▲ Click on the blue above"Medical Valley"Follow usRecently, WANTAI BioPharm announced that its wholly-owned subsidiary, Xiamen Wantai Canghai Biotechnology Co., Ltd.(hereinafter referred to as"WANTAI BioPharm"AndGSKDecision to Terminate the New Generation of Cervical Cancer VaccineHPV9-AS04Development and commercialization cooperation for the candidate vaccine, both parties have already7Month20Termination letter signed on [date].
Milestone payment of 174 million yuan receivedThe announcement shows that on September 6, 2019, WANTAI BioPharm's wholly-owned subsidiary, Xiamen Wantai Biological Technology Co., Ltd. (hereinafter referred to as "Wantai Biological Technology"), signed a "Cooperation Agreement on the Development and Commercialization of a New Generation Cervical Cancer Vaccine" with GSK. The agreement stipulates that the two parties will cooperate to develop a new generation cervical cancer vaccine (hereinafter referred to as the "HPV9-AS04 candidate vaccine") based on Wantai Biological Technology’s E. coli prokaryotic expressed vaccine antigen technology and GSK’s adjuvant technology. The antigen for the HPV9-AS04 candidate vaccine will be produced in China by Wantai Biological Technology, while GSK will be responsible for the development and production of the vaccine adjuvant and the final vaccine product overseas. Both parties will conduct commercial development according to the regions specified in the "Cooperation Agreement."For specific information about this vaccine, WANTAI BioPharm has not provided detailed disclosure. Its 2023 annual report shows that the new generation of cervical cancer vaccine obtained the FDA's implied permission for clinical trials in June 2022. In August 2022, GSK officially initiated the Phase I/II clinical trial. The Phase I/II clinical trial by GSK was proceeding smoothly in 2023. Both parties will continue to carry out subsequent work in the form of cooperation according to the agreement.However, WANTAI BioPharm recently announced that after friendly negotiations, both parties decided to discontinue the development and commercialization cooperation of the HPV9-AS04 candidate vaccine under the "Cooperation Agreement." Both parties will terminate any unfulfilled commitments and cease all activities related to the vaccine (given that the Phase II clinical trial for the HPV9-AS04 candidate vaccine is currently ongoing, Beijing Wantai Biological Pharmacy Enterprise Co., Ltd. will still provide necessary assistance for clinical trials, pharmacovigilance, and quality-related work initiated by GSK prior to the agreement termination). After the termination of the "Cooperation Agreement," Beijing Wantai Biological Pharmacy Enterprise Co., Ltd. will no longer receive other milestone payments or sales royalties stipulated under the agreement.According to the announcement, GSK has paid WANTAI BioPharm two milestone payments totaling 22 million euros (of which, the first milestone payment of 11 million euros was made upon signing the "Cooperation Agreement"; the second milestone payment of 11 million euros was made after GSK completed the release of the final batch of clinical antigen materials produced in the pilot-scale antigen production facility supplied by WANTAI BioPharm), equivalent to approximately RMB 174 million. The two milestone payments will not be refunded due to the termination of the "Cooperation Agreement". The termination of the "Cooperation Agreement" will not affect the confirmed revenue of Beijing Wantai Biological Pharmacy Enterprise Co., Ltd., and will not have a material adverse impact on the company's financials.Net Profit for the First Half of the Year Expected to Decrease by Over 1.4 Billion YuanOn July 10 this year, WANTAI BioPharm released its earnings forecast for the first half of 2024. During the reporting period, the net profit attributable to the parent company's shareholders is expected to be between 240 million yuan and 290 million yuan. Compared with 1.702 billion yuan in the same period last year, it will decrease by 1.462 billion yuan to 1.412 billion yuan, representing a year-on-year decrease of 85.90% to 82.96%.Regarding the sharp decline in performance, WANTAI BioPharm stated that the main product in the vaccine sector, the bivalent HPV vaccine, has been continuously affected by the expanded age range of the nine-valent HPV vaccine, market competition, and inventory reduction, resulting in a decrease in sales revenue and profit compared to the same period last year.As the first domestically produced HPV vaccine to hit the market in China, WANTAI BioPharm's bivalent HPV vaccine, Cecolin, saw a surge in sales during its initial launch period. In 2020, revenue reached 693 million yuan, breaking through to 3 billion yuan in 2021, and skyrocketing to over 8 billion yuan in 2022. Correspondingly, WANTAI BioPharm’s total revenue increased from 2.354 billion yuan in 2020 to 11.185 billion yuan in 2022. However, by 2023, Cecolin's sales performance experienced its first significant decline since coming to market. The company's 2023 earnings forecast indicated that revenue from the Cecolin vaccine dropped by approximately 4.2 billion yuan compared to the same period last year.The expansion of Merck's nine-valent HPV vaccine is the most direct factor affecting the performance of WANTAI BioPharm. In August 2022, the applicable population of this product in China was officially expanded from women aged 16-26 to women aged 9-45, directly covering the age group applicable to WANTAI BioPharm; In January this year, Merck's nine-valent HPV vaccine also received approval from the National Medical Products Administration (NMPA) for a new two-dose vaccination schedule targeting girls aged 9-14.In addition to the market value squeeze brought by the expanded age range of the nine-valent HPV vaccine, the price war for the two-valent HPV vaccine has become increasingly fierce, forcing WANTAI BioPharm to join the price competition. In March this year, WANTAI BioPharm won the procurement project in Jiangsu Province with a 74% price reduction, offering the vaccine at 86 yuan per dose, bringing the price of the two-valent HPV vaccine below 100 yuan. In May this year, in Hainan Province's procurement project, Walvax Biotech won the bid with a price of 63 yuan per dose for 107,000 bottles, driving the vaccine price down to rock bottom.The rather intense competition in the bivalent HPV vaccine market has significantly diminished the appeal of "gold mining." At this stage, both HPV vaccine companies and the capital market are betting on the nonavalent HPV vaccine. On April 10 this year, WANTAI BioPharm announced that its nonavalent HPV vaccine had completed the specimen testing for the planned V8 visit as scheduled. The main analysis dataset has accumulated to the number of endpoint events for 12 months of persistent infection predetermined in the protocol. The company has completed unblinding and obtained preliminary results from the primary data analysis. The company stated that the main results met expectations and it is simultaneously working on drafting the documentation for the new drug registration application. It will also actively communicate with drug regulatory authorities regarding the application process.However, WANTAI BioPharm's long-time rival, Walvax Biotechnology, is not lagging behind either. In April this year, the company stated, "The Phase III clinical trial comparing the immunogenicity of the nine-valent HPV vaccine with similar vaccines is currently in the data statistical analysis and clinical research report writing stage. Preliminary results obtained in early February showed that the vaccine has good safety and immunogenicity, with antibody seroconversion rates of 100% for four types, 99% for another four types, and 91% for one type. Subsequently, the company will advance the R&D work in an orderly manner in accordance with regulatory requirements and its business plan, actively striving to promote the clinical study of protective efficacy with the optimal strategy."In addition, the nine-valent products of Bowei Bio, Recbio, and CanSino Biologics are also in the same stage.IIIPhase.
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