Visual China.
Blue Whale financial reporter Wang Jianwen.
Shanghai Pharmaceutical CanSino is no longer included in the scope of CanSino's consolidated financial statements.
Founded in 2021, CanSino is the manufacturer of the first marketed adenovirus vector new crown vaccine "Keweisha" in China. However, with the adjustment of the epidemic policy, the new crown vaccine market has turned cold, and the production of CanSino has also been rumored to be suspended.
As the former parent company of Shanghai Pharmaceutical CanSino, CanSino has also fallen into huge losses. In this context, the encephalopathy vaccine has become the company's new "life-saving straw".
After two consecutive years of substantial losses, CanSino was released.
On the evening of February 2, CanSino announced that CanSino was no longer included in the company's consolidated financial statements.
Specifically, CanSino stated that the concerted actor agreement between the company and Shanghai Biomedical Industry Equity Investment Partnership (Limited Partnership) (hereinafter referred to as "Industrial Investment**") has expired, and the agreement has been automatically terminated. At this point, CanSino no longer controls more than half of the voting rights and board seats of Shanghai Pharmaceutical CanSino, and can no longer control Shanghai Pharmaceutical CanSino. Therefore, CanSino will become a shareholding company of CanSino and will no longer be included in the scope of consolidated financial statements.
In February 2021, CanSino, Shanghai Pharmaceutical's wholly-owned subsidiary, Sunway Biotech, and Industrial Investment** jointly established CanSino Shanghai. After undergoing a capital increase, CanSino holds 4980%, 3D Biotech holds 4896%, industrial investment ** holds 124%。According to the proportion of investment, CanSino and 3D Biotech each occupy 3 seats on the board of directors, while Industrial Investment** occupies 1 seat on the board of directors.
Although CanSino's shareholding ratio does not exceed 50%, at the beginning of the establishment of CanSino, CanSino signed a concerted actor agreement with Industrial Investment**, and during the initial cooperation period of 3 years, Industrial Investment** and its appointed directors need to act in concert with CanSino. As a result, CanSino is able to control more than 50% of the voting rights and more than half of the board seats of Shanghai Pharmaceutical CanSino, and has control over it, which is also included in the consolidated financial statements by CanSino.
As the manufacturer of the first marketed adenovirus vector new crown vaccine "Keweisha" in China, CanSino has also had a highlight. According to CanSino's official website, CanSino covers an area of 50 acres, with a construction area of about 50,000 square meters, and an annual production capacity of 200 million doses of new crown vaccines.
With Keweisha, CanSino's performance in 2021 is high and it has successfully turned losses into profits. However, due to the decline in the scale of the new crown vaccine market in 2022, the performance of enterprises has also declined. From 2021 to 2022, CanSino's operating income will be 430 billion yuan, 10$3.5 billion; Net profit was 191.4 billion yuan, -90.9 billion yuan.
And according to CanSino's recently released 2023 performance forecast, in 2023, the company expects a net loss of 12$6.9 billion to $149.7 billion yuan. In this regard, the company explained that this is mainly due to the decline in revenue from the new crown vaccine, the lack of capacity utilization, which led to the company's inclusion of fixed costs corresponding to excess capacity in operating costs, and the impairment loss of new crown vaccine-related inventory, prepaid accounts and long-term assets.
However, with the removal of CanSino from the consolidated statements of CanSino, the company's performance may improve. In the announcement, CanSino said that the company's long-term equity investment in Shanghai Pharmaceutical CanSino will be changed from the cost method to the equity method of accounting.
Judging from the performance of Shanghai Pharmaceutical CanSino, in 2022 and the first half of 2023, its net loss will be 08.3 billion yuan, 87.9 billion yuan. On this basis, it will no longer be included in ConSino's consolidated statements, which may have a positive impact on ConSino's profit in 2024.
In addition, with the sharp reduction of the scale of the new crown vaccine market, CanSino has gradually entered the suspension of production. As early as March 2023, there was a document stamped with the official seal of CanSino that the company would stop production in April of the same year and enter a state of "low-cost operation".
In November 2023, CanSino also said in response to investors' questions that CanSino is currently in a low-cost operation state, and CanSino is working with Shanghai Pharmaceutical to jointly develop its development direction, and will use the existing production line and production process technology to expand CMO and CDMO services, or use the technical transformation of the production line for the development and production of other products. However, the above matters are still in progress.
The stock price has shrunk by more than ninety-percent, can the brain vaccine "save the field"?
As a vaccine R&D, production and sales company, CanSino was listed on the Hong Kong Stock Exchange in 2019 and listed on the Science and Technology Innovation Board in 2020.
At the beginning of the launch in 2020, CanSino had not yet achieved commercial sales of the product, and at that time, the company's only approved Ebola virus disease vaccine, AD5-EBOV, was only available for emergency use and national reserve arrangements, and could only be used under the guidance of regulatory agencies.
In 2021, CanSino's adenovirus vector new crown vaccine "Keweisha", bivalent meningococcal vaccine "Menaixi", and quadrivalent cerebral conjugate vaccine "Manhaixin" were successively approved. At that time, as the first adenovirus vector new crown vaccine approved for marketing in China, Keweisha attracted a lot of attention, and the company's stock price also skyrocketed.
In June 2021, the share price of CanSino A-shares was close to 800 yuan at one point, and the market value exceeded 130 billion yuan. However, as of February 2**, the share price of CanSino A shares has fallen to 4991 yuan shares, and the stock price of Hong Kong stocks is only 15HK$96 shares, all of which hit a new low since listing. The company's total market value has also dropped to about 7.7 billion yuan, a decrease of more than 9% from the highest point.
In this context, the cerebral vaccine has become CanSino's "life-saving straw".
According to data from the Zhiyanzhan Industry Research Institute, the market size of China's brain flu vaccine industry in China has increased from 23 in 2016100 million yuan, an increase to 36 in 2020900 million yuan, with a compound annual growth rate of 128%。It is estimated that by 2025, the market size of China's encephalitis vaccine industry will reach 60300 million yuan, with a compound annual growth rate of 111%。
At present, in addition to CanSino, the bivalent meningococcal conjugate vaccine of Zhifei Biologics, Walvax Biologics and Luoyi Biotech has been approved for marketing in China. However, only CanSino has been approved for its quadrivalent conjugate vaccine. In the context of the continuous growth of the market scale, the sales of CanSino flu brain vaccine also continue to grow.
According to the financial report, in the first three quarters of 2023, CanSino flow brain conjugate vaccine achieved an operating income of about 37.1 billion yuan, compared to about 06.4 billion yuan, with a year-on-year increase of 47647%。
Recently, CanSino also said at the investor meeting that its quadrivalent flow brain conjugate vaccine for 4-6 years old has entered the clinical trial stage, and has completed the enrollment work so far, and is carrying out follow-up visits and sample collection as planned, and strives to submit an application for product age expansion within the year. In addition, the quadrivalent flow brain conjugate vaccine for people aged 7-59 years has been approved for clinical trials, and clinical work will be carried out within this year.
However, in the future, the competition in the quadrivalent flow brain conjugate vaccine market will intensify. At present, the quadrivalent flow brain conjugate vaccine of Minhai Biotech, Zhifei Biotech, Lanzhou Institute of Biological Products, Walvax Biotech and other companies is in the clinical trial stage, among which the products of Zhifei Biotech and Walvax Biotech have been in the phase III clinical stage. If the products of the above-mentioned companies are successfully launched, the market share of CanSino's related products may be squeezed to a certain extent.