The Zhitong Finance App learned that Huatai Securities released a research report saying that the shingles vaccine market in China has entered a stage of significant growth, with a market size of about 3 billion dollars in 2023. The market growth rate is expected to be about 180%, 80%, and 40% from 2024 to 2026:1) The vaccination pool for middle-aged and elderly people is huge and continues to grow (the baby boom in the 60s gradually entered the age of 60); 2) The bank estimates the vaccination rate of 0.5% and the cumulative penetration rate of 0.8% for the Chinese urban population aged 50 and above in 2023. There is a big gap of 18.5%; 3) Supply and sales have improved dramatically. Baike was listed in 2023, GSK delivered Zhifei Biotech in 2024, and localization of lifting histone will begin in 2026.

Related companies: Baike Biotech (688276.SH), Green Bamboo Biotech (02480), Recco Biotech (02179), Cansino (688185.SH), etc.

Huatai Securities's views are as follows:

Benefiting from aging, low penetration rate, and domestic marketing, the Chinese shingles vaccine market is expected to accelerate. The bank believes that the Chinese shingles vaccine market has entered a stage of significant growth, with a market size of about 3 billion in 2023, and the expected market growth rate of about 180%, 80%, and 40% from 2024 to 2026:1) The vaccination pool for middle-aged and elderly people is huge and the number continues to grow (the baby boom in the 60s gradually enters 60 years old); 2) The bank estimates that the vaccination population rate in China is 0.5% and the cumulative penetration rate is 0.8% in 2023, as far as the US 2021 There is a big gap between the annual vaccination rate of 4.6% and the cumulative penetration rate of 18.5%; 3) There has been a significant improvement in supply and sales. Baike was launched in 2023, GSK delivered Zhifei Biotech in 2024, and localization of histone will begin in 2026.

The herpes zoster virus is generally at high risk, and all vaccines that have been marketed have shown good protective efficacy

Herpes zoster is a virus that lurks in neurons after infection with the varicella-zoster virus. It causes rash blisters and chronic pain as age increases and immunity declines. The infection rate among the Chinese population is higher, the positive rate of VZV IgG antibodies in healthy people aged 40 and over is 95%, and the incidence rate of people over 50 years of age exceeds 5 per 1000, and the older the age, the higher the incidence rate, and the more severe the course of the disease. Two vaccines are currently on the market overseas: the Merck attenuated live vaccine, Zostavax, and the GSK recombinant protein vaccine Shingrix. The former has low protective efficacy (18% to 70%), short protection time but few adverse effects, while the latter has high protective efficacy (91% to 97%) and long protection time (about 89% over 10 years).

The market potential is £4 billion, and the annual vaccination rate for the elderly in the US is 5% to 7%

Zostavax slowly climbed down after launch. Due to the lower unit price (about 130 US dollars per dose) and the slightly narrow ACIP recommended age group (people aged 60 and over), the peak value remained at 600 million to 700 million US dollars from 2012 to 2017, and withdrew from the US market in 2018. Shingrix was recommended by ACIP in 2017. Given the high unit price (total of 240 US dollars for two doses) and ACIP's broad recommended age group (people aged 50 and over), the US region rapidly grew to nearly £2 billion in 2022, and Europe and overseas are also rapidly climbing. GSK targets Shingrix sales to sprint to £4 billion in 2026. According to estimates from the US CDC annual vaccination rate survey, the annual vaccination rate for people aged 60 and over in the US was 3-4% for Zostavax from 2009 to 2017, and the annual vaccination rate for Shingrix from 2019 to 2021 was 5-7%.

Live attenuated vaccines have been localized, and recombinant protein vaccines are expected to be localized in 2026

Currently, only GSK's recombinant protein vaccine and Baike Biotech's live attenuated vaccine are marketed in China. Companies currently developing recombinant protein vaccines include Luzhu Biotech (the company is expected to submit BLA by the end of 2024), Yidao Biotech, Micocon, Ricobiology, and Huanotai. There are not many active attenuated vaccine researchers. Currently, only Sinopharm Group is promoting clinical trials, and overseas companies (Pfizer, Moderna, Vaccitech, etc.) and domestic companies (Jia Chen Xihai, Vaccitech, etc.) and domestic companies (Jia Chen Xihai, Cansino, etc.) are promoting clinical trials. Given the new Technology, we will have to wait and see when it comes to market.

China's shingles vaccine market potential may exceed 50 billion yuan

The bank estimates that China's shingles market is about 3 billion in 2023, and is expected to sprint to 50 billion in 2024-26, and is expected to sprint to 50 billion in 2030:1) According to data from the Bureau of Statistics, the bank estimates an urban population of about 150 million people aged 50 to 65, an urban population of about 120 million people aged 65 and over, and a rural population of about 290 million people aged 50 and over; 2) Combined with the US vaccination rate (5 to 7%), the Chinese influenza vaccine (~ 4%) /pneumonia vaccine (~ 3%) /HPV vaccination rate (6%) The annual vaccination rate in urban areas is expected to exceed 5%, and the annual vaccination rate in rural areas is expected to sprint to 1%; 3) 2023 is the first year of domestically produced vaccines, 2024 is the first year of full marketing, and the market is expected to accelerate significantly.

Risk warning: Risk of R&D falling short of expectations, sales falling short of expectations, and falling prices beyond expectations.