New stock news | Zhonghui Biology is sprinting for Hong Kong IPO The first commercialization of quadrivalent influenza virus subunit vaccine in China fills the gap in the domestic market.

On January 23, the domestic innovative vaccine company Jiangsu Zhonghui Yuan Tong Biological Technology Co., Ltd. (hereinafter referred to as Zhonghui Biological) submitted its prospectus to the Hong Kong Stock Exchange for the first time, with CITIC SEC and CICC International as its sponsoring agencies. It is reported that Zhonghui Biological was established in 2015 and is dedicated to the research and industrialization of human vaccines. Focused on the unmet demand for high-quality vaccines, the company provides safe and effective vaccine products to the market through independent innovation and technology licensing, while also advancing the development of traditional vaccine upgrades and innovative vaccines. After years of research and development, the company's product pipeline includes two core products: a quadrivalent influenza virus subunit vaccine and a freeze-dried human rabies vaccine under research, as well as 11 other vaccines under research. Innovatively overcoming technical difficulties, the first commercially available quadrivalent influenza virus subunit vaccine in China Among them, the company's core product, the quadrivalent influenza virus subunit vaccine (Huikenxin), has been approved for use in the Chinese market by the National Medical Products Administration in May 2023 for individuals aged 3 and above. It is the first and only quadrivalent influenza virus subunit vaccine approved in China as of January 15, 2025, filling the gap in the field of quadrivalent influenza virus subunit vaccines in the country. Currently, Huikenxin has been included in the bidding list in 30 provinces and autonomous regions across the country, and has been selected by over 1,100 county-level disease control centers in local procurement. It has maintained a 100% approval rate in batch signing and quality inspection audits. As of September 30, 2024, Zhonghui Biological achieved commercial revenue of RMB 217.2 million. As a new generation influenza vaccine with a domestic technical route, Huikenxin further enriches the category of high-end influenza vaccines in China, providing the public with safer and more ideal vaccination options. The NDA application for Huikenxin for the 6-35 month age group was accepted in June 2024. In the international market, the company has completed the application registration for Huikenxin in Macau, initiated the registration process in the Philippines, and plans to register the product in Thailand, Uruguay, Indonesia in 2025, and Canada, Singapore, Mexico, and Hong Kong in 2026. Different from common colds, influenza is more infectious and more serious. According to data from the World Health Organization (WHO), influenza causes up to 650,000 deaths globally each year. In the spring of 2024, multiple regions in China experienced H1N1 influenza outbreaks. The WHO Influenza Vaccination Position Paper and the Chinese Center for Disease Control and Prevention's "China Influenza Vaccine Immunization Technical Guide" both clearly state that annual influenza vaccination is the most economically effective measure to prevent influenza, significantly reducing the risk of influenza and severe complications for vaccine recipients. According to the prospectus of Zhonghui Biological, the Chinese influenza vaccine market grew significantly from RMB 20 billion in 2019 to RMB 88 billion in 2023, with a compound annual growth rate of 45.1%. The total number of influenza vaccine approvals has increased from 30.8 million doses in 2019 to 70.5 million doses in 2023. It is estimated that the domestic influenza vaccine market will further increase to RMB 19.8 billion by 2032. It is worth noting that the current penetration rate of the Chinese influenza vaccine market is still low. According to data from the Chinese Center for Disease Control and Prevention, the overall influenza vaccination rate in China from 2022 to 2023 was 3.7%, while according to data from the US Centers for Disease Control and Prevention, the vaccination rate for all individuals aged 6 months and above in the United States during the same influenza season was 49.3%. This data indicates that the vaccination rate in China is lower than that of overseas countries, leaving ample room for improvement. Currently, there are two types of influenza vaccines on the market: trivalent and quadrivalent. Compared to trivalent influenza vaccines, quadrivalent influenza vaccines cover more influenza strains, providing more comprehensive protection. Zhonghui Biological's self-developed quadrivalent influenza virus subunit vaccine Huikenxin uses a safer and more advanced subunit technology, a significant technological upgrade from traditional virus split vaccines, providing products with high antigen purity and low risk of adverse reactions. Therefore, the quadrivalent influenza virus subunit vaccine developed by Zhonghui Biological has advantages such as comprehensive protection, high antigen purity, and low incidence of adverse reactions, further enriching the choices of influenza vaccines and potentially promoting the continuous expansion of the influenza vaccine market, especially the high-end influenza vaccine market. According to the prospectus, with the approval of the first quadrivalent influenza virus subunit vaccine developed by Zhonghui Biological in 2023, it is estimated that the market for influenza virus subunit vaccines in China will grow rapidly from RMB 400 million in 2023 to RMB 3.4 billion by 2032. Accelerated expansion of the domestic innovative vaccine market, Zhonghui Biological's product pipeline has great potential According to the prospectus, driven by market demand, after years of research and development, Zhonghui Biological has innovatively focused on developing new vaccines and upgrading traditional vaccines around the use of new technologies consistent with international epidemic trends and vaccine development directions, constructing a rich pipeline of vaccines. Currently, the company has a total of 13 products in its pipeline, of which one product, the quadrivalent influenza virus subunit vaccine (for individuals aged 3 and above), has been approved, three products have entered clinical and later stages, including the trivalent influenza virus subunit vaccine with an NDA application; the 23-valent pneumococcal polysaccharide vaccine and the freeze-dried human rabies vaccine (human diploid cells) have each completed Phase I clinical trials; in addition, the adjuvanted quadrivalent subunit influenza vaccine, adjuvanted trivalent subunit influenza vaccine, and recombinant herpes zoster vaccine have obtained IND approval and are ready to enter the clinical trial phase; several other products are in the preclinical stage. The company's multi-field pipeline development is robust. Among them, the company's core product, the freeze-dried human rabies vaccine, is developed based on human diploid cells. The World Health Organization recommends that human diploid cells are one of the safest cell culture substrates for producing viral vaccines, making the vaccine prepared from human diploid cells a "gold standard" rabies vaccine with good safety. The freeze-dried human rabies vaccine under research has the potential to become a good alternative to mainstream Vero cell rabies vaccines. Additionally, in terms of vaccination method, Zhonghui Biological uses aSealed diluent syringe, combined with lyophilized preparation, reduces manual extraction and preparation steps, lowers risk of contamination, and makes vaccination more convenient. In terms of vaccination plans, more flexible vaccination schemes are being developed, such as the Essen scheme (five doses), the Zagreb scheme (four doses), and simple four-dose schemes, which can meet different needs. This adaptability also enhances the advantage in the bidding entry level at the county level.According to the company's prospectus, the market for rabies vaccines in China is expected to increase significantly from RMB 38 billion in 2019 to RMB 89 billion in 2023, and is further expected to increase to RMB 125 billion by 2032. Rabies vaccines produced by diploid cells are expected to become a good alternative to traditional rabies vaccines in the Chinese market due to their high safety. As of January 15, 2025, there are 23 rabies vaccines already on the market in China, with only 2 vaccines developed using diploid cells, highlighting their huge growth potential. To ensure the smooth progress of pipeline research and development, Zhonghui Biology has built a comprehensive vaccine development support platform, covering vaccine development support platforms and proprietary technology platforms. The vaccine development support platform includes three major platforms: genetic engineering and protein expression and purification, mRNA vaccine research, adjuvant development and production, which can achieve from protein vaccine process development to mRNA vaccine precise design, adjuvant customized development, etc. The proprietary technology platform includes large-scale amplification, polysaccharide-protein binding technology, microbiology and immunology research platforms, which can enhance virus yield, focus on polysaccharide-protein binding process development, in-depth study of microbial pathogenic mechanisms, etc. With these platforms, Zhonghui Biology has not only obtained 32 patents, but also can help the company discover and develop new vaccines under research with significant market demand and synergistic effects with the existing pipeline. To ensure the commercial landing of products after approval, in terms of production capacity layout, Zhonghui Biology has established its own production capacity since 2019, setting up a professional team consisting of 249 vaccine production professionals and 110 quality management professionals. The core leadership has rich experience to ensure high-quality production. According to the prospectus, since the launch of the quadrivalent influenza virus subunit vaccine in 2023, the company's product qualification rate was 100% and batch issuance approval rate was 100% during the reporting period. Currently, the company's first production park in Taizhou, Jiangsu has played an important role. The first influenza vaccine production line raw material workshop can process 20 to 30 million chicken embryos per year, with an annual production capacity of 4 million doses in the finished product formulation workshop. The second production line with the same capacity is also in the process validation stage. Adhering to the mission of enabling the world to use high-quality Chinese vaccines, Zhonghui Biology adheres to international operational strategies, focusing on differentiated research and development of vaccines. The outlook for products under research is promising, and it is expected to seize market opportunities in the rapidly growing and low-penetration Chinese vaccine market, thereby continuing to drive the company's future performance, maintaining strong competitiveness in the industry, and simultaneously promoting the innovation and upgrade of China's vaccine industry, enabling Chinese people to use global innovative vaccines, and the world to use high-quality Chinese vaccines.