On the evening of January 21, Jiangsu Ruike Biotechnology Co., Ltd. (hereinafter referred to as “Ruike biotechnology”) submitted a prospectus to the Hong Kong stock exchange, with Morgan Stanley, China Merchants Bank International and Citic Securities Company Limited(600030) as its co sponsors.
If Ruike biology successfully landed in Hong Kong stocks, it will become one of the few targets in the Hong Kong stock vaccine sector, and will also be awarded the title of “the first share of HPV vaccine in Hong Kong stocks”.
core products are not available
the company has suffered losses for consecutive years
Founded in 2012, Ruike biology is engaged in the production and manufacturing of innovative vaccines. It has three technical platforms: new adjuvant development, protein engineering and immune evaluation. It is one of the few companies that can independently develop new adjuvants. At the same time, the company has 12 vaccine lines, including HPV vaccine, COVID-19 vaccine, adult tuberculosis vaccine, hand foot mouth disease vaccine, influenza vaccine and so on.
According to the prospectus, HPV vaccine and covid-19 vaccine are the fastest developing products in Ruike biological product line.
At present, the nine valent HPV vaccine of Ruike biology is in phase III clinical stage, and it is expected to submit the listing application in 2025. It is reported that Chinese enterprises at this stage also include Bowei biology, Kangle satellite TV, Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) etc., but generally speaking, the market competition is not fierce.
Meanwhile, the company’s recombinant protein covid-19 vaccine recov and mRNA covid-19 vaccine r520a have also entered the key research and development stage. It is expected to submit an emergency use authorization application in 2022. On January 14, 2022, Ruike biology announced that the Philippines had approved covid-19 vaccine recov for phase II / III clinical study.
A medical industry practitioner told the Securities Daily that the covid-19 vaccine r520a of Ruike biology has obvious effectiveness on Omicron strain, and as a freeze-dried mRNA vaccine, it is easier to store and transport, which has also become its unique competitive advantage.
Although the company seems to have a leading edge, Ruike biology has not entered the approved commercialized products, and its profitability is not good. According to the data, the total losses of the company in 2019, 2020 and the first nine months of 2021 were 138 million yuan, 179 million yuan and 520 million yuan respectively; The R & D costs in the same period were 63.3 million yuan, 131 million yuan and 372 million yuan respectively.
Sequoia Capital
investment by several well-known institutions
As a vaccine that can effectively prevent cancer, the market demand for HPV vaccine is extremely strong, and it has been strongly encouraged at the policy level. It is understood that the HPV vaccines listed in the world are bivalent, tetravalent and jiuvalent vaccines respectively. According to Northeast Securities Co.Ltd(000686) statistical data, in 2020, the market scale of HPV nine valent vaccine will reach 13.1 billion yuan, which is expected to reach 69 billion yuan by 2030.
At present, there are only Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) bivalent HPV vaccines approved for marketing in China, GlaxoSmithKline bivalent vaccine, mersadon tetravalent vaccine and jiuvalent vaccine. According to frost Sullivan’s data, from 2017 to 2020, the total batch issuance of mosadon tetravalent vaccine and jiuvalent vaccine in China were 16.9 million and 9.6 million respectively. Compared with the total population of China, the vaccination rate of HPV vaccine is less than 1%.
Even considering the expected increase of HPV vaccination rate, 234 million women aged 9 to 45 will not be vaccinated with HPV vaccine in China by 2025. Assuming three doses per person, 702 million doses may be required. In addition, according to the earlier data of the National Bureau of statistics, there are about 120 million people of age (16-26 years old) with nine valent HPV vaccine alone.
At the same time, in terms of policy, the country is also vigorously responding to the World Health Organization’s global strategy to accelerate the elimination of cervical cancer. Up to now, many provinces and cities such as Inner Mongolia, Fujian, Shandong and Guangdong have begun to introduce policies related to free HPV vaccination.
Based on the huge expected market volume and policy encouragement, the capital market favors relevant vaccine companies.
Taking Ruike biology as an example, according to the prospectus, the company completed four rounds of financing from March 2019 to June 2021, with a cumulative financing amount of RMB 2.351 billion. Investors include Sequoia Capital, Junlian capital, Temasek and other well-known investment institutions. By June 2021, when the company’s round C financing was completed, its valuation had risen to RMB 8.965 billion.
The above-mentioned medical industry practitioners told the reporter of Securities Daily that Chongqing Zhifei Biological Products Co.Ltd(300122) relies on the HPV vaccine acting as the agent of MSD, and the market value has exceeded 100 billion yuan; Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) with bivalent HPV vaccine and nine valent HPV vaccine under development, the market value also exceeds 100 billion yuan. This time, Ruike biology chose to land in Hong Kong stocks, focusing on its consistent preference for the medical field. It is expected that Ruike biology will also achieve a good valuation.
Turning to the future development, Ruike biology said that the IPO fund-raising will be used for clinical trials and registration of a variety of vaccine products, including recombinant HPV bivalent candidate vaccines rec601 and rec602, adjuvant second-generation HPV candidate vaccines rec604a and rec604b, and coved-19 pneumonia vaccine recov.
