The once leading player in the vaccine industry is now facing unprecedented challenges.

On August 18th, the semi-annual report released by Chongqing Zhifei Biological Products Co., LTD., a leading domestic vaccine enterprise, showed that the company's revenue was 4.919 billion yuan, a year-on-year plunge of 73.06%. Net profit plummeted sharply from a profit of 2.234 billion yuan in the same period of the previous year to a loss of 597 million yuan.

From the perspective of specific products, in the first half of 2025, the batch release volume of Chongqing Zhifei Biological's nine-valent HPV vaccine dropped by 76.8% year-on-year, from 18.2717 million doses to 4.2388 million doses. The batch release volume of the quadrivalent HPV vaccine has dropped from 466,000 doses in the same period last year to zero. The revenue from its agency of Merck's products dropped from 17.59 billion yuan in the same period last year to 4.37 billion yuan, a decline of 75.16%.

This is the first time that Zhifei Biological has suffered a semi-annual loss since its listing in 2010, and it is also the fourth consecutive quarter of single-quarter losses since the third quarter of 2024.

A pharmaceutical industry analyst from a securities firm told the 21st Century Business Herald that the main reason for the decline in the performance of Chongqing Zhifei Biological Products Co., Ltd. lies in the dual impact of the cyclical fluctuations of its core products and the pressure of channel inventory.

On the one hand, its past performance has been highly dependent on major products such as HPV vaccines and influenza vaccines. During special periods, these products achieved explosive growth by relying on "rigid demand + increased penetration rate". However, starting from 2024, due to the concentrated release of the previous vaccination demand and the inclusion of some second-class vaccines in the free vaccination program, the market space for self-paid vaccines has been compressed. Coupled with the slow digestion of the previous inventory at the channel end, the actual sales volume at the terminal has thus been lower than expected. On the other hand, the demand for Chongqing Zhifei's self-developed products, such as recombinant protein COVID-19 vaccines, has plummeted sharply, further dragging down its overall revenue.

The current situation of Chongqing Zhifei Biological Products Co., Ltd. also reflects the collective predicament faced by the entire domestic vaccine industry after experiencing rapid growth. For these enterprises, how exactly can they break through?

Challenges of the domestic vaccine industry

The decline in the performance of Zhifei Biological was foreshadowed long ago.

According to the financial report, Zhifei Biological faced severe market challenges in 2024, with its revenue dropping significantly to 26.07 billion yuan, a year-on-year decrease of 50.74%. Net profit also significantly decreased to 2.018 billion yuan, a year-on-year decline of 74.99%, reflecting that the industry as a whole has entered an adjustment period. Among them, the revenue of Zhifei Biological Products in 2024 was 25.846 billion yuan, a year-on-year decrease of 51.15%.

In the first quarter of 2025, the revenue of Chongqing Zhifei Biological Products Co., Ltd. continued to decline by 79.16% year-on-year to 2.374 billion yuan. The net profit attributable to shareholders of the listed company for the current period was -305 million yuan, compared with a profit of 1.458 billion yuan in the same period of the previous year.

By the first half of 2025, Chongqing Zhifei Biological Products Co., Ltd. submitted its "worst interim report" since going public. One of the major changes was a significant reduction in the contribution of agency products. In the first six months, the revenue from agency products was approximately 4.37 billion yuan, accounting for about 89% of the total revenue. In 2023 and 2024, the proportion of its agency product revenue was 98.05% and 94.61% respectively. In particular, in 2023, the revenue and gross profit of the agency business centered on Merck's HPV vaccine reached 51.89 billion yuan and 13.32 billion yuan respectively, accounting for 98.05% and 93.5% of the company's total revenue and gross profit respectively.

The predicament faced by Zhifei Biological to some extent reflects the universal challenges of the entire industry. In the past few years, the high growth brought about by HPV vaccines and others has been special and phased. When these driving factors fade away and enterprises fail to cultivate new growth points of equal weight in a timely manner, a change in performance is inevitable. A senior executive of a pharmaceutical company, who preferred to remain anonymous, spoke frankly.

In fact, the predicament of Zhifei Biological is not an isolated case. In the first half of 2025, the entire domestic vaccine industry is undergoing a severe test.

Since the beginning of this year, although Walvax Bio has maintained a certain scale with products such as the 13-valent pneumococcal conjugate vaccine, its growth rate has significantly slowed down and its profits are under obvious pressure. Its flagship product, the bivalent HPV vaccine, is facing close competition from strong rivals such as Wantai Biological, and its sales volume has fallen short of expectations.

On the other hand, Wantai Biological has been affected by market adjustments, government centralized procurement, and the expansion of the age range for its 9-valent HPV vaccine. Its bivalent HPV vaccine, Xinkening, which was once a pioneer in domestic substitution, is also facing the pressure of a slowdown in market growth and intensified competition. Kangtai Biological, Cansino and other enterprises are all facing a situation where the growth of their main products is sluggish and new products are still in the cultivation stage, resulting in a lack of successors. Their performance is generally under considerable pressure.

For a long time, domestic vaccine enterprises have mainly focused on traditional technical route products with high maturity and low market risks. The proportion of similar pipelines is high, and most of them are concentrated on popular vaccine varieties such as HPV vaccines, pneumococcal vaccines and meningococcal vaccines. The launch time of their major products is significantly later than that of leading enterprises in Europe and the United States. This has further led to a continuous intensification of competition in the domestic vaccine stock market and an increasingly obvious homogenization of products.

From the perspective of industry commonality, the performance fluctuations of vaccine enterprises are essentially inherently confined to the "product-driven" business model. Apart from Zhifei, leading enterprises such as Walvax Bio (relying on the 13-valent pneumococcal conjugate vaccine) and Wantai Bio (relying on the bivalent HPV vaccine) are also facing similar problems. The aforementioned analyst pointed out that a single or a few major single products contribute the main revenue, and for some enterprises, the proportion of a single product even exceeds 60%. However, the vaccine research and development cycle is long, the approval process is strict, and there is a ceiling for market penetration rate. Once the core product enters the second half of its life cycle or competition intensifies, performance is prone to significant fluctuations.

Transformation and breakthrough have become a trend

Facing the heavy pressure of performance, transformation and self-rescue have become the common choice for vaccine enterprises. Although the paths are diverse, all of them are confronted with numerous challenges.

In March this year, Zhifei Biological announced that it would increase its investment in Chongqing Chen 'an Biopharmaceutical Co., LTD. (hereinafter referred to as "Chen 'an Biological") by 593 million yuan in cash and acquire 51% of the latter's equity. Chen 'an Biotech ranks among the top in the domestic field of metabolic disease drugs. Chen 'an Biotech has developed over ten ongoing research projects around GLP-1 (glucagon-like peptide-1) preparations. Among them, semaglutide Injection (for lowering blood sugar) has completed Phase III clinical trials. Semaglutide Injection (weight loss) is currently in Phase III clinical trials.

Current market performance indicates that GLP-1 has gradually emerged after PD-1 (programmed death receptor 1), attracting much attention from the industry and has become the new "king of drugs". According to the data disclosed by Novo Nordisk, the combined revenue of its three Semaglupeptide products in the first half of the year was 112.756 billion Dan McCrang (approximately 16.683 billion US dollars).

IQVIA data shows that since the launch of the new GLP-1 agonist in 2021, the sales volume of prescription drugs for obesity has increased significantly. It is expected that by 2031, the sales of this type of drug will exceed 17 billion US dollars, with a compound annual growth rate of 15.6% (from 2021 to 2031). This growth trend is in line with other predictions made by market research institutions. For instance, IQVIA Holdings predicts that by 2027, the expenditure on obesity drugs in the United States will reach 10 billion US dollars, an increase of more than 378%.

As the patent of Semaglutide is set to expire in China and India in 2026, the competition for the first domestic generic product is currently in a white-hot stage. The industry generally regards Zhifei Biological's layout in this field as an important strategy for it to seek new growth points.

Wantai Biological has chosen to enter the "collagen" medical aesthetic materials market. Recently, Jinbo Bio announced that it plans to introduce strategic investors, including issuing no more than 7.1757 million shares to Yangshengtang (the controlling shareholder of Wantai Bio) to raise approximately 2 billion yuan. Meanwhile, Yang Xia, the actual controller of Jinbo Bio, transferred 5.7533 million shares she held to Hangzhou Jiushi at a price of 1.403 billion yuan through an agreement. The actual controller behind both Yangshengtang and Hangzhou Jiushi is Zhong Shanshan.

In the first half of 2025, Jinbo Bio achieved operating revenue of 859 million yuan, representing a year-on-year growth of 42.43%. Net profit attributable to shareholders was 392 million yuan, representing a year-on-year increase of 26.65%. Among them, the revenue from medical devices was 708 million yuan, increasing by 33.41% year-on-year, with A gross profit margin as high as 95.04%. The core driving force was precisely the implant products centered on type A recombinant humanized collagen. By the end of the reporting period, its core product "Weiyimei" had covered over 4,000 terminal medical institutions and became a market bestseller.

According to a report by Frost & Sullivan, the Chinese recombinant collagen market is set to experience rapid growth. By 2025, the overall scale is expected to reach 58.57 billion yuan, and it will grow at a compound annual growth rate of 44.93% over the next five years, reaching 219.38 billion yuan by 2030. With the continuous expansion of application scenarios, the market for recombinant collagen protein shows huge potential and growth space.

Whether in the GLP-1 field or the vaccine race, the leading enterprise landscape has been established, and the competition in the race is extremely fierce. Moreover, the synergy with the existing vaccine businesses of enterprises such as Chongqing Zhifei and Wantai is not high, and cross-border integration is facing numerous difficulties. For domestic vaccine enterprises, this is a high-risk and high-investment gamble. The unnamed executive of a pharmaceutical company commented as follows: The traditional vaccine business has declined, entering an unfamiliar field, and facing brand-new challenges in terms of technology, talent, market and regulation. If a new business requires a huge investment and has a long payback period, the company's cash flow and financial pressure will increase dramatically.

The growth model driven by a single best-selling product or special events is no longer sustainable. Coupled with the adjustment of the industry cycle, all vaccine enterprises have no choice but to confront the severe test of transformation. Whether it is Zhifei Biological's foray into weight loss drugs or Wantai Biological's entry into consumer medical aesthetics, both reflect the instinct and exploration of enterprises to survive in difficult situations. The risks of cross-border transformation cannot be ignored. Who will ultimately emerge victorious in this deep adjustment also needs to be verified by the market.

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