NEWS
Vaccine Titan AIM is listed on the Hong Kong Stock Exchange
In the landscape of healthcare industry in China, Jiangsu Hengrui stands out as an example of privately owned pharmaceutical companies while Mindray as an example of privately owned medical device companies. However, there is currently no absolute leader among listed vaccine companies.
One day later (October 6th), the missing piece of the landscape will be added by the listing of AIM Vaccine.
AIM Vaccine submitted an application for listing to the Hong Kong Stock Exchange in this April. According to the 2021 batch issuance volume (COVID-19 vaccines excluded), AIM Vaccine is the second largest vaccine company in China, only second to Sino Biopharm.
In other words, this makes AIM Vaccine the largest privately owned vaccine enterprise in China. According to Global Unicorn Index 2021 released by Hurun Research Institute at the end of 2021, AIM Vaccine ranks first in valuation among Chinese biopharmaceutical unicorns with an estimated valuation over RMB 30b.
The Vaccine Leader Enters HK List with Promising Prospects
On October 5th, AIM vaccine closed its global sale of shares. A total of 9.714 million H shares were sold globally, with 10% in Hong Kong and 90% abroad including an additional 15% over-allotment option. The offering price was HKD 16.16 per share, with a minimum subscription of 200 shares per lot. AIM Vaccine received massive subscriptions from investors worldwide.
At 9pm on October 6th (Hong Kong time), AIM Vaccine's H shares will be traded on HKSE.
AIM Vaccine would impress the investors by its huge entity and COVID-19 vaccine. These two key words also reflect the core competencies of AIM Vaccine to some extent.
In terms of company size, AIM Vaccine is a phenomenal presence in China's vaccine industry. Since its foundation in 2011, the company has been expanding aggressively through mergers and acquisitions of companies such as AIM Hanxin, AIM Kanghuai, AIM Weixin, Rong'an Bio and Liverna. The expansion has not only enriched the portfolio of AIM Vaccine but also strengthened its technology platform.
In terms of product, AIM Vaccine currently has 8 commercial vaccine products available in Chinese market targeting 6 diseases including rabies, HBV, HAV, mumps, HFRS and meningococcal infection), among which AMI Vaccine has established an absolute dominance in HBV and rabies vaccine products.
According to the batch issuance volume in 2021, AIM Vaccine's HBV and rabies vaccines have taken 45.4% and 18.1% of China’s market share respectively. It is the largest supplier of HBV vaccine at home and abroad and the second-largest manufacturer of human rabies vaccine domestically and globally.
These two products have built a strong foundation for AIM Vaccine and are also the source of confidence for its continuous innovation.
In terms of financial data, AIM Vaccine reported RMB 120m and RMB 400m in 2019 and 2020 respectively. Although a loss of net profit was reported in 2021, if one-time share payments and significantly increased R&D expenses were excluded, the profit in 2021 should be RMB 427m with a year-on-year increase rate of 6.6%. During the aforementioned reporting period, the company's gross margin was 77.0%, 82.7% and 82.5% respectively.
Despite its impressive achievements, AIM Vaccine has always been a low-key presence because its vaccine products are not directly targeted at consumers. It wasn't until the pandemic outbreak that AIM Vaccine suddenly gained attention due to its COVID-19 mRNA vaccine.
In August 2022, AIM Vaccine released Phase II data for its self-developed COVID-19 mRNA vaccine, LVRNA009.
This means that AIM Vaccine is now among China's top tier mRNA vaccine companies and the outcomes are significantly better than its competitors.
Judging from the released data, the development of AIM Vaccine’s COVID-19 mRNA vaccine reflects more of the company's adaptability to new technologies, which is based on its solid foundation of technology innovation platform.
According to China Insights Consultancy, AIM Vaccine is the only Chinese vaccine company that has all five validated human vaccine platform technologies globally, including bacterial vaccine platform technologies, viral vaccine platform technologies, genetic engineering vaccine platform technologies, conjunctive vaccine platform technologies and mRNA vaccine platform technologies. Moreover, AIM Vaccine has at least one approved product or a clinical-stage candidate in pipeline under each of these platforms, which means that these technology platforms are actually in operation and can lead to potential revenue for the company.
On this basis, AIM Vaccine is now propelling its development of new vaccine products in multiple areas.
Judging from its portfolio, AIM Vaccine has 22 innovative vaccines under development as targeted at 13 diseases. Among them, three candidates (COVID-19 mRNA vaccine, 13-valent pneumococcal conjugate vaccine and 23-valent pneumococcal polysaccharide vaccine) are in critical Phase III clinical trials and are about to harvest in the near future.
In the short term, the 13-valent pneumococcal conjugate vaccine is worthy of notice among the aforementioned three candidates. As a worldwide blockbuster vaccine product, the 13-valent pneumococcal conjugate vaccine of Walvax achieved a revenue of RMB 1.658b in its first year of launch in China’s market.
Moreover, Pfizer, Walvax and BioKangtai are the only three suppliers of PCV13 in China and there is still a great shortness in supply. According to reports from China Insights Consultancy, the market size of PCV vaccines in China will reach RMB 43.8b by 2030.
According to AIM Vaccine’s IPO prospectus, the company plans to recruit about 3,000 subjects for Phase III clinical trial. If everything goes as planned, AIM Vaccine is expected to submit a new drug application to NMPA in 2023 and the vaccine product will enter the market in 2024.
Production and Sales Take off Together
For vaccine companies, product development is only the first step of a long journey.
If the R&D platform pitches the benchmark for a vaccine company, then the company's hard power of production capacity and soft power of sales channels and business management will actually determine how much of its expectations can be realized.
In this regard, the vaccine titan has its unique advantages by building a full industry chain.
In terms of production capacity, through a series of mergers and acquisitions, AIM Vaccine has a total production capacity of nearly 100 million doses. According to China Insights Consultancy, AIM Vaccine's mRNA vaccine pilot plant is one of the first plants in China that have reached GMP standards. The company's mRNA vaccine plant under construction is designed with an annual capacity of 400-600 million doses. At the same time, AIM Vaccine has also planned additional capacity for its candidates in the pipeline to ensure stable supply in the future.
One piece of data to notice is that AIM Vaccine has maintained a 100% pass rate in its recombinant Hepatitis B vaccine (Hansenula polymorpha) batch release quality review by the National Institutes for Food and Drug Control ever since the product was approved. It is also the only human rabies vaccine manufacturer that achieved a 100% pass rate in batch release review over the past five years. This indirectly indicates that AIM Vaccine not only produces vaccines at a large scale but also with high quality.
In terms of sales, as the largest private vaccine company in China, AIM Vaccine has more than a hundred employees in its internal sales and marketing team who have over 10 years’ sales experience in pharmaceutical or vaccine industry. On average, the core leaders of the commercial team have 12 years' vaccine commercial experience in leading MNCs.
The AIM Vaccine commercial team has formed a vast sales network by linking with all provincial CDCs and over 2,000 county-level CDCs across all 31 provinces, municipalities, and autonomous regions in China.
Once the sales volume increases, this commercial infrastructure will also benefit from economies of scale and thus reduce costs, which is also supported by financial data. According to its prospectus, the sales expense ratio of AIM Vaccine decreased from 34.7% in 2019 to 32.6% in 2020 and came to 29.3% in 2021.
In summary, AIM Vaccine has built a pyramid-shaped business model. At the bottom, it has its foundation of blockbuster products, massive production capacity and commercial infrastructure, which altogether acts like a titan by guaranteeing AIM Vaccine's normal operation and providing support for product renovation. At the middle, the R&D platform of AIM Vaccine enables it to dream for the future with continuous innovation. At the top, there are AIM Vaccine's latest innovative products, including COVID-19 mRNA vaccine, PCV13, MCV4 and etc., which will be potential blockbusters in the vaccine market and promise revenues in the future.
In this way, these three levels of pyramid structure form a positive cycle. The global vaccine market is expected to reach $129.2b by 2030 with a compound annual growth rate of 11.8% from 2021 to 2030. With Chinese people gradually developing awareness of disease prevention, vaccination willingness and the rate of vaccination will continue rising and AIM Vaccine is expected to have great potential to lead in this new trending market.
