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The domestic HPV vaccine market is highly competitive. Compared with two years ago, the latest winning bid price of Watson Bio's bivalent HPV vaccine has dropped to 27.5 yuan per dose. The topic of the domestic HPV vaccine price dropping to the price of a cup of milk tea has become a hot topic.

On August 2, the Shandong Provincial Public Resources Electronic Trading Platform disclosed the Shandong Provincial Bivalent Human Papillomavirus (HPV) Vaccine Procurement (2) transaction announcement for girls of school age who will enter school in 2024. Among them, Watson Biopharma's subsidiary Zerun Biopharma won the bid for 1.0162 million doses at RMB 27.9465 million. According to estimates, the bid price for a single dose of the bivalent HPV vaccine has dropped to RMB 27.5.

Image source: Shandong Provincial Public Resources Electronic Trading Platform

At present, the HPV vaccines approved in China are divided into bivalent, quadrivalent and nonavalent vaccines. Among them, the domestically approved products are mainly bivalent, including Wantai Biological's "Xinkening" and Watson Biological's "Wozehui". In addition, the bivalent HPV vaccine also includes the imported GSK "Cervarix". The domestic market for quadrivalent and nonavalent HPV vaccines is monopolized by Merck.

For this reason, a reporter from Southern Finance and Economics contacted Wantai Bio's investor relations department as an investor. The relevant person said, "This is government procurement, and the price in our own market is still 329 (Yuan/piece)". It is reported that most of the government's purchase of bivalent HPV vaccines is a people-benefiting project, targeting young women.

“Government procurement is different from the market. Ultimately, it depends on the bids of the companies participating in the bidding. It is not based on market (rules) in the traditional sense,” the person said.

If the company participates in government procurement at 27.5 yuan per dose, will it lose money? The person said, "Compared with competitors' bivalent HPV vaccines, our company has advantages in both age groups and vaccination rates."

In 2020, Wantai Biological's bivalent HPV vaccine "Xinkening" became the first domestically produced bivalent HPV vaccine when it was launched, breaking the long-term monopoly of foreign companies in the market. Compared with the imported HPV vaccine at that time, "Xinkening" is suitable for a wider range of people, including women aged 9-45. Due to the severe shortage of imported HPV vaccines at that time, the market was in short supply, and Wantai Biological's HPV vaccine quickly filled the market space.

From a revenue scale of only around 1 billion yuan in 2019 and a net profit attributable to the parent of 209 million yuan, to joining the 10 billion yuan revenue camp in 2022, with net profit attributable to the parent jumping to 4.736 billion yuan, Wantai Biological achieved high growth in just four years, which was especially inseparable from the support of the bivalent HPV vaccine.

However, the halo of "the first domestically produced bivalent HPV vaccine" did not last long, and the "price war" surrounding similar products broke out first.

In March 2022, Watson Bio's bivalent HPV vaccine "Wo Ze Hui" was approved for marketing, becoming the second domestically produced HPV vaccine. According to public media reports, "Wo Ze Hui" has two specifications, priced at 329 yuan per pre-filled vial and 319 yuan per vial. In addition to the competition from domestically produced bivalent HPV vaccines, Wantai Bio also needs to face the attack of imported nine-valent HPV vaccines.

Since 2023, Wantai Biological's performance has declined. In 2023, its operating income was 5.511 billion yuan, a year-on-year decrease of 50.73%; its net profit was 1.248 billion yuan, a year-on-year decrease of 73.65%.

On July 11, Wantai Biological released an announcement on the expected decrease in 2024 semi-annual performance, predicting that the net profit attributable to the parent company's owners in the first half of 2024 will be 240 million to 290 million yuan, compared with 1.70 billion yuan in the same period last year, it will be a decrease of 1.46 billion to 1.41 billion yuan, a year-on-year decrease of 85.90% to 82.96%.

Part of this article is from 21st Century Business Herald (reporters Wu Yinggang and Zhu Yiyi)

(Disclaimer: The content of this article is for reference only and does not constitute investment advice. Investors act accordingly at their own risk.)