On October 28, Baike Biology (688276) held a performance briefing for the third quarter of 2024. The company’s board members, including General Manager Kong Wei, Executive Deputy General Manager Jiang Chunlai, and Board Secretary Zhang Zhe, communicated with investors regarding the operating results and financial status for the third quarter of 2024.

Baike Biology is an innovative biopharmaceutical company mainly focused on infectious disease prevention and control. Since its establishment, it has primarily engaged in the research, development, production, and sale of human vaccines. The company currently has approved vaccines, including chickenpox vaccines, intranasal flu vaccines, and shingles vaccines.

Among these, the chickenpox vaccine has maintained a leading market share for many years, making it one of the company's primary sources of revenue. The intranasal flu vaccine is a part of the World Health Organization's (WHO) Global Influenza Action Plan (GAP) and is the only attenuated live influenza vaccine administered intranasally in China, greatly enhancing adherence among recipients. The shingles vaccine developed by the company is the first domestic vaccine for shingles aimed at individuals aged 40 and older, breaking the monopoly of imported vaccines in the domestic shingles prevention market.

According to Baike Biology’s report for the third quarter of 2024, the company achieved operating revenue of 1.026 billion yuan, a year-on-year decrease of 17.47%; net profit was 244 million yuan, down 26.19%; and non-net profit was 245 million yuan, down 24.84%.

In the third quarter, the decrease in sales of the shingles attenuated live vaccine led to a reduction in operating revenue and net profit for Baike Biology. The shingles vaccine received its Drug Registration Certificate from the National Medical Products Administration in 2023 and obtained the Biological Product Batch Release Certificate in April 2023. The net profit growth in 2023, as well as in the first quarter and first half of 2024, was attributed to the addition of the shingles attenuated live vaccine during the reporting period.

During the performance briefing, Baike Biology explained that the decrease in sales of the shingles vaccine was due to external environmental factors affecting adults' willingness to get vaccinated, as well as reduced stock from clients, leading to a decline in vaccination and shipments compared to the same period last year and a reduction in revenue.

"The company is actively responding to these adverse factors by increasing the number of promoters, broadening promotional channels, and actively piloting and advancing primary care physician prescription projects. We are continuously pushing forward the digital marketing of shingles attenuated live vaccine products in an effort to enhance end-user awareness and willingness to vaccinate against shingles," Baike Biology stated.

Baike Biology emphasizes its focus on business operation and development, systematically advancing its R&D, production, batch release, and sales processes while continuing to concentrate on its core business.

In the first three quarters, the domestic sales of Baike's chickenpox vaccine saw a slight year-on-year increase. Facing declining birth rates and increasing market competition, the company is leveraging the technological advantages of its chickenpox vaccine, which can be administered to people over 12 years old, and intensifying market development and promotional efforts, resulting in an improved market share.

Additionally, the application for marketing approval of the intranasal attenuated live flu vaccine (liquid formulation) has been accepted, and inspections of the production and clinical trial sites have been completed.

"The company’s customer base consists of disease control centers across various regions, operating under a model of provincial bidding, county and district procurement, and vaccination point usage, with no involvement in centralized procurement matters," Baike Biology mentioned in response to investor inquiries.

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