus, at present, Junlian capital (holding 10.66%), ZhouLing capital (7.7%), Dongfang Fuhai (7.43%), woying investment (6.07%), China Merchants Bank International (5.11%), Sequoia Hanchen (3%), Qingchi capital (2.88%) and meinian great health (2.24%) are among the major shareholders of Ruike biology.
Source: Hong Kong stock prospectus of Ruike biology on January 21, 2022
According to the round C financing completed in May 2021, the round C investors agreed to subscribe for 4.825 million shares of Ruike biological's increased registered capital at a total price of 965 million yuan. After this round of capital increase, the registered capital of the company increased to 44.825 million yuan. It is estimated that the unit price of shares subscribed by investors in round C is 200 yuan / share of registered capital; If its registered capital is converted into shares, at that time, investors valued Ruike biology at about RMB 8.965 billion
Look at the recreation guard. The company has been listed on the new third board since September 2015, but it only started fixed increase financing in 2019. So far, the company has completed four rounds of fixed increase, with a cumulative fund-raising amount of about 1.722 billion yuan. The investment institutions include Yunnan Dianzhong Industrial Development Group, Beijing Yizhuang biomedical M & A investment center, small and medium-sized enterprise development fund, Dongfang Fuhai, Yunfeng fund, etc. In addition, according to tianyancha, Shenzhen Venture Capital once participated in the initial stage of Kangle guard in 2008 and 2009 as of February 25, 2022, the latest share price of the company is 66.71 yuan / share, and the latest market value is 8.9 billion yuan
Drawing: Guo Jingjing
For Kangle guard and Ruike biology, it may be a big test to accept stricter compliance supervision in the capital market.
Even the wellness guard, which has been listed on the new third board, has irregularities in corporate governance. According to the regulatory documents issued on February 15, 2022, the national stock transfer company found that on December 10, 2021, Kangle guard disclosed the early accounting error correction announcement, and retroactively adjusted the financial data from 2017 to 2020 and the half year of 2021 due to the adjustment of the capitalization amount of R & D expenses and the cut-off error of R & D expenses; For example, the impact values of net profit adjustment from 2017 to 2020 and the first half of 2021 are -133010 million yuan, - 134128 million yuan, - 355010 million yuan, - 1107769 million yuan and -870956 million yuan respectively. The national stock transfer company pointed out that the above-mentioned acts of Kangle guard violated relevant regulatory provisions and constituted violations of information disclosure; Take self regulatory measures to issue warning letters to Kangle guard and its then chairman Hao Chunli and financial director Dong Wei.
For the relevant regulatory measures, the relevant person of Kangle guard Securities Department told the interface news reporter, "we don't think it will have an impact (on IPO matters)."
