The company's professional R & D team has built three major technology platforms for many years to incubate and enrich new vaccine R & D pipelines.
As an innovative vaccine company, the core scientific team members have more than 20 years of industry experience in vaccine product development and commercialization. With years of research and development by the professional team and annual R & D investment of more than 100 million yuan, the company independently developed three major technology platforms: new adjuvants, protein engineering and immune evaluation, and thus established an innovative vaccine combination of 12 vaccines under development, covering 5 of the top 10 diseases in the "Global Disease burden" released by WHO in 2019. And the disease areas covered by three of the world's top five best-selling vaccine products in 2020. Among them, the research and development of HPV vaccine and recombinant protein COVID-19 vaccine have made rapid progress.
Independent adjuvant platform + leading protein engineering platform helps new vaccine development after 5 years of deep ploughing, the company has successfully established the only independent adjuvant platform in China. With the advantage of adjuvant platform, the company has developed target products for the five new types of adjuvants available all over the world.
Through the adjuvant platform, the company can gain and maintain a strong competitive advantage: ①, as the only company in China with its own adjuvant platform, can develop all adjuvants approved by FDA through this platform; ② does not have to rely on any specific adjuvant suppliers ③ can adapt the most suitable adjuvant according to the immune mechanism of different vaccines, so as to differentiate the clinical advantage of the product and promote the iteration of product development. The company's second-generation tetravalent and nine-valent HPV vaccine candidates (namely REC604a and REC604b), as well as COVID-19 vaccine ReCOV, all use new adjuvants developed by the company.
And the neutralizing antibody titer obtained by ReCOV leads the world, which is largely due to its self-developed oil-in-water adjuvant BFA03.
In addition, the company's protein engineering platform uses a structure-based immunogen design approach to provide antigen optimization solutions for subunit vaccine development based on interdisciplinary research. The company's COVID-19 vaccine ReCOV is based on the protein engineering platform, using NTD-RBD-foldon protein structure, with NTD and RBD as the target.
Around the broad HPV vaccine market layout of two generations of a total of five vaccine companies' core product REC603 is a recombinant HPV nine-valent candidate vaccine, has entered the clinical III phase trial. In addition to REC603, the company has also developed two recombinant HPV bivalent candidate vaccines, namely, REC601 and REC602 for HPV16/18 type and HPV6/11 type, respectively. The two vaccines are in phase I clinical trials in China. The three vaccines are expected to be listed in 2025 and are expected to generate revenue in 2026. In addition, the company is also developing REC604a and REC604b, a recombinant HPV tetravalent vaccine and a recombinant HPV nine-valent vaccine, respectively, using a new adjuvant to target AS04 independently developed by the company, and it is possible to use a two-dose administration scheme.
Double track layout COVID-19 Vaccine Research and Development
Two kinds of innovative COVID-19 vaccines are under development: 1) Recombinant COVID-19 vaccine (ReCOV) based on new adjuvant and protein engineering platform: using NTD-RBD-foldon protein structure, targeting NTD and RBD, using the company's independently developed new adjuvant BFA03 for standard AS03. It has the advantages of high interactive protection against new variants, safety, expansibility, high stability and low cost. 2) COVID-19 vaccine mRNA vaccine (R520A): this vaccine is specially aimed at O'Micron variant virus, and the preparation stability under 4 ℃ and 25 ℃ conditions was achieved by using the freeze-drying technology developed independently. Preclinical research and development activities are currently under way, and it is planned to submit IND applications to the SFDA or other overseas authorities in 2022.
In the continuous progress of industrialization construction, COVID-19 Vaccine and HPV Vaccine already have large-scale production capacity. The company is building a HPV vaccine production base in Taizhou City, Jiangsu Province, with a design capacity of 5 million doses of HPV 9-valent vaccine or 3000 million doses of HPV bivalent vaccine per year. The construction of the first phase of HPV vaccine production base is expected to be completed by the end of 2022. The construction of ReCOV production base has been completed, supporting a maximum annual output of 300 million doses. On April 9, 2022, the Taizhou production base received a declaration of compliance issued by the European Union quality Authorizer (QP).
Issuing and listing provides sufficient funds for the company's long-term development.
The company received a net payment of about HK $672 million through H-share issuance and listing, of which more than 85 per cent of the funds will be used for the research and development and registration of various vaccine pipelines. The company also introduces mature investment institutions through cornerstone placement to enhance investors' confidence in the company's development prospects.
Investment advice: cover for the first time and give a "buy" rating
Without considering the impact of COVID-19 's business on the company's performance, by selecting the 10-year free cash flow from 2022 to 2031 for a conservative valuation, we estimate that the company's market capitalization range is 15.50-16.31 billion yuan. We are optimistic that the company will focus on the research and development of new vaccines, with a leading protein engineering platform and independent adjuvant platforms, and the R & D pipeline covers a number of new high-value adult non-immunization programming vaccines, including HPV vaccine, COVID-19 vaccine and herpes zoster vaccine. Conventional vaccine products are expected to contribute high growth cash flow from 2026. At the same time, we also look forward to the achievement brought by the approval of COVID-19 vaccine on the market. We covered for the first time, giving the company a "buy" rating.
Risk hint
The risk of continued net loss in the future; the risk of failure in vaccine development and marketing; the risk of failure to improve the technology platform; and the risk of improper intellectual property protection.