Back To Changchun Hi Tech Big Tree Split And Listed On The Market

Is the shadow of long life biological vaccine gone? Since 2020, the new crown pneumonia epidemic has caused the vaccine industry to go crazy again. Since 2020, many listed medical companies have taken advantage of the epidemic situation to break up the vaccine business and impact the capital market.

At present, Baike biology and Chengda biology have successfully passed the meeting on the science and technology innovation board, waiting for the registration and release of the CSRC. Hualan vaccine IPOs have been accepted by Shenzhen Stock Exchange in December 2020 and are in the stage of feedback.

If all of them are successfully listed, the vaccine industry in A-share market will usher in a large expansion.

However, the reporter of 21st century economic report has noticed that the vaccine companies preparing to be split up for listing are widely questioned by the market, and their innovation attributes are hardly optimistic. 90% of the income of Baike bio comes from varicella vaccine, Hualan vaccine mainly relies on influenza vaccine revenue, and Chengda bio relies on rabies vaccine.

The main businesses of the three vaccine enterprises are the R & D, production and sales of human vaccine products, but they are limited to traditional single vaccine products to generate revenue, and some businesses even overlap. They lack of innovative vaccine research on international frontier, among which Baike biological's business layout is the most typical.

Another "Immortality"?

Baike Biological Technology Co., Ltd., which is also called Changchun Baike Biotechnology Co., Ltd., is a holding subsidiary of Changchun hi tech, a pharmaceutical "Baima stock". Changchun hi tech holds 46.15% of the shares of Baike biotechnology.

Baike biological, Jinsai pharmaceutical, Huakang pharmaceutical and high-tech real estate are called "four carriages" of Changchun Hi-tech vaccine business, growth hormone, Chinese patent medicine and real estate. Among them, Baike biological is mainly committed to infectious disease prevention and control vaccine. At present, the company has three approved vaccine products, namely varicella vaccine, rabies vaccine and freeze-dried nasal spray influenza vaccine.

Baike bio plans to enter the scientific and technological innovation board this time. It plans to produce 20 million copies of live attenuated varicella vaccine and live attenuated herpes zoster vaccine, 6 million copies of adsorbed acellular diphtheria pertussis (three-component) combined vaccine, 10 million copies of nasal spray influenza attenuated live vaccine (liquid preparation), 3 million copies of rabies vaccine, 3 million copies of Hib vaccine and product research and development 1.681 billion yuan was raised.

Baike Bio said in the prospectus that the company has 12 vaccines under development and 2 all human monoclonal antibodies under development for infectious disease prevention and control, mainly including live attenuated herpes zoster vaccine, acellular diphtheria (three component) combined vaccine, Haemophilus influenzae type b conjugate vaccine, whole human anti rabies monoclonal antibody and whole human anti tetanus toxin monoclonal antibody Among them, 4 research projects are in clinical trial stage, and 10 research projects are in preclinical research stage.

According to the investigation by 21st century economic reporter, the business chain of Baike biological products in operation and in research is almost the same as that of Changsheng biological products which have been found to be fake.

Tracing back to the history of Baike, it is not difficult to find that Baike organism is a "clone" of the immortality cultivated by Changchun hi tech.

The predecessor of Changsheng biological, which has been forced to withdraw from the market due to vaccine counterfeiting, is the vaccine enterprise cultivated by Changchun hi tech. In August 1992, Changsheng biological (formerly Changsheng industry) was established, which is a state-owned enterprise under Changchun Gaoxin.

At the end of 2003, Gao Junfang, then vice chairman of Changchun hi tech, chairman and general manager of Changchun Changsheng, and Yatai group privatized Changsheng. The transfer price is 2.4 yuan per share.

At that time, there were several competitors who offered higher prices for the transfer, but Changchun hi tech insisted on transferring Changsheng biological control shares to Gao Junfang and Yatai group at a low price on the grounds of "feeling that others' offer is too high, which is a bit of a joke". The transfer was widely questioned by the market at that time.

With the doubt of "selling state-owned assets at a low price to realize privatization", Changsheng has been in China's vaccine market for more than a decade, and even once mastered half of China's vaccines. It has successively won many honors, such as the largest hepatitis B vaccine enterprise, the largest influenza vaccine enterprise, the second largest varicella vaccine enterprise, and the second largest rabies vaccine enterprise, and completed the backdoor listing on January 4, 2016, It was not until the east window incident of vaccine counterfeiting that the Chinese vaccine shrine fell.

It is worth noting that on the one hand, Changchun hi tech transferred its vaccine enterprises at a low price, on the other hand, it is starting a new business. In March 2004, Changchun hi tech and its holding subsidiary Baike Pharmaceutical Co., Ltd. jointly invested in the establishment of Baike Pharmaceutical Research Institute (the predecessor of Baike Biology).

In July 2006, Baike Research Institute changed its name to Changchun Baike Biotechnology Co., Ltd. In February 2010, Baike Co., Ltd. completed the joint-stock transformation and vigorously distributed the vaccine market.

The vaccine business of Baike bio, which is the same as Changsheng biological, is almost the same. What is the internal relationship between the two?

At the end of 2019, Changsheng was forced to withdraw from the market, and Baike biological Co., Ltd. was immediately split and listed. Whether it will inherit the heritage of Changsheng was not disclosed in its prospectus. The reporter of 21st century economic report also did not get the answer by calling Baike biological.

However, compared with the many "first" glory of immortals, the current revenue of Baike is obviously insufficient.

Single product breakthrough

During the latest reporting period from 2018 to 2020, the revenue of Baike bio is 1.019 billion yuan, 976 million yuan and 1.441 billion yuan respectively, and the net profit attributable to parent company is 128 million yuan, 221 million yuan and 418 million yuan respectively.

Despite the rapid growth of performance, during the reporting period, the company's main revenue was highly dependent on the production and sales of varicella vaccine. The revenue of varicella vaccine accounted for 84.96%, 97.06% and 76.83% respectively. The product structure was relatively single and the risk was high.

Baike biological said that at present, the company has three vaccine products on the market, namely, the vaccine against varicella virus, rabies virus and influenza virus.

According to the company, its live attenuated varicella vaccine has always occupied a leading position in the market. In 2020, the batch issuance of varicella vaccine accounted for 32.01%, ranking first in the market.

However, the production of rabies vaccine of the company has been suspended since the second half of 2018 due to the transformation and upgrading of production equipment and production process. Although the company's nasal influenza virus vaccine is exclusive in China, it only obtained the production approval in February 2020, and will be put on sale in the second half of 2020. Whether the market can be opened remains to be seen.

Baike biological frankly said that the internal competition pattern of varicella vaccine market is relatively fierce. At present, there are five manufacturers' products listed in the varicella vaccine market, including Baike biological. Although the company currently occupies a leading position, it does not rule out the risk of market share decline in the future; rabies vaccine (Vero cell) has a weak market competitiveness and a low market share; lyophilized nasal spray influenza vaccine is a new product on the market, and there are many existing influenza vaccine manufacturers in the market, which may face fierce competition.

In fact, from the business of the three vaccine companies to be listed, it is not difficult to find that the three main products of Baike bio are facing direct competition in the industry. Hualan vaccine is before the influenza vaccine, and Chengda is before the rabies vaccine. Among them, Hualan vaccine is the largest influenza vaccine production base in China, while Chengda bio's sales volume of rabies vaccine for human use in 2017 and 2018 ranked first in the world. The chickenpox vaccine market, which Baike bio relies on, has been competing in the Red Sea, even facing the pressure of market shrinkage.

Chickenpox vaccine is mainly for newborns and adolescents. However, in recent years, the domestic birth population has declined sharply, which may not be fundamentally changed in the short term. In the prospectus, Baike biological products can only hope to vigorously promote the two needle injection varicella vaccine, so as to expand the market.

However, with the inclusion of varicella vaccine into the local immunization program, the bid winning price of the product decreased significantly, which directly offset the market expansion effect brought by the two injection method. If it is not included in the local immunization program, the bid price (including tax price) of 100g biological varicella vaccine is 136 yuan-158 yuan / piece, and it is 62 yuan-100 yuan / piece after it is included.

Baike Bio said that if the market competition is further intensified due to the product upgrading and promotion of other competitors or the addition of new competitors, the company's market share and competitiveness may decline and the company's performance will be affected.

And the company's research projects are also questioned by the industry, lack of innovation.

Since 2000, there have been 16 innovative vaccines on the market in the world, many of which are global heavyweight vaccines. According to the US CDC, there are nearly 300 new vaccine varieties under research in the world, mainly distributed in infectious diseases and other fields, and are expanding to cancer, autoimmune diseases and other fields. For example, many heavyweight vaccine varieties, such as cancer, addictive diseases, allergic reactions, diabetes, Alzheimer's disease, HIV, hepatitis C and so on, are in the late clinical stage, and are expected to be listed in the next few years 。

In contrast, the vaccine development of Baike biological Co., Ltd. is still trapped in the prevention of traditional infectious diseases such as varicella, rabies, herpes, diphtheria, influenza, etc., and it is difficult to see a breakthrough in the short term.

Bear the shadow of bribery

Under the new crown epidemic situation in 2020, some innovative vaccine enterprises take advantage of the situation to break through. For example, Kexing biological has set up a global market with its new crown vaccine, while Baike biological is still worried about the market expansion of a single product.

The company said that the internal competition of the main product varicella vaccine market was fierce, resulting in high annual sales and promotion costs of the company, which made Baike biological step into the minefield of the pharmaceutical industry again.

Recently, the Ministry of Finance announced the results of penetrating audit on 77 pharmaceutical enterprises which started in 2019, and imposed administrative penalties on 19 pharmaceutical enterprises, including Hengrui pharmaceutical, Buchang pharmaceutical, Sanofi and other well-known pharmaceutical enterprises at home and abroad. False invoices, false meetings, false research and other means have been used by the pharmaceutical industry to make up the "sales expenses" from time to time.

In the prospectus, Baike biological disclosed the investigation of discipline violations in Jinghong, Yunnan Province. In September 2018, a number of personnel of Jinghong epidemic control center of Yunnan Province were given disciplinary sanctions for violating eight regulations of the Central Committee. Five of them were suspected of accepting Baike biological's arrangement for travel and reimbursement of travel expenses.

Baike Bio said that when the above-mentioned personnel visited the company, the company received them out of the friendship of the host, and there was no case of reimbursement of travel expenses, nor did they ask the above-mentioned personnel to seek improper interests for the company. During the reporting period, the company did not have commercial bribery violations, and was not subject to administrative or criminal penalties.

However, the 21st century economic report reporter looked at the China referee network and found that there were as many as three cases involving the bribery of CDC staff by the sales personnel of Baike biology. According to the verdict, the dealers and regional sales managers of Baike biological have repeatedly made "rebate" to the staff of CDC. In three cases of bribery, Baike biological sales staff gave kickbacks ranging from 10 yuan to 25 yuan for each varicella vaccine.

Oddly enough, in the prospectus, Baike biological did not publish any list of promotion service companies it cooperated with.

The 21st century economic report reporter noticed that the domestic vaccine market basically does not need distributors to sell, but most vaccine enterprises still have high sales costs.

At present, China's vaccine market is divided into immunization planning vaccine and non immunization planning vaccine, in which immunization program vaccine is provided to citizens free of charge by the government; non immunization program vaccine mainly includes other vaccines that citizens pay their own expenses and voluntarily receive vaccination, and such vaccines are priced independently by enterprises.

In general, immunization program vaccine is the main vaccine in China. However, no matter what kind of vaccine, the country adopts the centralized platform procurement mode, that is, the domestic sales of vaccine enterprises are basically direct sales mode. In other words, vaccine enterprises do not need distributors, only need bidding to complete sales.

Baike Bio said that the company's sales of vaccines are strictly in accordance with the above laws and regulations, and the direct sales mode is adopted for all domestic sales. Only about 0.5% of the vaccines are exported through the distribution mode.

However, under the direct sales mode, the sales expense rate of Baike biological is as high as 40% all the year round. In 2020, the sales cost of the company is 578 million yuan, including 532 million yuan of promotion fee; in 2019, the sales expense reaches 449 million yuan, of which the promotion fee is 383 million yuan; in 2018, the sales expense is 517 million yuan, and the promotion fee is 446 million yuan.

According to the prospectus, in 2020, the company has only 100 sales personnel, but the sales cost is as high as 578 million yuan, with an average of 5.78 million yuan. In 2020, the company's R & D investment is only 220 million yuan, which is only 1.88 million yuan after being allocated to 117 R & D personnel.

Where are the huge sales expenses of Baike biology?

The company disclosed that the company has commissioned more than 100 marketing service providers to carry out academic publicity and implementation to CDC and vaccination sites. The marketing activities mainly include holding academic conferences, academic promotion salons, large-scale conferences, etc., introducing the research results and product advantages of vaccine products to CDC personnel and vaccination network medical staff, answering questions to CDC personnel and vaccination network medical staff, transmitting clinical vaccination guidance information, and conducting market research and academic research, Comprehensively and thoroughly grasp the market situation.

In addition, during the reporting period, the proportion of sales expenses of Baike biological was higher than that of Kangtai biological, Watson biological and Kanghua biological industries.

In this regard, Baike Bio said that the main reason is that the promotion fee accounts for a high proportion of the operating revenue, and the specific reasons include the difference between the company's main vaccine products and comparable companies, and the company's product structure is relatively single, which can not give full play to the synergy effect of sales channels.

For vaccine products that can be sold directly by bidding, the sales cost has remained high for a long time, and the implications are thought-provoking.

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