mRNA Raw Material Enzymes Surge: A Single Product Generates Nearly RMB 1 Billion in Sales Within Six Months

mRNA Raw Material Enzymes Are in High Demand: This Was Almost Predictable More Than Two Years Ago.

In each dose of mRNA vaccine, more than half of the cost is attributed to the procurement of raw material enzymes. Based on the demand for COVID-19 mRNA vaccines, the global market for mRNA raw material enzymes is substantial. In 2021, the incremental revenue generated by mRNA vaccines for the three major mRNA players exceeded $50 billion. According to estimates by Haitong Securities, nearly $3.6 billion of the 2021 mRNA vaccine revenue was spent on purchasing mRNA raw material enzymes. Among these suppliers, TriLink, a supplier to BioNTech, developed the third-generation capping technology CleanCap®, which has been applied to multiple clinical-stage mRNA vaccines, including those from BioNTech. This technology alone generated $160 million in revenue in the first two quarters of 2021.

Abroad, mRNA raw material enzymes have long been in high demand. According to incomplete statistics, Lonza, the global CDMO leader that supplies mRNA drug substance to Moderna, saw its market capitalization more than double after securing the Moderna order. Trilink and Croda, which provide enzymes and lipids to BioNTech, also experienced a surge in their stock prices as mRNA COVID-19 vaccination rates rose. The suddenly heated upstream mRNA supply chain has naturally attracted the attention of industry giants. For instance, Merck strengthened its RNA synthesis portfolio by acquiring AmpTec, while Danaher acquired plasmid manufacturer Aldevron for $9.6 billion.

Turning our attention back to China, identifying the next single product with a sufficiently large market size is a fundamental capability for every raw material manufacturer. As imported mRNA vaccines are introduced and included in clinical guidelines, blinded data from clinical trials of domestically produced mRNA vaccines are about to be unblinded, and industrialization bases for mRNA vaccines are being established across various regions, raw material manufacturers are poised for action. Suppliers such as Nanjing Vazyme Biotech Co., Ltd., Yeasen Biotechnology, Nearshore Protein, and Kactus Biosystems have ramped up their efforts, launching mRNA raw material enzyme solutions.

In other words, while people are still intensely questioning why domestically produced mRNA vaccines have yet to hit the market, a new wave of enthusiasm for life science tools has already begun.

First, let’s examine the specific utility of mRNA capping enzyme, which commands such a high unit price.

Generally, the manufacturing of mRNA vaccines can be broadly divided into three stages: preparation of DNA drug substance, preparation of mRNA drug substance, and encapsulation using lipid nanoparticles. The primary task in the first stage is to obtain plasmids with specific DNA sequences through genetic engineering. This is a relatively mature segment in terms of both technology and supply chain, with Aldevron and GenScript holding stable advantageous positions in the international and domestic DNA plasmid markets, respectively. In the second stage, the DNA within the plasmids is transcribed into mRNA, a process driven by enzymes used for mRNA synthesis. The third stage involves encapsulating the transcribed and purified mRNA to prevent degradation, primarily leveraging another hotspot in the field of nucleic acid therapeutics: delivery technology.

Among these, the second stage holds the highest value. According to statistics from Haitong Securities, under current mainstream technical pathways, the cost distribution across the three stages is 12%, 77%, and 11%, respectively. At present, a key factor in the success of mRNA vaccines lies in the stability of mRNA, which is influenced by the cap structure and the poly(A) tail. During the manufacturing process of mRNA vaccines, the transcription of DNA into mRNA—a step originally part of the central dogma of biology—is carried out in vitro through human intervention. The tools used to intervene in this biological process include environmental factors such as temperature, humidity, and pH, as well as various enzymes. If the required enzymes are further categorized, they can be divided into transcriptases and modifying enzymes. Transcriptases are used in the process of transcribing DNA into mRNA, while modifying enzymes are involved in processes such as capping modifications at the 5' end, uridine modifications, codon optimization, and polyadenylation at the 3' end. Generally, plasmids with edited base sequences are transcribed in vitro into mRNA using RNA polymerases such as T7, SP6, or T3. Since mRNA has a short half-life in vivo and exogenous mRNA can easily trigger immune responses, the use of modifying enzymes is necessary to achieve high protein expression and reduce the immunogenicity of mRNA.

Overseas, the commercial value of capping enzyme technology has been fully realized. At present, the relatively mature mRNA capping methods include co-transcriptional capping and enzymatic capping. Among them, BioNTech adopts the co-transcriptional capping method, while Moderna and Chinese mRNA vaccine manufacturers such as Abogen primarily use enzymatic capping. Due to the critical importance of capping, companies specializing in this step have achieved significant commercial success in the market where mRNA COVID-19 vaccines are already being sold, such as TriLink and AmpTec mentioned at the beginning of the article.

In China, mRNA raw material enzymes are on the eve of a market explosion.

On one hand, mRNA COVID-19 vaccines are entering the final stretch before market launch. Among the first three domestic companies to obtain clinical trial approvals for mRNA COVID-19 vaccines, Abogen Biosciences and Aim Vaccine have advanced their flagship products, ARCoV and LVRNA009, into pivotal clinical trials, with potential applications for market approval expected by late this year or early next year. By mid-April, Abogen’s ARCoV had completed participant enrollment in its overseas Phase III clinical trial, and the relevant R&D entities are awaiting data unblinding and analysis. Aim Vaccine’s LVRNA009 has entered Phase II/III clinical trials and submitted an application for sequential vaccination. As the saying goes, “provisions should precede troops,” and both companies have made ample preparations for the industrialization of mRNA technology. According to Frost & Sullivan, Aim Vaccine’s pilot plant for mRNA vaccines is among the first production facilities in China to meet GMP standards, and its under-construction mRNA vaccine production workshop is designed with an annual capacity of 400 million doses. Reportedly, Abogen Biosciences established a strategic partnership with Kaika Biotech, a leading domestic supplier of capping enzymes, as early as October 2021, to secure a long-term and stable supply of GMP-grade protease raw materials.

Beyond this, in the long campaign to secure domestic market approval for mRNA COVID-19 vaccines, emerging players and established incumbents alike—including Swabio, Fornoval, BlueJay Biotech, WisGene Biologics, CanSino Biologics, and CSPC Pharmaceutical Group—have all stepped on the gas, accelerating their race.

On the other hand, regardless of whether the clinical trials of mRNA COVID-19 vaccines are successfully completed, various companies have already begun to lay out specialized production capacity. As early as May 2021, Fosun BioNTech started building an industrialization base for mRNA COVID-19 vaccines in China, with an expected annual output of 1 billion doses; in September, Sinopharm Group's China National Biotec Group began construction of Fuhuo Jian's industrialization base in Jiading, Shanghai, aiming to create a leading domestic mRNA vaccine production workshop in terms of capacity and technology. The following month, CanSino invested 1.5 billion yuan to build an innovative vaccine R&D and production base in Lingang, Shanghai, which will be used for the research, development, and production of new vaccines including mRNA COVID-19 vaccines. More mRNA industrial bases are sprouting up across the country, which is undoubtedly seen by raw material manufacturers as a huge potential single-product market eagerly extending olive branches.

“If we only sell to small clients and the research market, we won’t be able to achieve significant volume,” a seasoned entrepreneur in the recombinant protein sector told VCBeat. In his view, although market competition has not yet reached a fever pitch, there is a consensus that recognition and orders from leading enterprises are crucial. On one hand, nearly all raw material suppliers providing enzymes are expanding their production capacity for mRNA-related enzymatic raw materials and launching a wide array of products and solutions; on the other hand, before the approval of domestically produced mRNA vaccines for market launch, only a few leading mRNA vaccine companies have released limited orders. “The market will soon become intensely competitive.”

The first to face intense competition are enterprises that already possess GMP-grade enzyme production capabilities. There are few such companies in China, but they have moved quickly to secure market share and captured the first wave of orders from major pharmaceutical manufacturers. Drawing on the experiences of Moderna and BioNTech, the former chose to outsource production to Lonza, the world’s largest CDMO, while the latter primarily ensured supply through out-licensing and establishing manufacturing facilities globally. The strategy for ensuring the supply of domestically produced mRNA COVID-19 vaccines will likely fall within these two models. In the race for mRNA vaccine manufacturer orders, beyond the long-term collaboration between Abogen Biosciences and Kacgen Biology for GMP-grade processing enzymes (mainly capping enzymes and T7 RNA polymerase), Nearshore Protein entered into a deep strategic partnership with Walvax Biotechnology in Yuxi in November 2021 for the supply of raw material enzymes for mRNA vaccine projects. Previously, Walvax Biotechnology invested RMB 280 million in Yuxi, Yunnan Province, to build an industrialization facility for mRNA COVID-19 vaccines, intended for the production of the mRNA COVID-19 vaccine jointly developed by the Academy of Military Medical Sciences, Abogen Biosciences, and Walvax Biotechnology, with a Phase I annual capacity of 120 million doses. As for which suppliers will secure the orders for mRNA raw material enzymes from other manufacturers that have already begun constructing their industrial bases, such as Stemirna Therapeutics, FanoVax, and CanSino Biologics, remains an open question for the industry.

In the CDMO sector, in August 2021, Nearshore Protein signed an agreement with Asymchem to jointly build a one-stop supply system for raw materials including mRNA in vitro transcription, capping modification, and lipid nanoparticles (LNP). Three months later, Porton Bio entered into a strategic cooperation with GenScript Biologics, with both parties announcing a strategic partnership in the research, development, and manufacturing of mRNA drugs to accelerate the R&D and commercialization of innovative therapies. In February 2022, Porton issued an announcement stating that it had received purchase orders totaling $681 million from Pfizer Ireland Pharmaceuticals, a subsidiary of Pfizer. This Irish facility is one of Pfizer’s globally deployed industrial bases for mRNA COVID-19 vaccines. Meanwhile, Asymchem saw significant revenue growth over the past year due to frequent orders for Pfizer’s oral COVID-19 drug. It is understood that during the clinical development and commercial production stages of mRNA drugs, Asymchem can provide reliable cGMP-compliant mRNA drug manufacturing services as well as cGMP-grade LNP raw materials.

Beyond securing orders, capacity expansion is underway. Although the battle to guarantee mRNA vaccine supply has not yet truly begun, raw material manufacturers have already ramped up production capacity in advance. It is understood that Nearshore Protein’s GMP-grade raw materials for in vitro synthesis and modification of mRNA have a single-batch production capacity sufficient for tens of millions of people, with an annual capacity reaching 5 billion doses. Wang Gang, founder of Kactus Biosystems, told VCBeat that on top of its existing GMP workshops and laboratories, the company’s new Shanghai Lingang Phase II GMP workshop, covering more than 10,000 square meters, is about to commence operations. “The new workshop is expected to start production in June, and Kactus will subsequently have an annual delivery capacity of several billion doses.”

Given the enormous market size of mRNA raw material enzymes, and with domestic life science tool companies having accumulated substantial capital and assets during the past two years’ boom, IVD raw material suppliers are now eager to compete head-to-head with GMP-grade enzyme manufacturers.

The first step in their cross-industry expansion was to build production capacity. It is understood that Nanjing Vazyme Biotech Co., Ltd. invested in the construction of a modern GMP-compliant facility dedicated to the production of RNA synthesis reagents, aiming to better supply raw materials for mRNA vaccines. With its mRNA raw material enzyme technology platform, the company not only secures a share of the mRNA COVID-19 vaccine market but also gains entry into future markets such as protein replacement therapy, tumor immunotherapy, and small nucleic acid drugs.

The second priority is channel development. IVD raw material manufacturers are choosing to carve out a new path. For raw material suppliers, whether they originally served the pharmaceutical industry or the IVD sector, mRNA raw material enzymes are sufficiently novel, creating a window of opportunity for new market entrants. Zhou Qihao, Vice President of Yeasen Biotechnology, told VCBeat that although transitioning from IVD to mRNA involves barriers in technology, talent, market access, and distribution channels, mRNA-related products and technologies represent a new field with limited existing technical accumulation and an even scarcer talent pool, necessitating fresh exploration. “The same applies to distribution channels; new connections must be established.” Overall, in addition to conventional academic promotion, methods such as content marketing and digital promotion have been widely adopted. For instance, Yeasen Biotechnology launched an online store. VCBeat’s observations revealed that hundreds of units of common products, such as T7 RNA polymerase and capping enzymes, were sold on the Yeasen store, demonstrating that digital marketing can be effective even in such a niche raw material sector. Meanwhile, Vazyme’s drug R&D WeChat official account has maintained rapid updates on mRNA technology, market trends, and product information since 2021, allowing the company to quickly build brand recognition in the relatively unfamiliar field of mRNA raw material enzymes.

However, crossing over from IVD to mRNA is not an easy task.

First, although it is not difficult for IVD raw material manufacturers accustomed to diversified product portfolios to develop and launch new products, the challenge lies in producing these new products under a strict GMP management system. Before the outbreak of the COVID-19 pandemic, Kactus Biosystems had been providing recombinant proteins for drug R&D to innovative pharmaceutical companies both in China and abroad. Wang Gang told VCBeat that the threshold for GMP compliance is extremely high. It is highly challenging to produce GMP-grade raw materials that meet industrial users’ requirements, satisfy regulatory filing conditions, and remain cost-competitive. Domestic companies are relatively weak in this area, but this is a mandatory hurdle to clear in order to become a supplier to leading companies. “At Kactus Biosystems, each GMP-grade enzyme requires nearly 300 supporting documents, and at least 20% of our total workforce must be allocated to the quality department to ensure proper execution,” Wang Gang stated. Quality control of key indicators for enzymes used in mRNA synthesis is crucial to the stability of downstream manufacturers’ production processes. Furthermore, as the entire industry chain gradually develops and matures, the requirements for enzymes will continue to rise.

Wang Gang pointed out that mRNA yield is influenced by multiple factors, primarily the four core elements—enzymes, templates (plasmids), magnesium ions, and NTPs—as well as auxiliary factors such as surfactants, pyrophosphatase, DTT, spermidine, and cations/anions. In practical operations, each factor has an optimal concentration, and the optimal concentrations of different factors do not simply add up. For instance, with magnesium ions and NTPs, if the magnesium ion concentration is too low, it is likely to be chelated by NTPs, reducing the amount of magnesium ions effectively available to T7 RNA polymerase and ultimately leading to low yields. Therefore, determining enzyme-related parameters requires multi-stage screening, ranging from broad high/low concentration tests for multiple factors, to medium/high/low concentration tests for key factors, followed by more refined screening. According to Wang Gang, Kaige Biotech has developed specialized mathematical models to identify the optimal buffer system, thereby enhancing the efficiency of enzyme screening.

Secondly, there is the understanding of user needs. Zhou Qihao from Yeasen Biotechnology told VCBeat that for IVD raw material manufacturers crossing over into the mRNA industry, an important transferable skill is participating in customer projects and gaining a deep understanding of them. However, although product teams at IVD raw material suppliers are accustomed to customized workflows, user preferences and requirements in specific scenarios can differ vastly across industries. In other words, transitioning from IVD to mRNA involves unavoidable learning curves in both internal operational management and external demand exploration.

In reality, within this vast market propelled by mRNA COVID-19 vaccines and validated by TriLink, there are no predetermined winners. First movers must devise strategies to fend off new entrants, while companies crossing over from other sectors face a steep learning curve in mastering the requisite knowledge. The only certainty is that, amid the fierce competition for orders of domestically produced enzymatic raw materials for mRNA COVID-19 vaccines, China’s domestic ecosystem for this new technology is being established and refined.