According to what Kangtai Biology disclosed2022Annual and Semi-annual Performance Forecast, with expected operating revenue for the first half of this year18.28Yuan, a year-on-year increase73.72%; net profit attributable to the parent company is1100 million yuan1.3Yuan billion, a decrease compared with the same period last year70.29%—61.37%.
Is the sluggish sales of Kangtai Biotech's COVID-19 vaccine an isolated phenomenon or a broader trend? Has the COVID-19 vaccine market become saturated? Frost & SullivanFrost & Sullivan,Li Qian, Senior Consulting Director for Healthcare in Greater China at Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan'), was interviewed by Blue Whale Finance to discuss the current development status and future prospects of the COVID-19 vaccine market.
Blue Whale Finance
7month24Today, Kangtai Biology, which mainly operates the vaccine business, released2022Annual and semi-annual performance forecast, with net profit expected to decline year-on-year70.29%—61.37%.
After the release of Kangtai Biotech's semi-annual performance forecast, the stock also fell accordingly.7month25Today, Kangtai Biotech opened sharply lower, with a closing price36.32yuan/Shares, down4.92%As of7month27At the close of trading on the day, Kangtai Biology continued its decline, closing at35yuan/share
The announcement pointed out that the main reason for the decline in performance is the impairment provision for assets related to COVID-19 inactivated vaccines and the expensing of Phase III clinical expenses. The company stated that since the second quarter, there have been significant changes in the COVID-19 vaccination environment both domestically and internationally, leading to a rapid decline in demand for COVID-19 vaccines, which has resulted in a sharp drop in the company's sales volume of COVID-19 vaccines.
Will the decline in COVID-19 vaccine sales become a trend?
Image source: Internet
The actual controller cashed out at a high level last year1hundred million
It is worth mentioning that the stock price of Kangtai Biology has been incessantly discussed since last year;2021year2month10The company disclosed that its controlling shareholder and actual controller, Du Weimin, intends to reduce his holdings by no more than20010,000 shares (accounting for the total share capital of the company0.29%); according to2021year9month11Today, the announcement of Kangtai Biology,2021year5month21day-2021year5month25During the period, Du Weimin with180.84yuan/Average share price reduction516000shares, successfully cashed out about9300More than 100,000.
Although he personally cashed out at a high level,9month17On the same day, Du Weimin issued an initiative in his personal capacity, calling on employees of Kangtai Biotech to buy Kangtai Biotech's stocks on the stock market. In the initiative, Du Weimin promised, “Anyone who’2021year9month22day after tomorrow2021year10month29Net purchases of Kangtai Biotech stocks during the period, with continuous holding12Employees who have been employed for more than [X] months and have losses incurred due to purchasing Kangtai Biotech stocks during the aforementioned period, shall be compensated by Mr. Du Weimin.
At that time, the stock price of Kangtai Biology was about70yuan/The shares, relative to the current stock price, resulted in a loss of about half for the employees who had increased their holdings at that time.
According to what Kangtai Biology disclosed2022Annual and Semi-annual Performance Forecast, with expected operating revenue for the first half of this year18.28Yuan, a year-on-year increase73.72%; net profit attributable to the parent company is1100 million yuan-1.3Yuan billion, a decrease compared with the same period last year70.29% - 61.37%.
The demand for COVID-19 vaccines has declined, and sales have fallen rapidly.
Why has revenue not increased but profit decreased in the second quarter?
Regarding the increase in revenue, Kangtai Biotech announced that the main product, Quadrivalent Vaccine (Note: No Cell-based DTP/IPV/ACYW), b Haemophilus influenzae type b conjugate vaccine, for use in3For infants and young children over 6 months old, prevention of pertussis bacillus, diphtheria bacillus, tetanus spirochetes, and b The sales revenue of vaccines for infectious diseases caused by Haemophilus influenzae type b increased by approximately60.13%The sales revenue of the hepatitis B vaccine increased by approximately20.76%, newly listed products of the company13The price of pneumococcal polysaccharide conjugate vaccine has gradually increased in supply.
Regarding the decline in profits, Kangtai Biotech stated that the main reasons are the provision for impairment of assets related to COVID-19 inactivated vaccines and the expensing of Phase III clinical expenses. 'Since the second quarter, there have been significant changes in the COVID-19 vaccination environment both domestically and internationally, leading to a decrease in demand for COVID-19 vaccines and a rapid decline in the company's sales volume. The company's COVID-19 inactivated vaccine is still in Phase III clinical trials overseas. Due to the impact of the Russia-Ukraine war, the unblinding of Phase III clinical data in Ukraine has been delayed, which poses significant uncertainty for future sales.'
Kangtai Biotech stated that the company has identified inventory goods, raw materials and auxiliary materials related to COVID-19 vaccines with signs of impairment, as well as self-made semi-finished products, as of2022year3Provision for asset impairment is made for COVID-19 vaccine development expenditures at the end of the month4.15100 million yuan. At the same time, the R & D expenditure on COVID-19 inactivated vaccines incurred in the second quarter was expensed, amounting to1.40Yuan. The above matters result in a total reduction of total profit5.55Yuan billion. Considering the impact of additional deductions, net profit is reduced.4.52100 million yuan.
Kangtai Biotech was established in1992year9Yue, headquartered in Shenzhen and founded on vaccines,2017year2month7It was listed on the Growth Enterprise Market of the Shenzhen Stock Exchange, with a maximum market value exceeding one hundred billion.2021The annual report shows that the main products of Kangtai Biotech include recombinant hepatitis B vaccine.(brewing yeast),13Pneumococcal polysaccharide conjugate vaccine,bHaemophilus influenzae type b conjugate vaccine, measles-rubella combined attenuated live vaccine, acellular pertussis and diphtheria vaccinebHaemophilus influenzae type b conjugate vaccine,23Pneumococcal polysaccharide vaccine, etc.
The COVID-19 inactivated vaccine developed by Kangtai Biology is2021year5The drug has been approved for emergency use in China.2021year6The vaccine was launched for sale domestically, becoming the sixth COVID-19 vaccine in China to be approved for emergency use or marketing. According to the 'Prospectus for the Issuance of Convertible Corporate Bonds to the Public' disclosed by the company, the 'Baiwangxin Emergency Engineering Construction Project' is mainly used for the production of inactivated COVID-19 vaccines, with a total investment of23.81100 million yuan, project operation period10In [year], the designed production capacity is2100 million doses/year.
In addition, the adenovirus vector COVID-19 vaccine co-developed by Kangtai Biotech and AstraZeneca is2021year10The product has obtained emergency use authorization from the Indonesian National Drug and Food Administration and is exported.2021In [year], Kangtai Biotech achieved revenue36.52Yuan, of which export revenue reached9.57Yuan, a significant year-on-year increase39020.94%The company has not disclosed the specific sales situation of last year's COVID-19 vaccine. However, according to CITIC Construction Investment Securities' estimates, the COVID-19 vaccine for the company2021The proportion of annual revenue contribution exceeds50%.
The future market for COVID-19 vaccines is trending towards saturation.
Has the COVID-19 vaccine market become saturated?
Li Qian
Senior Healthcare Industry Consultant, Frost & Sullivan Greater China
On this, Frost & Sullivan's Senior Healthcare Industry Consultant for Greater China Li Qian pointed out that the sluggish sales of Kangtai Biotech's vaccines may not be an isolated phenomenon. The market space for basic immunization is gradually becoming saturated, and as demand decreases, the sales volume of COVID-19 vaccines has shown a certain downward trend.
According to data from the National Health Commission, as of2022year7month23On _, the full-course basic immunization coverage rate in China was89.7%, Strengthening immunization rates71.7%Among them,60At least for the elderly over1Dose vaccination rate89.6%, vaccination coverage rate for the entire process84.7%, Strengthening immunization rates67.3%.
Currently, there are7The COVID-19 vaccines of domestic enterprises can be sold domestically. Except for the recombinant protein COVID-19 vaccine developed by ZF Bio and the adenovirus vector COVID-19 vaccine developed by CanSino Biologics, the rest are inactivated COVID-19 vaccines.
Regarding the future of COVID-19 vaccine manufacturers, Li Qian pointed out that although the overall market space for COVID-19 vaccines is not as broad as it was at the beginning of the pandemic, the development and production of COVID-19 vaccines have brought about rapid technological progress. At the same time, they have greatly enhanced the clinical development capabilities of new vaccine platforms, promoted the process of large-scale production, and expanded the commercialization level.
"In the long run, vaccine manufacturers can leverage their accumulated research and development experience and validated technology platforms to move into other disease areas, not just COVID-19 vaccines. In the future, manufacturers of COVID-19 vaccines can apply these newly developed capabilities to the development of other vaccines, drugs, and treatment methods," said Li Qian.
*This article is reprinted from Blue Whale Finance. , Author: Tu Jun Original title: Kangtai Sheng Property's performance “changes face” and stock price plummet: COVID-19 vaccine market approaching saturation, founder cashing out at high levels ">
Frost & Sullivan Insight & Extended Readings
Q: What is the market outlook for COVID-19 vaccines in the future, and has the market become saturated or oversupplied? Is the sluggish sales of Kangtai Biotech's COVID-19 vaccine an isolated phenomenon or a broader issue?
A: The sluggish sales of Kangtai Biotech's vaccines may not be an isolated phenomenon. The market space for basic immunization is gradually becoming saturated, and as demand decreases, the sales volume of COVID-19 vaccines has shown a certain downward trend. Some manufacturers even face overcapacity. For those COVID-19 vaccines that are still in clinical trials, have a high degree of homogeneity with already launched products, and lack differentiated advantages, they may have missed the best entry point into the COVID-19 vaccine market and may find it difficult to regain a significant market share. In the current situation where the COVID-19 pandemic is recurring and mutating rapidly, there is still a demand for people to receive third and fourth booster shots as well as new vaccines with better efficacy. The market potential of COVID-19 vaccines remains worth exploring.
