Key investment points
Monthly topic: mRNA: from technical reserve to accelerated verification
Marginal impact: accelerate the verification of the platform and accelerate the development of new vaccines / therapies. In April 2022, Cansino Biologics Inc(688185) , Shijiazhuang Pharmaceutical Group announced that mRNA covid-19 vaccine was approved for clinical use. From the clinical pipeline of prevention and treatment, the application of mRNA technology in China accelerated to catch up. According to the article published in naturereview by Wenxie et al. In September 2021, it is estimated that the total market space of mRNA in the field of treatment and prevention will be about 23-30 billion US dollars in 2035. We believe that the core of biotech’s evolution is the technical barrier and commercial cooperation network. The marginal impact of the clinical approval of two mRNA covid-19 vaccines in China on the industry is the acceleration of process platform verification and the acceleration of new vaccine / therapy research and development. We are optimistic about the potential large-scale space for China’s biotech from technology catching up to overtaking on curves and producing upstream “water sellers”.
① global leading company pipeline: from prevention to treatment.
(1) prevention: there are more vaccines for respiratory diseases, and the progress of RSV deserves attention. We found that the mRNA vaccine pipelines of various companies are mostly concentrated in seasonal influenza, RSV vaccine, malaria vaccine, herpes simplex virus vaccine, herpes zoster vaccine, tuberculosis vaccine and other preventive vaccines.
(2) treatment: the first breakthrough in tumor vaccine and combination therapy. We are concerned that the pipeline of the leading company focuses on the three fields of tumor treatment, rare diseases and autoimmune diseases, and the combination therapy may take the lead in making a breakthrough. Among them, two mRNA tumor vaccine products for the combined treatment of melanoma by biontech and Moderna have entered clinical phase II, and the follow-up progress is worth looking forward to.
② cost and supply chain: optimistic about the potential of large-scale water sellers.
Cost composition: enzyme, sequence modification and LNP may be the links with the highest value in the industrial chain. According to the analysis of the production data of Moderna and biontech published by zoltankis et al in msfacces in September 2021, the average cost of producing one dose of mRNA covid-19 vaccine by the two companies is 17.6 yuan and 8.3 yuan respectively. In the cost composition, the cost of raw materials accounts for about 60-70% of the total cost, and the average cost of consumables accounts for 15-25%. See the following for details:
(1) cost composition of raw materials: Mod UTP solution and cleancapag solution account for 22% and 45% of the cost of raw materials. DNA temsector and enzyme are the upstream raw materials for mRNA preparation. The production of DNA temsector is mainly the production of plasmid. The customized production and purification process of plasmid accounts for 13% of the cost of raw materials, and the cost of LNP preparation accounts for a relatively small proportion of the cost of raw materials (6%).
(2) cost composition of consumables: the cost of wave bag, accessories and membrane bag accounts for 60-70% and 15-20% of the cost of consumables respectively.
③ investment suggestion: from the perspective of product companies, we suggest paying attention to the clinical progress of covid-19 mRNA vaccine of Cansino Biologics Inc(688185) , Shijiazhuang Pharmaceutical Group and other companies, and looking forward to the mRNA vaccine pipeline to promote the verification and extension of the two companies’ technical platforms and production processes. In addition, in combination with the product layout and cooperation of various companies, it is suggested to pay attention to the pipeline progress of Walvax Biotechnology Co.Ltd(300142) (Aibo Biology), Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Aimei vaccine (Zhuhai rivanda), Yunding Xinyao, Si microorganism (unlisted) and other companies. From the perspective of supply chain, we suggest paying attention to the potential volume space of Kingsley biotechnology, saiwan biology, Nanjing Vazyme Biotech Co.Ltd(688105) , Jenkem Technology Co.Ltd(688356) , boten biology, Yisheng Biology (unlisted) and other companies.
Monthly tracking of vaccine batch issuance and export data
2022q1 batch issuance: HPV and rabies vaccines increased significantly year-on-year. From the perspective of batch issuance of key varieties, the batch issuance of 2022q12 HPV vaccine and rabies vaccine increased significantly year-on-year. During 2022q1, the batch issuance times of bivalent HPV vaccine accounted for about 73% of the total batch issuance times of HPV vaccine, and the batch issuance times of human diploid rabies vaccine accounted for about 11.1% of the total batch issuance times of rabies vaccine, both of which increased year-on-year. From the perspective of batch issuance of key companies, the batch issuance of 2022q1 Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) , MSD, Amy vaccine and other companies increased year-on-year. Increase in the price of five batches of HPV vaccines issued by the company Shenzhen Kangtai Biological Products Co.Ltd(300601) 13 valent pneumonia conjugate vaccine has been issued for about 12 times. We are concerned about the contribution of the company’s listing of new varieties to performance growth in 2022. It is worth noting that the issuance volume of a single batch has a certain fluctuation. The batch quantity can only reflect the issuance volume of the batch from the side, and there is a time difference between the short-term batch issuance and the company’s post sales revenue recognition. We suggest smoothing the monthly / quarterly batch fluctuation to see the growth trend of the company and varieties.
Covid-19 vaccine and export: the export volume increased by 8.3% year-on-year from January to February, and the proportion of booster needles increased. As of August 2027, 19.64% of the global population had received at least 19.2 doses of vid vaccine, but the global population had received at least 19.4-21 doses of vid vaccine. From the export data, the export volume of Chinese vaccines for human use from January to February 2022 was 10.3 billion yuan, a year-on-year increase of 8.4%; In terms of subregions, Beijing’s vaccine exports accounted for 57.3% of China’s total exports, the proportion of Liaoning Province, Yunnan Province and Sichuan Province increased, and the proportion of Guangdong Province, Tianjin city and Anhui Province decreased.
Investment advice
We believe that the investment in the vaccine industry has both the attributes of consumer goods and scientific and technological products. It is suggested to pay attention to the structural improvement under consumption upgrading (multi linked high price + vaccine with lower side effects) + supply release (centralized listing), the investment window brought by the large volume of single products in the short and medium term, pay attention to the upgrading of pipeline under research and the opportunity to overtake me better or even firstinclass varieties in the corner, and recommend Chongqing Zhifei Biological Products Co.Ltd(300122) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) , Cansino Biologics Inc(688185) and other companies, It is suggested to pay attention to Shenzhen Kangtai Biological Products Co.Ltd(300601) , Chengdu Kanghua Biological Products Co.Ltd(300841) , etc.
Risk tips
The risk that the clinical promotion speed of vaccine is lower than expected, the risk of changes in China’s vaccine procurement policy, the risk of production / transportation safety accidents, and the risk of repeated covid-19 epidemic.
