Surge in HPV Vaccine Batch Releases in First Half of 2023 Drives Chinese Listed Companies to Expand Overseas Markets

By reporters Lin-Yan Xu and Ru-Shi Li

According to data from the National Institutes for Food and Drug Control and relevant companies' semi-annual reports, in the first half of 2023, the total number of HPV vaccine batches approved for release in China reached 322, representing a year-on-year increase of 79.20%. Among them, the number of batches approved for WANTAI BioPharm's bivalent HPV vaccine was 231, marking a year-on-year increase of 65%; Walvax's bivalent HPV vaccine received approval for the release of 4.1439 million doses, reflecting a year-on-year increase of 368.42%; the number of batches approved for HPV vaccines by GSK and MSD that have been approved for sale in China also saw corresponding growth.

The growth in the batch release quantity of HPV vaccines has also driven the performance growth of related listed companies. Walvax achieved a net profit of 455 million yuan in the first half of the year, representing a year-on-year increase of 8.13%, with revenue from core vaccine sales such as HPV experiencing growth; the sales of HPV vaccines also contributed to the majority of WANTAI BioPharm's income. For the sales of HPV vaccines in the second half of the year, vaccine companies are accelerating the expansion into overseas markets.

"2023 is the first full sales year for Walvax's bivalent HPV vaccine. In the first half of the year, the company achieved impressive batch release results. Since the beginning of this year, the company's bivalent HPV vaccine product has focused on expanding the government-subsidized procurement market. Considering the approval progress of local governments, most of the winning projects in the first half of the year began shipping only in the second half. The company will actively 'prepare' for the second half to continuously expand and consolidate its advantages in government-subsidized bivalent HPV vaccine procurement projects, increasing the market coverage and penetration rate of its bivalent HPV vaccine. Meanwhile, Walvax is also actively expanding overseas sales of its bivalent HPV vaccine," a relevant responsible person from Walvax told the Securities Daily.

    HPV Vaccine Sales Are Booming

    Chinese-produced and imported vaccines compete for market share

Walvax's 2023 semi-annual report shows that the company's production of the 2-valent HPV vaccine won government procurement projects totaling 1.686 million doses in the first half of the year. According to WANTAI BioPharm's semi-annual report, the sales volume of the company’s 2-valent HPV vaccine has exceeded ten million doses during the reporting period.

"The 2-valent vaccine has a greater price advantage and better supply assurance, and it covers a wider age range of the population. Nowadays, the main growth driver of the 2-valent vaccine market is among females aged 9 to 45," Liu Lihao, Executive Director of CIC Cision Consulting, told reporters from the Securities Daily. "Based on the current batch release volume, the penetration rate of the 2-valent HPV vaccine among eligible females is still less than 10%. With continuous policy promotion, ongoing market development, and increasing personal health awareness, the market demand for the 2-valent HPV vaccine will further increase."

While the sales of bivalent vaccines are robust, it is also important to recognize the challenges posed by imported nonavalent vaccines. A relevant responsible person from Walvax Biotechnology Co., Ltd. told the *Securities Daily*: “The continuous growth in the import of nonavalent HPV vaccines will exert certain pressure on the market for domestically produced bivalent HPV vaccines among the over-30 age group. Given that the approved age range for nonavalent HPV vaccines has been extended to 45 years, the future market for bivalent HPV vaccines will likely focus more on the 9-to-30 age group.”

Chinese vaccine companies are also accelerating the development of 9-valent vaccines. Among them, the progress of 9-valent HPV vaccine development by listed companies such as WANTAI BioPharm and Walvax has been closely watched. WANTAI BioPharm stated that the Phase III clinical trial and industrial scale-up of the 9-valent HPV vaccine are proceeding smoothly. The main Phase III clinical trial is being observed and followed up according to plan, the production workshop has been completed, and research work on industrial scale-up production is currently underway.

"Currently, in China, nine-valent HPV vaccines from five Chinese manufacturers have entered Phase III clinical trials. As companies continue to improve their vaccine research, production technology, and advance through clinical trials and market approval processes, there may be a future phenomenon of a cluster of domestically produced nine-valent HPV vaccines entering the market. Relevant companies need to plan their production capacity in advance for this competitive trend because, although the batch release volume of the nine-valent HPV vaccine is increasing, there is still a problem of insufficient supply," said Liu Lihe.

    Listed Companies Accelerate Expansion into Overseas Markets

    Innovation and R&D Becomes Strategic Focus

Chinese vaccine companies are accelerating their "going global" pace. In March 2023, WANTAI BioPharm's bivalent HPV vaccine was successfully exported to Thailand; the bivalent HPV vaccine obtained market approval in Cambodia and Ethiopia. In June 2023, the company signed a Memorandum of Understanding (MoU) with Thailand’s Vaccine Institute and partner GBP for the technology transfer of the production of a 9-valent HPV vaccine. They also held in-depth discussions on future technology transfer and clinical cooperation for this vaccine, jointly promoting the technology transfer, clinical trials, and commercialization projects of the 9-valent HPV vaccine in Thailand.

In the first half of this year, Walvax Biotechnology Co., Ltd. and its Indonesian partners launched technical cooperation for the local packaging of 13-valent pneumococcal conjugate vaccine and bivalent HPV vaccine bulk in Indonesia. The preliminary training of personnel has now been completed, laying a solid foundation for subsequent localized production cooperation. Walvax stated: "After the bivalent HPV vaccine receives WHO prequalification in the future, more than half of its production capacity will be allocated to supply Gavi, the Vaccine Alliance, at an affordable price. We will fully support the Gavi 5.0 Strategic Plan, which aims to benefit 84 million females aged 9 to 14 globally, effectively enhancing the company's international influence."

"Vaccine companies can enter the international market by exporting vaccines, expand their potential customer base, increase sales volume, boost revenue, and achieve diversified income sources, thereby reducing risks through diversified income streams. Secondly, it can enhance brand value and help build a strong corporate brand image," said Liu Lihe. "In addition, this move can also benefit the company reciprocally. Collaborating with international partners can promote technical cooperation and knowledge exchange, continuously improving the R&D and production standards of vaccines."

The expansion into overseas markets also signifies that China's vaccine enterprises are beginning to compete with global giants in a broader market. In conjunction with the specific requirements of the Vaccine Administration Law, which states that "the state encourages vaccine manufacturers to produce and export vaccines in accordance with international procurement requirements," how to project China's innovative R&D capabilities, as well as its efficient and safe industrialization capacity, onto the global market has become a top priority in the development strategy of Chinese enterprises.