On January 10th, the stock prices of HPV vaccine concept stocks Wantai Biotechnology (603392. SH, stock price 76.8 yuan, market value 97.398 billion yuan), Zhifei Biotechnology (300122. SZ, stock price 52.32 yuan, market value 125.568 billion yuan), and Watson Biotechnology (300142. SZ, stock price 21.66 yuan, market value 34.815 billion yuan) all fell, with a closing decline of 5.94%, 5.61%, and 1.23%, respectively. On the news side, Merck announced on the 9th that the second dose vaccination program for 9-14 year old women with the nine valent HPV vaccine (from June to December) has been approved. This means that multinational pharmaceutical companies that have monopolized the global nine price HPV market for six years are starting to offer lower priced vaccination plans.
It is worth noting that currently, other HPV vaccines in China have simplified the dosage, and women aged 9-14 only need to receive two doses; In the United States, Merck's nine valent HPV vaccine has also been recommended by the CDC (Centers for Disease Control and Prevention) for women aged 9-14 to receive two doses.
The delayed arrival of two batches of vaccination programs in China seems to be a precautionary measure for Merck's response to domestic competitors. Even if calculated based on the normal launch time, Wantai Biotechnology's nine valent HPV vaccine will be approved for sale around 2025, leaving only one year of customer acquisition window for MSD.
The cost of domestic vaccine administration will decrease by thousands of yuan due to the alignment of the two dose program
According to a research report by Ping An Securities, based on the winning bid price in 2023, Merck's nine valent HPV vaccine is the most expensive HPV vaccine in China, with a single dose price of up to 1298-1310 yuan, almost four times that of domestic two valent HPV vaccines; However, in terms of batch issuance volume, the demand for high priced HPV vaccines among eligible women has only increased and not decreased - in the first half of 2023, a total of 14.678176 million batches of Merck's nine valent HPV vaccines were issued, a year-on-year increase of 57.85%.
On the morning of January 10th, a source from Merck informed the Daily Economic News that the nine valent HPV vaccine developed by the company has only been approved for the addition of two doses in the vaccination process for female vaccinators aged 9-14. The dosage of a single dose has not changed, and the price of a single dose has not been adjusted.
The approval of the new vaccination program means that the corresponding immunization cost will be reduced by thousands of yuan.
It is worth mentioning that in the Chinese market, MSD is the latest manufacturer to adjust the number of HPV vaccine doses.
According to a reporter from the Daily Economic News, there are currently four domestic manufacturers providing HPV vaccines, including Merck, GlaxoSmithKline, Watson Biotech, and Vantai Biotech. The bivalent HPV vaccines from Watson Biotech and Vantai Biotech have been simplified since their launch, and women aged 9-14 can use a 2-dose program (from 0 to June); GlaxoSmithKline's bivalent HPV vaccine was also approved for a two dose vaccination program in May 2022, suitable for women aged 9-14.
According to the data, girls aged 9-14 are the primary vaccinated population recommended by the World Health Organization. Professor Qiao Youlin from the School of Group Medicine and Public Health at Peking Union Medical College pointed out that receiving the HPV vaccine can easily stimulate better immune responses in this group of people. Women who have not engaged in sexual activity will receive the best preventive effect when receiving the HPV vaccine. The second dose vaccination program from June to December has simplified the vaccination process, released more vaccine resources, and will further promote the increase of vaccination rates for young women in China.
In fact, as early as December 20, 2022, the World Health Organization issued a position paper on the HPV vaccine, recommending that girls aged 9-14 receive one or two doses of the HPV vaccine, girls aged 15-20 receive one or two doses of the HPV vaccine, and women aged 21 and above receive two doses of the HPV vaccine with a 6-month interval between them.
The reporter also noticed that the CDC's official website recommends that children aged 9-14 only receive two doses of HPV vaccine, because "data obtained from current scientific research shows that among children aged 9-14, receiving two doses of HPV vaccine every at least 6 months is as good or better than receiving three doses." The final review date on this page is November 1, 2021.
Advance Prevention of Domestic Nine valent HPV Vaccines: Multiple Vaccine Stocks Respond to Decline
As the world's first company to launch nine valent and four valent HPV vaccines, Merck's success in the HPV vaccine field is evident to all. According to the company's financial report, HPV vaccine products achieved a total revenue of 7.015 billion US dollars in the first three quarters of 2023, a year-on-year increase of 29%, making it the company's most profitable drug after K-drug.
By region, out of the revenue of 7.015 billion US dollars, 1.718 billion US dollars came from the US region, a decrease of 5% year-on-year; The revenue from the international market was 5.297 billion US dollars, a year-on-year increase of 46%. Meanwhile, in the first three quarters of 2023, the Chinese market brought in $5.255 billion in revenue for MSD, accounting for 13%, making it the second largest overseas market for the company outside of Europe and America.
But Chinese competitors are bringing direct pressure. According to the November research report of Southwest Securities, domestic HPV vaccines are generally expected to be listed one after another after 2025, involving listed companies such as Wantai Biology, Watson Biology, Kangle Wei Shi, Ruike Biology, etc. Among them, Wantai Biology and Kangle Wei Shi's nine valent HPV vaccines (for female indications) are progressing the fastest and have entered phase III clinical trials. In late December 2023, it was rumored that Wantai Biotechnology's nine valent HPV vaccine would be listed early, triggering a frenzy in the stock market.
Meanwhile, according to the annual report of Zhifei Biotechnology, the agent of Merck's 9-valent HPV vaccine in China, the gross profit margin of the company's agency business (Merck accounts for 93.16% of its procurement proportion) in 2022 was 28.66%, a year-on-year decrease of 4.40 percentage points.
In this context, the two doses of Merck's nine valent HPV vaccine indicate a clear sense of preparedness. Previously, the company had also put in effort in terms of audience and production capacity. For example, on August 30, 2022, the company announced that the target audience for the nine valent HPV vaccine was expanded from women aged 16-26 to women aged 9-45, and the expanded population was consistent with the target audience for the two valent HPV vaccine; Mona Tian, the President of MSD China, has stated that the company has invested over $1 billion to increase the production capacity of its existing HPV vaccine production facilities. From 2017 to 2020, the supply of HPV vaccines almost doubled, and with the continued expansion of production capacity, the supply is expected to double again by 2023.
In addition, in 2021, MSD has launched a phase three clinical trial in China to evaluate the protective efficacy, immunogenicity, and safety of the nine valent HPV vaccine in men. Currently, its male nine valent HPV vaccine is in the "application for market" stage.
Before the official debut of the domestically produced nine valent HPV vaccine, these rounds of defense are likely to cause a "dimensionality reduction blow" to the bivalent HPV vaccine. At the close of the 10th, the stock prices of Wantai Biotechnology, Zhifei Biotechnology, and Watson Biotechnology fell by 5.94%, 5.61%, and 1.23%, respectively.