During the influenza season, the public's demand for influenza vaccines has increased dramatically, which has prompted the vaccine business of related biopharmaceutical companies to enter an explosive period. However, for the quadrivalent flu manufacturer Kindike (688670SH), not so. In mid-July this year, Jindike, which had to temporarily stop production due to heavy rain, will have no granules in Q3 2023. Jindike, which was only issued 10 days ago, has missed the entire sales season, and the company's relevant people also admitted that "the sales in the fourth quarter must have a great impact."
The company noted that under the expectation of broad growth space in the domestic influenza vaccine market, Jindike launched a new quadrivalent influenza virus split vaccine workshop construction project at the first launch to prepare for the expansion of production. However, it has recently extended its scheduled availability from January 2024 to April 2026. From an industry perspective, the competition in the quadrivalent influenza vaccine market has quietly accelerated, and the delay in production expansion may intensify the competitive pressure. In the eyes of industry insiders, Jindike, which relies on quadrivalent influenza vaccine to walk on one leg, can only promote the listing of other products under development as soon as possible and make up for the shortcomings of product simplification is the key to breaking the situation.
The expansion plan of the fist product has been delayed, and the competition among peers has intensified
Founded in 2008, Jindike is a biopharmaceutical company focusing on the R&D, production and sales of human vaccines, headquartered in Taizhou, Jiangsu.
It is reported that the domestic influenza vaccine market is far from being fully developed. According to the data of the Central Institute for Inspection and Quarantine, the number of influenza vaccines issued in China in 2019 was 30.78 million doses, and the vaccination rate of the entire population was less than 3%, far lower than the level of developed countries.
A person in the pharmaceutical industry said that the domestic influenza vaccination rate is still at a low level, and the trend of replacing trivalent influenza vaccine with quadrivalent influenza vaccine has formed. With the active promotion of policies and the improvement of people's awareness of vaccination, the influenza vaccine market has broad room for growth.
Based on the imagination of market increment, when the company was listed and fundraised, Jindike invested 600 million yuan in the construction project of the new quadrivalent influenza virus split vaccine workshop. According to the original plan, the total investment of the project is 84.5 billion yuan, the construction period of the project is 3 years, and the original plan to reach the scheduled usable state is January 2024.
According to estimates, after the completion of construction, it will have an annual production capacity of 22.5 million copies of ** vaccine and 7.5 million copies of pediatric vaccine. Before the new production capacity was built, the production capacity of Jindike was 10 million doses.
Now, the construction project of Jindike's new quadrivalent influenza virus split vaccine workshop has been postponed to April 2026. As of the end of September 2023, the cumulative investment amount of the new quadrivalent influenza virus lysis plant project is 52.5 billion yuan, with a cumulative investment progress of 8757%。
It is close to 90% of the investment progress, why is it delayed at this time?Jindike said that in the specific implementation of the construction project of the new new quadrivalent influenza virus split vaccine workshop, the plant has been completed and the equipment has been put in place, so the progress of the use of fund-raising funds has reached more than 80%. However, because of pharmaceutical companies, production facilities will eventually be put into use, and unlike other traditional manufacturing industries, the regulatory process of pharmaceutical companies is relatively long. First of all, we need to do the verification and debugging work by ourselves, produce samples, and then apply for our supplementary declaration. The drug regulatory department (provincial bureau or national bureau) will conduct an on-site inspection, and only after passing can a supplementary application be issued, and then it can be officially commercialized. This delay is an estimate based on the actual progress and subsequent verification tests, production, including approval, and inspection, and we still estimate the time scientifically and reasonably.
In the announcement, Kindike also gave a corresponding explanation. However, the relevant news still affected the stock price on December 26, when Jindike fell to a record low of 27 yuan and closed at 2766 yuan, a single-day decline of 1005%。December 27 continued to fall, but December 28 ushered in **.
From the perspective of the industry, the competition in the quadrivalent influenza vaccine market has quietly accelerated. As of June 15, 2023, there are quadrivalent influenza virus split vaccines from Hualan Vaccine, Jindike, Changchun Institute, Sinovac Biotech, Shanghai Institute, Guoguang Biotechnology and other companies in China 300122SZ), Chengda Biotechnology, Tianyuan Biotechnology, Kangrun Biotechnology, Kangtai Biology and other companies have progressed to the third phase of clinical trials.
As of the end of 2022, the construction project of Jindike's new quadrivalent influenza virus split vaccine workshop has been put into 8563%, and the progress in the first half of this year was 8732%, which shows that the investment progress of the project tends to be slow. So will the delay in capacity expansion affect the company's market share?The above-mentioned person only said that now many manufacturers have entered the influenza vaccine market, and we will try to speed up the progress within the expected time to achieve an official production of the new workshop.
However, Jindike said in an interview that in the stage of influenza vaccination from the beginning to the growth, the number of industry entrants has increased, and there may be a game in the sales at a certain point in the local area, but on the whole, the increase in participants will be more conducive to expanding the market, especially the incremental customer incremental market, so the company has always believed that the influenza vaccine at this stage is not a stock game, but incremental competition, and there is no risk of price reduction in the short term. At the same time, due to the low level of free vaccination of key groups in fiscal procurement, if the proportion of this part of sales increases in the future, the weighted average may move downward, which is caused by structural changes rather than competitive reasons.
The fist products were once discontinued due to heavy rain, and the peak season was not prosperous
In addition to the delay in the construction of new production capacity, Jindike's challenges are far more than that.
As we all know, for the northern hemisphere where China is located, the influenza season refers to the period of high incidence of influenza virus epidemic every year, mainly from September to May of the following year. The corresponding sales cycle of influenza vaccine in the current season is from August to June of the following year, the peak sales season is concentrated in September to December, and the sales off-season is from January to June of the following year. Influenza vaccine enterprises organize production at the end of February or early March each year after receiving the strains that may be prevalent in the current influenza season of WHO**, and mainly produce products in the first half of the year, and after production, inspection and batch issuance, the products generally begin to be sold in August of that year. Therefore, the operating performance of the main influenza vaccine enterprises also showed obvious seasonal fluctuations, that is, the performance was mainly reflected in the second half of the year.
Judging from the performance of Jindik, there is an abnormality. The data shows that in Q3 2023, Jindike will achieve revenue of -62990,000 yuan, a year-on-year decrease of 10309%;Net profit attributable to the parent company in the quarter was -4615810,000 yuan, a year-on-year decrease of 16334%。
Yu Jun, chairman of Jindike, mentioned at the third quarter results briefing held on November 27 that "the company's influenza vaccine workshop was temporarily suspended, resulting in a delay in the launch and sale of products in the new flu season, and zero sales in the third quarter."
It is reported that in July this year, there was a heavy rainstorm in Taizhou City, Jiangsu Province, where Jindike is located, the company's plant was flooded, and the production links of some workshops were affected by water seepage, and the influenza vaccine workshop stopped production on July 15.
The Q3 quarter was "no revenue", which dragged down the overall performance of the first three quarters. The financial report shows that in the first three quarters of this year, Jindike's operating income fell by 45% year-on-year16% to 12.1 billion yuan, and the net profit attributable to the parent decreased by 11992%, a loss of 1107710,000 yuan. In the first half of this year, Jindike's net profit attributable to the parent was still 350810,000 yuan.
At the beginning of November, Jindik finally ushered in good news. The influenza vaccine workshop, which has been temporarily suspended, has resumed the formal production of quadrivalent influenza vaccine, and the newly produced products have been submitted to the "China Institute for Food and Drug Control" (CADC) for batch issuance.
On December 20, Jindike announced that the company has a total of 8 batches of quadrivalent influenza vaccines for the 2023-2024 influenza season that have been issued by the Central Institute for Inspection and Inspection and can be marketed. It is reported that the issuance date is from December 18, 2023 to December 24, 2023.
If it is counted from the suspension of production this year, Jindike has almost no products sold to the outside world in the second half of the year. Towards the end of the year, the sales "pass" was obtained. A person related to Jindike said frankly, "In this case, it will definitely have a great impact on sales in the fourth quarter." The person said that when we issued a temporary suspension of production announcement in July, we mentioned that the temporary suspension of production will cause the product to be put on sale later than in previous years, and it is expected that it will be difficult to go on sale in September when the 2023-2024 flu season officially starts, which will have an adverse impact on the company's operating performance.
Bai Wenxi, chief economist of IPG China, believes that if Jindike, which relies on a single quadrivalent influenza virus split vaccine, cannot achieve a breakthrough in the short term, both product cycle risk and enterprise operation risk will be high. Therefore, how to broaden the product line and revenue** as soon as possible, and resolve the over-reliance on a single product is a problem that Jindike needs to face.
As of the first half of this year, Jindike lyophilized human rabies vaccine (vero cell) has completed phase III clinical trials, quadrivalent influenza virus split vaccine (children) has completed phase I clinical trials, 23-valent pneumococcal polysaccharide vaccine, quadrivalent influenza virus split vaccine (high dose), freeze-dried live attenuated varicella vaccine, freeze-dried live attenuated herpes zoster vaccine, 13-valent pneumococcal polysaccharide conjugate vaccine, recombinant herpes zoster vaccine, Lyophilized human rabies vaccine (MRC-5 cells) is in the preclinical research stage. As of the end of September, the investment progress of Jindike's innovative vaccine research and development project was only 2528%。
Is there an expectation of a timeline for the commercialization of an ongoing project?A relevant person from Jindike said that in the first two years, due to the impact of the new crown epidemic, clinical practice has been greatly affected. In the future, we will speed up this progress, and we will also disclose it through announcements and other forms when it comes to some key node periods. (This article was first published in Titanium**app, author|.)Liu Fengru).