8 billion, the 'secret' layout outside the vaccine disc, and the distribution of dual antibody, CGT, CXO

The nine-valent HPV vaccine of Merck was still enjoying exclusivity period and the growth was still strong. In 2021, the operating revenue of the company's agent (HPV vaccine related) was 20.93 billion yuan (a year-on-year growth of 49.9%), accounting for 68.28% of the total revenue.

Inspired by it, burdened by it.

In the first half of 2023, the agency agreement between ZFBIO and Mursadong expires. The renewal is not a problem. The real challenge comes from the change of the competitive landscape.

Potentially the strongest rival to the HPV nine-valent vaccine is Wantai. Wantai Biology recently stated that the company's nine-valent HPV vaccine, as an iterative product, can be declared for market in advance with 12-month continuous infection. The current clinical design of the company's nine-valent HPV vaccine is consistent with the "Human papillomavirus vaccine Clinical Trial Technical Guidelines (Draft for Comments)", which means it is expected to shorten the time of the company's vaccine to market.

In the market worry Zhifei "green" background, who can fill the HPV vaccine, become the company's first pole of growth?

After the first generation of novel coronavirus recombinant protein came to market, the second generation of Zhifei Bio-vaccine was also launched into international clinical practice. However, the novel coronavirus vaccine market is not a certain and sustainable market due to the great influence of policies, and the replacement may not be expected.

Chip-field is pinning its hopes on tuberculosis. At present, ZIFbio has developed the appropriate card for diagnosis and the "micro card" product for the prevention and treatment of tuberculosis disease in people with latent Mycobacterium tuberculosis infection, which has been approved by WHO recently. The management of ZIFBio has said that the tuberculosis vaccine will become the most important vaccine in the future, which may generate a market scale of about 50 billion yuan. And more brokers forecast that the peak sales of intelligent flying bio-related single products will reach 5 billion.

In contrast, GSK and Merck are not optimistic about the prospects of conjugate vaccines. Coherent Market Insights shows that the global human TB vaccine market, which accounts for more than 80% of TB, is estimated to be worth $50.57 million in 2022, growing at a compound annual growth rate of just 4% from 2022 to 2030. At the same time, multinational pharmaceutical companies believe that the input and output of related vaccines are not proportional.

When an egg cracks, it may at some point spread all over the body.

01

Major shareholders continue to reduce their holdings

Since the listing of Zhifei biology, the major shareholder Jiang Rensheng shareholding from 55.8% to 48.32%, the overall reduction of the total share capital of 7.48%.

It is worth noting that, with the sales of HPV vaccine and COVID-19 vaccine soaring, the stock price is also rising. Since 2020, the major shareholder Jiang Rensheng has reduced his holdings more frequently and cashed out more and more.

Wu Guanjiang, another former second largest shareholder, is selling down frequently.

Known as the "Chongqing stock liquidation king", the man first reduced his holdings in Zhifei in 2012. In 2014, he founded Shenzhen Sansanren Technology Co., LTD. (an "Internet + vaccination" platform). In August 2015, he left the position of vice chairman of Zhifei Biological. Up to now, Wu Guanjiang is expected to cash out more than 10 billion yuan from the listed company, has fallen from the second largest shareholder in the early years to the seventh largest shareholder, the future does not rule out the possibility of "liquidation" completely exit.

Although there is no clear and direct correlation between the decline of the share price of Zhifei Biology in 2021 and the reduction of the holdings of the two major shareholders, Jiang Rensheng and Wu Guanjiang, it has also hit the confidence of the market to a certain extent.

Wu Guanjiang "fly alone" is beyond fault, and Jiang Rensheng, the major shareholder of Zhifei biology, with money to where?

02

"Changing Horses" Smart Investment: An "invisible giant" with a potential management scale of more than 8 billion yuan

On December 31, 2014, Chongqing Zhirui Investment was registered and established, with 10 million yuan invested by Zhifei Bio, accounting for 10%. Jiang Rensheng, the major shareholder, contributed 90 million yuan, accounting for 90 percent.

From 2016 to 2020, Jiang Rensheng and Zhifei Bio have increased the capital of Chongqing Zhirui for three times, with the amount of 400 million yuan, 500 million yuan and 1 billion yuan respectively.

According to the Securities Times website, Chongqing Zhirui has invested more than 8 billion yuan (the size of the investment is doubtful, but it is more likely to be the value of the assets). But the report also said that Jiang Rensheng had invested billions of yuan in the company from several times of personal stake sales and dividends from listed companies. Due to the high risk and long cycle of new drug research and development, in order to reduce the investment risk of listed companies, the investment of Chongqing Zhirui is mainly personal investment.

Taking stock of the key investment projects of Zhirui Investment, it is not difficult to find that its investment strategy is extensive and cutting-edge, covering new biological drugs, cell and gene therapy, CRO&CDMO, high-value consumables, etc.

● Zhixiang Jintai: a research and development manufacturer of biological drugs. The main products are monoclonal and double-clonal antibodies for the treatment of autoimmune diseases, infectious diseases and tumors. At present, the company has 12 products under research, none of which are commercialized.

● TPK is committed to becoming a diabetes biological products research and development and production group. In the short term, TPK focuses on biosimilar drugs (such as GLP-1) and innovative drugs are auxiliary. In 2019, TPK will launch the TPK project of Zhirui Biological Industrial Park (with an estimated total investment of 2.3 billion yuan) to build a research and development base of diabetes biological products.

● Chongqing Precision Biology: Focusing on CAR-T/NK cell drug development, we have laid out more than ten product pipelines for leukemia, lymphoma, colorectal cancer, lung cancer, breast cancer and so on. We have obtained clinical implied approval for two first-class biological new drugs of CAR-T cells and five indications.

● Shanghai Jinsi Bio: a provider of gene therapy products, we can provide one-stop CDMO services for the design, cloning and GMP production of viral vectors. We have a 4800 square meter dedicated research and development platform (GMP) for tumor immunotherapy and gene therapy vectors in Shanghai.

● Chongqing Meride Biology: a comprehensive CRO company, mainly committed to chemical drugs, preventive and therapeutic biological products and medical devices for preclinical research and clinical research services (GLP to GCP chain service).

● Chongqing Xike Medical: a third-class implantable medical device research and development, production and sales enterprise, focusing on 3D printing and other biological intelligent manufacturing technology, to carry out cutting-edge scientific and technological research (known directions include orthopedics).

Looking back at the present, the market value of ZV has fallen from $360 billion to $153.7 billion. Can it regain its peak? No one knows the answer.

At the beginning, investors' interpretation of the logical probability of "widening the moat for Zhifei" is just a superficial statement. A high-quality asset is wrapped in the body of a listed company with a large market value, and the possibility of value discovery is limited. We can only congratulate major shareholders on having several more "potential IPO asset platforms".

03

Zhixiang Jintai is the first, but by no means the last one

Smart Investment has invested in the project, the first ushered in the harvest is Zhixiang Jintai.

Zhixiang Jintai was founded by Jiang Rensheng in 2015. In the last round of external financing in 2021, the company was valued at 6.6 billion yuan. If the company materials in the capital raising plan, it is expected that the market value of Zhixiang Jintai after listing may exceed 15 billion.

It is worth noting that no products of Zhixiang Jintai have been commercialized at present. The pipeline with the fastest clinical progress is IL-17A monoclonal antibody GR1501 injection, and many indications have been in the third clinical stage. In addition, IL-4Rα monoclonal antibody GR1802 and RABV double-clonal antibody GR1801 pipeline have also entered the second clinical stage, and the pipeline in the later stage is not too thin.

Most bearish voices in the market focus on the company's IL-17A monoclonal antibody products. Due to the domestic research pipeline of the same target, low penetration rate in the industry (foreign similar products did not meet the expectations), the product prospects are not optimistic.

The actual core value of Zhixiang Jintai is derived from three points: 1) Backed by Zhifei Bio-support, this investment is safe enough (buyback ability of major shareholders) and will not be delayed by future commercialization; 2) The company's bisspecific antibody platform and dual-carrier phage rendering antibody library technology have certain characteristics, which can rapidly screen and construct common light chain double antibodies, thus promoting the development of a number of clinical double antibody pipelines; 3) The company focuses on the field of autoimmune and infectious diseases and the indications for the pipelines are differentiated, and some pipelines are at the forefront of domestic R&D progress.

From another perspective, it is not difficult to see Zhixiang Jintai's attitude towards drug originality and keen commercialization level. One is that the company's pipeline is all independent research and development, and the other is that the company cut down GR1405 and GR1401 two projects because of the fierce competition of PD-1 drugs, with a total investment of 212 million yuan.

Zhixiang Jintai valuation of fair value, need to be left to the market to judge; But for Zhifei biology, if the market value of Zhixiang Jintai after listing can reach 15 billion, the value of the equity held by Zhifei biology is more than 1 billion.

However, Zhifei biology, Zhirui Investment, Jiang Rensheng for Zhixiang Jintai IPO road spent a lot of effort and resources, for two examples:

1. From 2019 to 2021, the affiliated companies almost dominated the top five customers list of Zhixiang Jintai, among which the most remarkable is that Zhixiang Jintai transferred the substitution research of the key materials of COVID-19 vaccine and the authorization of the commercial license of "CHOZNGS" to Zhifei's subsidiary Zhifei Dragon Koma, which obtained 39 million yuan.

2. On November 11, the announcement of ZV showed that Mr. Jiang Rensheng, the major shareholder, pledged 90.8 million shares of shares; According to the prospectus of Zhixiang Jintai, Jiang Rensheng pledged 43.77 million shares in Chongqing Agricultural and Commercial bank for Zhixiang Jintai credit guarantee.

In addition to the investment income, according to the relationship between Zhifei biology and Zhixiang Jintai, the benefit of "reverse empowerment" is very weak in Zhifei, the biggest beneficiary is still the major shareholder Jiang Rensheng.

In the current market environment, investors are very sensitive to every move of listed companies. It is not good to judge the impact of Zhixiang Jintai on Zhifei after its listing. On the positive side, Zhixiang Jintai may no longer rely on major shareholders and Zhifei's blood transfusion in the future, and on the negative side, it may distract major shareholders' energy for Zhifei.

Conclusion: The love of the market, will disappear, and line and cherish.