Abogen Biosciences Terminates mRNA Vaccine Collaboration with Walvax Biotech Amid Strategic Pipeline Restructuring

On June 25, Walvax Biotechnology Co., Ltd. announced:Walvax Biotechnology Co., Ltd. Signs "Termination Agreement" with Abogen to End Technical Development Cooperation on COVID-19 mRNA Vaccine and Shingles mRNA Vaccine; After the termination of cooperation, all parties will settle the relevant expenses for the early-stage research and development, clinical trials, etc.

This is not the first time Walvax has "cut losses" on its pipeline this year.

In April and June this year, Walvax Biotechnology Co., Ltd. respectively terminated its subsidiariesWalvax's Recombinant COVID-19 Vaccine(Chimpanzee Adenovirus Vector) Clinical, SubsidiaryWalvax Recombinant Novel Coronavirus Vaccine(CHO cells) andVariant Strain COVID-19 Vaccine(Clinical use of CHO cells).

In this way, Walvax has nearly conducted a "thorough clean-up" of its COVID-19 vaccine pipeline, and the era of five parallel COVID-19 vaccine pipelines has become history.

That said, astute observers had long foreseen:Walvax and Abogen have long been in a state of discord.

As early as 2020, Walvax had started cooperation with Abogen., however, in early 2022, when Walvax simultaneously announced its collaboration with another mRNA vaccine developer, Shanghai Rnacure Biopharma, to develop a next-generation mRNA COVID-19 vaccine, rumors about the cooperation between the two parties "falling apart" began to circulate in the market.

Walvax/Abogen's ARCoVax, developed in collaboration by Walvax Biotechnology and Abogen Biosciences, obtained clinical approval in China in June 2020. However, it has not yet received domestic approval in China, with only an emergency use authorization granted in Indonesia in September 2022.

Whether it is due to the existing cooperative pipelines falling short of expectations or internal conflicts between the two parties, the content of their cooperation has already become an empty shell, and the termination of the partnership is only awaiting an official announcement.

From the latest investor Q&A exchange of Walvax, the cooperation between Walvax and Rnacure Biopharma is still ongoing. The collaborative products include: mRNA vaccines for COVID-19 variants, mRNA vaccines for respiratory syncytial virus, and mRNA vaccines for influenza virus.

▍Walvax "Search for a Gun" Failed

Walvax could be described as "when it rains, it pours."

At that time, in order to take advantage of the opportunities presented by the COVID-19 pandemic, the company invested heavily. After 2020, Walvax's R&D expenses increased significantly from 2021 to 2023, with R&D expenses amounting to 622 million yuan, 933 million yuan, and 776 million yuan respectively. Taking 2021 as an example, Walvax spent 326 million yuan on the development of its mRNA COVID-19 vaccine, which exceeded half of its total R&D expenditure for that year. Meanwhile,To support the commercial production of mRNA vaccines, Walvax has also established a production base with an annual capacity of 200 million doses in the vaccine industrial park located in Yuxi High-tech Zone, at a cost of 520 million yuan.

In terms of COVID-19 vaccines, the only fruitful result was the mRNA vaccine for mutated strains developed in collaboration with Shanghai Rnacure Biopharma, which obtained emergency use authorization in China by the end of 2023. Unfortunately, the market had already vanished.

Walvax's fundamentals are also being tested amidst fierce competition within China.

Since 2020,Walvax's 13-valent pneumococcal vaccine is the company's primary core revenue source., with the commercial launch of the company's bivalent HPV vaccine in 2022, Walvax benefited as the second player in China to capitalize on this opportunity, driving...Walvax Achieved a Revenue Peak in 2022, Reaching 5.086 Billion Yuan, with a CARG of 31.55% from 2020 to 2022.

Unfortunately, the good times didn't last. Reviewing the 2023 batch release data, the batch release volume of the 13-valent pneumococcal vaccine decreased by 4.42% year-on-year. The company explained that this was due to factors such as a decline in the number of newborns in China and increased market competition. More critically, although the batch release volume of the bivalent HPV vaccine recorded year-on-year growth, the increase in batch release volume could not offset the revenue loss of the bivalent HPV vaccine, which was impacted by factors such as the age expansion and significant increase in imports of the nine-valent HPV vaccine, as well as substantial price reductions.

In fact, it is also understandable that Walvax is eager to integrate and expand its own pipeline.The company urgently needs new growth points to support its performance.After this round of integration and clean-up, the company has only one pipeline with significant potential in late-stage clinical trials: the 9-valent HPV vaccine. Once it finally reaches the market, it may repeat the pricing war seen with the 2-valent HPV vaccine.

Therefore,Company Desperately and at Great Expense Seeks to "Acquire" mRNA Technology, which can be considered as a positive outlook on this future mainstream technology field. The layout includes respiratory syncytial virus vaccines, influenza vaccines, shingles vaccines, etc.

▍Abogen "Injury to Zhongyong"

The situation of the other protagonist of the incident, Abogen, is also difficult to put into words.

Abogen's cumulative financing amount has reached as high as 1.1 billion US dollars, surpassing the scale of Walvax, but it has not gone down the path of "extravagance and being on the verge of bankruptcy." After the incident with Walvax, it is believed that the primary task for Abogen’s top-level shareholders may be to strengthen the management of the company's finances to prevent funds from "quietly slipping away" for various reasons.

Since the unsuccessful development of Abogen's COVID-19 vaccine ARCoVax, there has been hardly any news about the company expanding into other new pipelines.

Abogen's mRNA technology applications have two main areas: one is in the field of infectious disease prevention and control, where, apart from the COVID-19 vaccine, no new pipelines have entered clinical trials to date; the other is in the oncology field, where the only product that underwent clinical trial registration and acceptance by the Center for Drug Evaluation in 2023-2024 is ABO-2011. All other products shown to have entered clinical trials are Investigator-Initiated Trials (IIT).

Abogen's ABO2011, which has entered the clinical stage, is a lipid nanoparticle injectable encoding the cytokine IL-12 mRNA. It exerts anti-tumor activity by expressing the IL-12 protein and activating immune cells. The first clinical indication applied for is advanced solid tumors that have progressed or metastasized after systemic standard treatment.

For Abogen, focusing on the tumor vaccine field may not necessarily be a bad thing. It can both preserve cash to the greatest extent and avoid the risk of pipeline failure leading to value destruction caused by overexpansion. However, this means that the company's related products may not enter the commercialization stage for at least another five years. Moderna’s mRNA-4157 is expected to become the world's first approved mRNA tumor vaccine, with an estimated 5-6 years from entering clinical trials to reaching the market.

As time goes by,Abogen is very likely to become just another ordinary company.

▍Watching the Rise of Overseas mRNA

Overseas companies' mRNA technology is actively tackling indications other than COVID-19, with the fastest progress being made in the field of respiratory infectious diseases.

Take the mRNA technology giant Moderna as an example. Its RSV vaccine mRNA-1345 was recently approved by the FDA, becoming the third FDA-approved RSV vaccine and the first mRNA RSV vaccine, with an efficacy rate of 50% just announced.

In addition, Moderna's seasonal flu vaccine mRNA-1010 has met all immunogenicity endpoints in three Phase III clinical trials, and an application for market approval is expected to be submitted to the FDA within this year.

Building on its mature technological foundation, Moderna is also rapidly advancing its "multivalent vaccine" projects, planning to launch a "flu + COVID-19" combination vaccine by 2025, and potentially a "COVID-19 + flu + RSV" trivalent vaccine by 2026.

Tumor vaccines are also a popular choice in the current mRNA technology research and development pathway.

Merck/Moderna’s personalized cancer vaccine mRNA-4157 (V940) latest published Phase IIb study on high-risk stage III/IV melanoma patients after complete resection shows: Compared with the Keytruda control group, the combination therapy group reduced the risk of recurrence or death by 49%, and the risk of distant metastasis or death was reduced by 62%. Additionally, the combination therapy group had a higher 2.5-year recurrence-free survival rate at 74.8%, compared to 55.6% for Keytruda alone.

BioNTech/Genentech's personalized cancer vaccine BNT122 is even more "potent," targeting the "king of cancers," pancreatic cancer. According to Phase I data of BNT122 reported in *Nature*: Among 28 patients who had undergone surgery, 19 received atezolizumab post-surgery, of which 16 were subsequently administered the BNT122 vaccine. Additionally, 15 patients were later given mFOLFIRINOX (a modified four-drug chemotherapy regimen). In the 8 non-responding patients, the median recurrence-free survival (RFS) was as long as 13.4 months. This suggests that incorporating BNT122 in the treatment of postoperative pancreatic cancer patients has the potential to reduce the risk of recurrence and extend patient survival time.

mRNA giants overseas are making significant advances, while in China,Product Layout and Technology Platform: An Astonishingly Scarce Biotech, while the progress in mRNA vaccine distribution has surprisingly allowed companies like Shijiazhuang Pharmaceutical (Pharam) to take the lead in this field—a background worth pondering.

Conclusion: The "easy-money tradition" of vaccine manufacturers in China has led to long-standing problems in the industry, which has also, to a certain extent, occupied the resources for subsequent emerging Biotech companies. With the arrival of this wave of vaccine product reshuffling, it is hoped that it will elevate vaccine innovation in China to the next level.

(Source: Gazelle Society)