CanSino Biologics Surges Over 120% on STAR Market Debut with $15B Valuation as Overseas Phase III Trials of Its COVID-19 Vaccine Begin
VCBeat (WeChat ID: vcbeat) has learned that on August 13, 2020, CanSinoBIO (hereinafter referred to as “CanSino”) was listed on the STAR Market of the Shanghai Stock Exchange, with the stock abbreviation “CanSinoBIO” and the stock code “688185.” Previously, CanSino had already been listed on the Hong Kong Stock Exchange.
CanSinoBIO issued a total of 24.8 million shares in this listing, with an issue price of RMB 209.71 per share, raising approximately RMB 5.201 billion in total funds, far exceeding the originally planned fundraising amount of RMB 1 billion. This morning, CanSinoBIO opened at RMB 470 per share, and the current share price is RMB 466, representing a 122.21% increase. As of yesterday (August 12), the share price of CanSinoBIO on the Hong Kong Stock Exchange had risen from RMB 58.95 per share at the beginning of the year to RMB 207.8 per share, marking a 252.5% increase.
Image source: Sina Finance
CanSinoBIO listed on the STAR Market under the fifth set of listing criteria, with an estimated market capitalization of no less than RMB 4 billion and currently operating at a loss; its sponsoring institution is CITIC Securities Investment Co., Ltd.
CanSinoBIO, established in 2009, is an innovative vaccine company dedicated to the research and development, manufacturing, and commercialization of vaccines that meet both Chinese and international standards. Under the leadership of its management team, the company has advanced the development of a series of innovative vaccines, with a pipeline covering multiple high-demand indications including meningitis, Ebola virus disease, diphtheria-tetanus-pertussis (DTP), pneumonia, tuberculosis, coronavirus disease 2019 (COVID-19), and herpes zoster.
The company’s founders and management team are all veterans of the vaccine industry. The founding team consists of Xuefeng Yu, former Global Director of Bacterial Vaccine Development at Sanofi Pasteur; Tao Zhu, former Senior Scientist at Sanofi Pasteur; Dongxu Qiu, former General Manager of ChinaBio LLC; and Huihua Mao, one of China’s first PhDs in biological sciences. In 2008, they decided to return to China together to start a business, and a year later, they registered and established CanSinoBIO in Tianjin, China.
In 2018, Shoubai Chao, former Senior Vice President at AstraZeneca responsible for global vaccine and antibody technology and industrialized production, joined CanSinoBIO as Chief Operating Officer (COO), becoming the fifth core executive. Shoubai Chao is married to Huihua Mao, one of the company’s original founders.
These five core executives collectively possess many years of vaccine R&D experience, spanning multiple domains including research and development, manufacturing, and management. This has laid a solid foundation for CanSinoBIO’s widely recognized COVID-19 vaccine development earlier this year.
In fact, as early as 2017, CanSinoBIO gained widespread recognition for its Ebola virus vaccine. In 2014, West Africa experienced the most severe Ebola outbreak in history, claiming at least 11,300 lives. The World Health Organization listed Ebola as one of the diseases posing the greatest threat to human health. CanSinoBIO swiftly collaborated with the Institute of Biotechnology, Academy of Military Medical Sciences, to develop the Ad5-EBOV Ebola vaccine.
Subsequently, the clinical trial application was submitted in January 2015, and clinical approval was granted on February 13. The formal marketing authorization application was filed in April 2017, with the New Drug Certificate and drug approval number obtained in October. The speed of development and approval was unprecedented.
This is also the third Ebola vaccine globally and the first in Asia to enter human clinical trials. Furthermore, CanSinoBIO pioneered a lyophilized (freeze-dried) vaccine formulation that remains stable for over two weeks at room temperature, making it suitable for use in tropical regions of West Africa. It also possesses the technical conditions for large-scale production, meeting the urgent needs of Ebola epidemic prevention and control.
CanSinoBIO thus rose to prominence.
When faced with another sudden public health emergency, CanSinoBIO took the lead during the outbreak of the COVID-19 pandemic in early 2020. Leveraging its extensive expertise in vaccine research and development, CanSinoBIO collaborated with Professor Chen Wei’s team at the Institute of Biotechnology, Academy of Military Medical Sciences, Chinese Academy of Military Medical Sciences, to jointly develop the recombinant novel coronavirus vaccine (adenovirus vector), Ad5-nCoV. Constructed using genetic engineering techniques, this vaccine utilizes a replication-deficient human adenovirus type 5 (Ad5) as a vector to express the SARS-CoV-2 spike (S) antigen, and is intended for the prevention of diseases caused by novel coronavirus infection.
Recently, in recognition of the outstanding contributions made by exemplary figures in the fight against the COVID-19 pandemic, Chen Wei was awarded the national honorary title of “People’s Hero.”
It is reported that this COVID-19 vaccine is the first adenovirus vector vaccine in China to enter Phase I clinical trials. CanSinoBIO obtained domestic Phase I and Phase II clinical trial data in April and June 2020, respectively.
Chairman Yu Xuefeng recently outlined the follow-up R&D plans for the COVID-19 vaccine at the Hillhouse Hcare Global Industry Summit, stating, “Phase III clinical trials are large-scale efficacy studies involving broad populations, and China does not currently meet the necessary conditions. We are actively coordinating with multiple countries and preparing to launch clinical trials in high-incidence regions.”
In July this year, CanSinoBIO stated in an external interview that it was in negotiations with Russia, Brazil, Chile, Saudi Arabia, and other countries to initiate Phase III clinical trials of Ad5-nCoV. A month later, good news came in succession.
On August 9, the Saudi Ministry of Health announced a collaboration with CanSinoBIO to conduct Phase III clinical trials of its adenovirus vector vaccine. On August 11, the Mexican Ministry of Foreign Affairs also announced that it would carry out Phase III clinical trials on vaccines developed by CanSinoBIO and Walvax Biotechnology.
The overseas clinical trials of Ad5-nCoV have accelerated. Although Phase III clinical trials have not yet been initiated in China, CanSinoBIO obtained approval for military-specific drug use from the Health Bureau of the Logistics Support Department of the Central Military Commission on June 25, 2020, with a validity period of one year. At this stage, Ad5-nCoV is restricted to internal use within the military and its administration must not be expanded without the approval of the Logistics Support Department of the Central Military Commission.
In addition to the two well-known vaccines mentioned above, CanSinoBIO has submitted New Drug Applications (NDAs) for two meningococcal vaccine products, which have been accepted for review. Its diphtheria-tetanus-pertussis (DTP) vaccine, pneumococcal vaccine, and tuberculosis vaccine have all entered clinical trial phases.
CanSinoBIO conducts vaccine R&D for diseases with high clinical vaccination demand in the current market, focusing on three major disease areas: meningitis, diphtheria-tetanus-pertussis (DTP), and pneumococcal diseases, while strategically positioning itself to develop vaccines for multiple indications. The company has established an R&D platform centered on core technologies including polysaccharide-protein conjugation, recombinant proteins, adenovirus vectors, and biologics, enabling the manufacturing of multivalent recombinant protein/polysaccharide vaccines using adenovirus vectors.
CanSinoBIO currently has a total of 16 vaccine candidates in development. Among these, the Ebola virus vaccine has obtained a New Drug Certificate, and the meningococcal vaccines MCV4 and MCV2 have had their new drug registration applications submitted and accepted; the remaining 14 vaccine candidates are still in the early stages of clinical research.
CanSinoBIO Vaccine R&D Progress
According to the prospectus, CanSinoBIO’s R&D expenditures from 2017 to 2019 were RMB 68.10 million, RMB 113.3798 million, and RMB 151.7459 million, respectively. The year-on-year increase in R&D spending was closely related to the advancement of multiple vaccine candidates into clinical trials.
Among these, CanSinoBIO has been gradually increasing its R&D investment in its clinical-stage PBPV and PCV13i pneumococcal vaccines, as well as its DTaP vaccine combination, with funding rising by more than two to four times. Most of these two categories of vaccine products are in the Phase I clinical trial stage, and enrollment for Phase I trials will commence after the end of the COVID-19 pandemic.
For established vaccine products, such as the Ebola virus vaccine that has received a New Drug Certificate, and the two meningitis vaccines for which New Drug Applications (NDAs) have been submitted and accepted, capital investment has stabilized. The meningitis vaccines MCV2 and MCV4 are planned for commercial market launch following NDA approval.
Development of the COVID-19 vaccine began in 2020, and the funding invested has not yet been recorded.
CanSinoBIO Vaccine R&D Investment Ratio
Financial data publicly disclosed by CanSinoBIO indicates that R&D expenses gradually increased from 2017 to 2019, while operating profit experienced negative growth. In 2019, the net loss amounted to RMB 156 million, representing a 14.43% increase compared with 2018 and a 143.26% increase compared with 2017.
Selected Financial Data of CanSinoBIO
The company’s core products, the Ebola vaccine and meningitis vaccine, have completed clinical trials, with the meningitis vaccine poised for market launch. The Ebola vaccine is designated solely for emergency use and future national stockpiling, to be administered only under regulatory guidance, and will not constitute a primary revenue source for the company.
Currently, CanSinoBIO’s primary revenue streams are derived from the sale of vaccine components and services for toxin protein synthesis and in vivo research. The company’s main customers are VaxYnethic S.r.l. and Suzhou Keymed Biosciences Inc. According to prospectus data, CanSinoBIO reported revenues of RMB 187,200 in 2017, RMB 2.8119 million in 2018, and RMB 2.2834 million in 2020.
Of CanSinoBIO’s remaining 14 vaccine candidates in development, six are in preclinical studies and the other eight are in clinical trials. With its R&D technologies maturing, the company will strategically allocate R&D funding based on development progress.
According to the prospectus, the funds raised by CanSinoBIO’s IPO will be primarily used for the construction of Phase II of its production base, research and development of vaccines in the pipeline, replenishment of working capital, and the establishment of vaccine traceability, cold-chain logistics systems, and information systems.
The proceeds from this fundraising round are primarily allocated to four vaccine candidates under development: the pneumococcal vaccines PCV13i and PBPV, and the diphtheria-tetanus-pertussis (DTP) vaccines DTcP and DTcP-Hib. According to the R&D plan, these four vaccine products are expected to enter Phase III clinical trials in 2022 and 2023.
To align with the marketing and sales of its vaccine products under development, CanSinoBIO plans to invest RMB 550 million in a three-year Phase II construction project at its existing production facility. Building on its current production technologies, the company will procure advanced production, testing, and utility equipment, and expand its production and R&D workforce to ensure the safety and efficacy of its vaccine products.
In addition to production support, data from CanSinoBIO’s prospectus indicates that the company also plans to invest RMB 50 million in vaccine traceability, cold-chain logistics systems, and information system development. CanSinoBIO will integrate with regional vaccine cold-chain management to strictly ensure product quality during storage and transportation. Meanwhile, it will establish a fully informatized circulation process ranging from front-end design to warehousing and logistics, thereby achieving synchronization of the company’s logistics, capital flows, and information flows.
Allocation of Funding for Vaccines Under Development
The pneumococcal vaccines PBPV and PCV13i received clinical trial approval in 2019. The DTcP vaccine initiated Phase I clinical trials in 2019 and will be the first to advance into Phase III clinical trials. Building on the DTcP vaccine, the DTcP-Hib combination vaccine is formulated by combining it with the Hib monovalent vaccine, providing simultaneous protection against infectious diseases caused by diphtheria, tetanus, pertussis, and invasive Haemophilus influenzae type b (Hib). This combination vaccine is currently in the preclinical research stage. Although its development progress is slightly slower than that of the other three vaccine products, both the DTcP vaccine and the Hib conjugate vaccine have achieved relatively high batch release volumes within the industry, indicating significant market potential.
In the past six months alone, CanSinoBIO’s share price on the Hong Kong Stock Exchange has surged by more than 250%. Investors’ greatest expectation for CanSinoBIO at present is the market launch of its COVID-19 vaccine product, which will significantly improve the company’s current operational performance.