On March 28, Amy Vaccine released its 2023 performance report. In terms of performance, affected by significant changes in the COVID-19 pandemic, the company, in combination with R&D progress, market environment changes, and sales forecasts, and other comprehensive factors, made impairment provisions for intangible assets and goodwill formed by the acquisition of its subsidiary Zhuhai lifanda Biotechnology Co., Ltd, as well as the continuous progress of the company's various R&D pipelines, leading to an increase in R&D expenses in 2023. The above reasons resulted in performance losses. However, in the view of analysts, this does not mean a bearish signal. Amy sheds its burden and starts lightly, and with the subsequent launch of several blockbuster new products, it is expected to usher in a significant increase in performance.

A Dense Application of Blockbuster New Products, High R&D Investment Ushers in Fruitful Results

In 2023, Amy Vaccine's R&D expenses exceeded 636 million yuan, a 27.2% increase compared to 2022, demonstrating the company's determination to win the future.

Entering 2024, the three blockbuster iterative vaccines, including the 13-valent pneumococcal conjugate vaccine, serum-free iterative rabies vaccine, and 23-valent pneumococcal polysaccharide vaccine developed by the company, are expected to complete the application for market launch, with another 7 products applying for clinical trials. Blockbuster iterative vaccines such as the quadrivalent MDCK influenza vaccine, novel process high-efficacy human diploid cell rabies vaccine, and 20-valent pneumococcal conjugate vaccine have all submitted clinical trial pre-applications. The market opportunities for these blockbuster single-item products support the expectation of Amy's performance growth.

Just looking at the 13-valent pneumococcal conjugate vaccine and serum-free iterative rabies vaccine, which are expected to complete the application for market launch within this year, previous business cases have shown that the 13-valent pneumococcal conjugate vaccine has achieved considerable commercial success, with Pfizer's sales of this single vaccine exceeding $6 billion annually. Industry consultant China Insights Consultancy (CIC) estimates that the market size in China is expected to exceed 20 billion yuan by 2030, with huge market potential. Currently, the penetration rate of the 13-valent pneumococcal conjugate vaccine in the approved age group in China is estimated to be 25.9%, still with significant market space. At the same time, the global gap for the 13-valent pneumococcal conjugate vaccine is as high as 180 million doses per year. Therefore, after the launch of Amy's 13-valent pneumococcal conjugate vaccine, Amy is expected to become an important supplier.

The blockbuster single-item product serum-free iterative rabies vaccine developed by Amy, is a complete iterative upgrade compared to the Vero cell rabies vaccine and human diploid cell rabies vaccine currently containing serum. Its competitive advantage lies in the clinical trial's verification of the product's good safety.

Animal serum residue in vaccine products is one of the important factors causing adverse reactions such as allergies in the vaccinated population, and the serum-free iterative rabies vaccine developed by Amy Vaccine does not contain animal serum, which can improve safety and reduce the probability of adverse reactions. At the same time, so far, there has been no serum-free rabies vaccine approved and launched on the global market.

According to the company's performance conference, the current market price for human diploid cell rabies vaccine is 1500 yuan per person, and as a higher-end product than the human diploid cell rabies vaccine, the company's serum-free iterative rabies vaccine is more than 1500 yuan per person at least, and it is expected to be mainly promoted in first- and second-tier cities.

At present, Amy Vaccine has completed the construction of a serum-free iterative rabies vaccine workshop with production capacity that meets international standards, which also shows that the company has the production capacity for large-scale industrialization.

Leading Multiple Golden Tracks, the mRNA Platform Has a Solid Foundation for Rapid R&D and Registration of New Products

The change worth highly focusing on at this stage is that after the public health education during the COVID-19 pandemic phase, the public's awareness of vaccine prevention and vaccination in China has significantly increased. The development of China's vaccine industry is facing an unprecedented market opportunity, and when such opportunities occur, whether the relevant companies have sufficient understanding and also match the related resource reserves is the key to testing whether the company can lead the industry.

Looking at the development history of international vaccine giants, laying out iterative and upgraded products is one of the core business decisions for vaccine companies to stand invincible. Amy, aspiring to be a global vaccine leader, has achieved advanced layout. According to the performance announcement, Amy Vaccine has completed the iterative and upgraded layout on both the pneumonia vaccine and rabies vaccine, two golden tracks, and is promoting R&D according to the established strategy.

Pneumonia vaccine series, the 13-valent pneumococcal conjugate vaccine has completed the on-site work of Phase III clinical trials and has submitted a pre-application for market launch; the 23-valent pneumococcal polysaccharide vaccine has also completed Phase III clinical trials and is expected to apply for registration and market launch within 2024; the 20-valent pneumococcal conjugate vaccine has submitted a clinical trial pre-application; the globally synchronized first researched 24-valent pneumococcal conjugate vaccine has completed pre-clinical research work.

Rabies vaccine series, the on-site work of the Phase III clinical trials for the serum-free iterative rabies vaccine has been completed, and various preparations before the new drug application for market launch are underway, with plans to complete the application and market launch in 2024; the novel process high-efficacy human diploid cell rabies vaccine has submitted a clinical trial application; the mRNA iterative rabies vaccine is the first non-COVID mRNA vaccine product accepted domestically.

On the two golden tracks of pneumonia vaccines and rabies vaccines, it is very rare for a company like Amy to fully rely on its own independent innovation technology platform to achieve product iteration and upgrading.

It is worth noting that Amy's mRNA technology platform has been verified by tens of thousands of clinical trial data, enabling it to rapidly advance the R&D and registration of a series of mRNA vaccine products on this basis.

The annual report disclosed that the company will further focus on the key technologies of the mRNA platform in the future, and continue to promote product innovation on this basis, focusing on unmet clinical needs in core disease areas, and further enhancing the company's innovation capabilities, core competitiveness, and comprehensive strength.

The mRNA iterative rabies vaccine developed by Amy has the characteristics of significantly fewer immunization injections, significantly faster production of protective neutralizing antibodies, and significantly enhanced comprehensive protective effects compared to traditional rabies vaccines cultured through virus cultivation.

In addition, the mRNA RSV vaccine and mRNA shingles vaccine developed by Amy are global blockbuster vaccines. Pfizer and GSK's RSV vaccines were approved and launched in May 2023, with sales of $2.46 billion in 2023, and GSK's shingles vaccine had sales of $4.37 billion in 2023. Amy's this two products are expected to complete clinical trial applications in 2024.

Furthermore, according to the performance announcement, the company is using AI for the design of vaccine antigen structures and mRNA sequences, and trying to use AI to assist in vaccine process R&D work, hoping to increase the depth of existing applications and expand the application in clinical trial data analysis in the later stage.

Amy Vaccine is accelerating the implementation of a series of international layouts, and has made comprehensive preparations in overseas market launching permits, product R&D, production, etc. The company's vaccine products have opened the door to the global market, and the rabies vaccine has obtained registration permits from countries such as Pakistan.

Looking forward, as Amy Vaccine stated at the end of last year's Investor Open Day, "Now the top ten global vaccine products, Amy Vaccine has R&D in all and they are in different clinical stages. This kind of layout has never been seen in the history of China's vaccine industry. It is a grand opening and a path of great strides, requiring endurance of short-term loneliness and the ability to endure." It is believed that with the successive launch of new products, Amy Vaccine's performance will usher in new strong growth points.