September 3, Jilin Province Public Resources Trading Center issued a document that will Zhifei Biological 23-valent pneumococcal polysaccharide vaccine from the original 298/branch down to 209 yuan/branch, down 29.87%. The following day, the Jiangsu Provincial Public Resources Trading Center issued a notice that also reduced the vaccine from 298/branch to 209 yuan/branch. At the end of August last year, Zhifei Biological's 23-valent pneumococcal polysaccharide vaccine was formally approved for marketing in China for the prevention of infectious diseases caused by pneumococcus bacteria in children aged 2 years and above and adults. According to the half-year report of Zhifei Biological 2024, the approved and issued volume of its 23-valent pneumonia vaccine was 160,000 doses from January to June this year. During the same period, the approved and issued volume of Merck Sharp & Dohme's 23-valent pneumonia vaccine, for which Zhifei Bio is the agent, amounted to 845,000 units, a year-on-year increase of 3.83%.

Vaccine market “price for volume” is gradually expanding, and now has spread to the field of pneumonia vaccine.

September 3, Jilin Province, the Public Resources Trading Center issued a document that will Zhifei Biological 23-valent pneumococcal polysaccharide vaccine from the original 298 / branch down to 209 yuan / branch, down 29.87%. The following day, the Jiangsu Provincial Public Resources Trading Center issued a notice that also reduced the vaccine from 298/branch to 209 yuan/branch.

At the end of August last year, Zhifei Biological's 23-valent pneumococcal polysaccharide vaccine was formally approved for marketing in China for the prevention of infectious diseases caused by pneumococcus bacteria in children aged 2 years and above and adults. According to the half-year report of Zhifei Biological 2024, the approved and issued volume of its 23-valent pneumonia vaccine was 160,000 doses from January to June this year. During the same period, the approved and issued volume of Merck Sharp & Dohme's 23-valent pneumonia vaccine, for which Zhifei Bio is the agent, amounted to 845,000 units, a year-on-year increase of 3.83%.

According to Huaan Securities statistics, in the first half of this year, a total of 32 batches of 23-valent pneumonia vaccines were approved and issued, specifically, 11 batches of 23-valent pneumonia vaccines of Kangtai Biologicals (+22.22%), 3 batches of 23-valent pneumonia vaccines of Watson Biologicals (-62.5%), 10 batches of 23-valent pneumonia vaccines of Chengdu Research Institute (+11.11%), 2 batches of 23-valent pneumonia vaccines of Kexing Holdings (-33.33%) ), Zhifei Biological 23-valent Pneumonia Vaccine 6 batches (+100.00%).

According to the half-yearly report of Kangtai Bio 2024, its wholly-owned subsidiary Minhai Bio issued 1,369,100 doses of 23-valent pneumonia vaccine from January to June this year, up 19.25% year-on-year.

In contrast, Zhifei Bio's 160,000 doses did not occupy much market share. Against this backdrop, after only one year on the market, Zhifei Bio took the lead in proposing a price cut. Zhao Heng, founder of Latitude Health, a healthcare strategy consulting firm, pointed out to the 21st Century Business Herald that the logic of the vaccine price cut is very simple, which is to seize the market. If the latecomers want to catch up, price cuts become an option.

Price reduction is a trend

According to public information, pneumonia is an inflammatory disease of the lungs, usually caused by bacterial, viral, fungal or other microbial infections, bacterial pneumonia accounts for 80% of the human infection of pneumonia, of which Streptococcus pneumoniae is an important pathogen. Pneumonia vaccine can effectively prevent pneumonia, meningitis, septicemia and other diseases caused by Streptococcus pneumoniae, which is the most effective means of prevention.

As early as 2008, WHO has listed pneumococcal disease as a “very high priority” disease to be prevented by vaccines. By product type, pneumococcal vaccines are mainly categorized into 13-valent pneumococcal polysaccharide conjugate vaccine and 23-valent pneumococcal polysaccharide vaccine.

According to China Pneumococcal Vaccine Industry Current Situation In-depth Analysis and Future Investment Forecast Report (2024-2031), according to incomplete statistics, as of the end of 2023, the number of pneumococcal vaccines approved for marketing in China reached nine (excluding the delisted vaccines), mainly including three 13-valent pneumococcal polysaccharide conjugate vaccines (“PCV13”) and six 23-valent pneumococcal polysaccharide vaccines (“PPV23”). PPV23).

Among them, seven are domestic pneumococcal vaccines from five local companies, namely Watson Biologicals, Minhai Biologicals, Chengdu Biologicals, Kexing Biologicals, and Zhifei Green Bamboo; and two are imported vaccines from two foreign-funded companies, namely Pfizer Pharmaceuticals and Merck Sharp & Dohme. In addition, the layout of the 23-valent polysaccharide pneumonia vaccine and Aimee adhere to, Huaan Kechuang, Fosun Antekin and other enterprises.

In the first half of this year, according to the 23-valent pneumonia vaccine batch issued, Kangtai Biological accounted for 34.38%, Chengdu accounted for 31.25%, Zhifei Biological Zhifei Green Bamboo accounted for 18.75%. Although domestic vaccines have maintained a 90% share of the 23-valent pneumonia vaccine batches approved and issued in recent years, Zhifei Biologicals or any other company is also facing tremendous pressure from the market.

Beijing University of Chinese Medicine, big health law and business team leader Prof. Deng Yong recently said in an interview with the 21st Century Business Herald reporter, product price cuts is a common strategy used by companies in the market competition, the short term will help to improve product sales, for the price of more sensitive products will be able to significantly attract new customers. However, it should also be noted that after the price cuts will reduce the profitability of enterprises, if additional sales increase is not enough to make up for the loss of profits brought about by the price cuts, the overall profitability of enterprises may be negatively affected.

It is worth mentioning that in recent times, the vaccine industry has frequently played “price war”. In the first half of the year, Changchun, Wuhan, Shanghai, a subsidiary of the State Pharmaceutical Group, the quadrivalent influenza vaccine down to 88 yuan / piece, followed by Hualan Vaccine, Beijing Kexing and other private enterprises to follow up, will also be part of the quadrivalent influenza vaccine down to about 80 yuan per piece.

In addition, in the field of HPV vaccines, Wantai Biologicals, Watson Biologicals bivalent HPV vaccine has also reduced the price, has fallen below 100 yuan, of which Watson Biologicals product price reduction is 88%.

In this regard, Zhao Heng said that the vaccine industry price cuts is definitely the trend, because the source of income of vaccines is mainly for personal consumption, if there is no government subsidies, in the economic downturn, these consumer vaccines will certainly decline in sales.

“This time Zhifei biological pneumonia vaccine price drop, there is no good response to other companies, unless you can develop a new more attractive to the user of the product, otherwise you can only fight the 'price war'.” Zhao Heng said.

High market demand

According to the Global Vaccine Market Report released by WHO, the varieties with faster growth in vaccine sales in 2022 are mainly focused on MR (leprosy) vaccine, PCV (pneumonia) vaccine, and TD (tetanus-diphtheria) vaccine, with a growth rate of 68%, 28%, and 22%, respectively. the varieties with faster growth in vaccine value in 2022 are mainly focused on shingles vaccine, HPV vaccine, and PCV vaccine. The growth rate is 52%, 26% and 23%, respectively.

Currently, more than 100 countries and regions around the world have included pneumococcal vaccination in their national immunization programs, although China has not yet included it in its national immunization program.

Head Leopard Research Institute said that the deepening aging of China's population has a higher impact on the demographic structure than the impact of the lower birth rate, and the overall number of pneumococcal susceptible people has increased, and the 23-valent pneumococcal vaccine products with a longer development time continue to increase in volume, and the number of 23-valent pneumococcal polysaccharide vaccine products is expected to rise from 24,131,000 to 51,837,000 in China in 2023- 2027.

From the perspective of market scale, Xiangcai Securities pointed out that the scale of China's pneumococcal vaccine industry grew from 1.4 billion yuan in 2015 to 10.03 billion yuan in 2022, with a compound growth rate of 32%, and it is expected to reach 10.5 billion yuan in 2023, and it is expected to reach 19.2 billion yuan in 2025 and 43.8 billion yuan in 2030, which is a vast market space.

Deng Yong pointed out that, in the face of the vast market, price cuts will further increase the concentration of the vaccine market, at the same time, new entrants due to the difficulty of obtaining sufficient profits through the price, its willingness to enter the market may be inhibited. In addition, some companies can maintain lower costs through economies of scale after price cuts, thus consolidating their market position.

It should be noted that Zhifei Biological 23-valent pneumococcal polysaccharide vaccine price cuts behind, facing is actually the situation of double-digit revenue and net profit.

According to Zhifei biological financial report, the first half of the company realized revenue of 18.258 billion yuan, down 25.31% year-on-year; net profit of 2.234 billion yuan, down 47.55% year-on-year; deducted net profit of 2.230 billion yuan, a year-on-year decline of 47.04%; net cash flow from operating activities was -307 million yuan, compared with 2.177 billion yuan in the same period of the previous year.

Zhifei Biological said that in the first half of 2024, the company's marketing in certain regions and some of its products failed to meet the expected goals, resulting in a decline in sales of major products compared with the same period last year. Zhifei Biological did not directly mention the market performance of new products, including the 23-valent pneumonia vaccine, but in the financial report it has high hopes for the 23-valent pneumonia vaccine, expecting to form a synergistic effect with other pneumonia vaccines under development.

At present, in the field of pneumonia vaccine, Zhifei Biological in addition to the 23-valent pneumococcal vaccine, there are 26-valent pneumonia conjugate vaccine into the Ⅰ / Ⅱ phase of clinical trials, as well as the 15-valent pneumonia conjugate vaccine in the clinical phase Ⅲ.

Deng Yong believes that, in the current context of fierce price competition, enterprises to dominate the market, must analyze their own product positioning is high-end, mid-range or low-end, the cost compared to the price of exactly how to choose to go on the basis of low-priced competition or price stabilization differentiation strategy. “And determine the product positioning is 'recovery of cash flow' or 'occupy strategic territory', and appropriate to make certain cuts, from a long-term perspective to adapt to this wave of price reductions, catering to the long-term development strategy of enterprises. ”

https://finance.eastmoney.com/a/202409053176447152.html