Source: National Business Daily, reported by Chen Xing, edited by Liang Xiao

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◎ In Ms. Fan’s opinion, nosocomial infection used to be traditionally treated with antibiotics, but it is necessary to find new means to treat nosocomial infection with the emergence of antibiotic resistance. “Moreover, compared to the economic and treatment costs after infection, vaccines are more beneficial in reducing the economic burden on patients and the treatment burden on hospitals.” She further said.

◎ Fan Fan believed that the COVID-19 pandemic not only deepened the public's understanding of influenza vaccine, but also strengthened their awareness of disease prevention. In this context, it is an irresistible trend to develop a large category of vaccines such as influenza vaccine with differences in technical route.  

OLYMVAX (SH688319, share price: RMB 15.29/share, market capitalization: RMB 6.197 billion), specializing in Tetanus Vaccine, Adsorbed, expanded to the viral vaccine segment by establishing a research institute. On December 15, a service-oriented research institute for vaccine research and development and industrial transformation and sharing, constructed by its wholly-owned subsidiary Chengdu XENOMIX Biotechnology Co., Ltd. as the investment entity, was announced to be completed.

Mr. Fan Shaowen, Chairman of OLYMVAX, stated in an exclusive with a reporter from the National Business Daily that the Research Institute will be used for the research and development of biological products such as virus vaccines, bacterial vaccines, recombinant protein vaccines, nucleic acid vaccines and new vaccine adjuvants after its establishment. Influenza vaccine is the first attempt of OLYMVAX to develop a virus vaccine.

In the field of bacterial vaccines, the Phase III clinical trial of Staphylococcus Aureus Vaccine, which is used to solve the problem of drugresistant bacteria, is currently underway. Staphylococcus aureus is known to be a major cause of severe pneumonia, other respiratory infections, and infections acquired in intensive care units and geriatric department. It is called a "superbug" by the WHO due to its high pathogenicity, multiple routes of epidemic transmission and high drug resistance, where methicillin-resistant Staphylococcus aureus (MRSA) has a lethality rate of 20%.

Establish a research institute to develop viral vaccine, with influenza vaccines as the first “test” product

OLYMVAX, which chiefly produce bacterial vaccines, also wants to get a share in the virus vaccine market.

In March this year, OLYMVAX announced that it planned to build a service-oriented research institute for vaccine research and development and industrial transformation and sharing by its wholly-owned subsidiary Chengdu XENOMIX Biotechnology Co., Ltd. (hereinafter referred to as XENOMIX) as the implementation entity, with an estimated total investment of RMB 300 million. OLYMVAX Research Institute was completed on December 15.

Photo Source: Provided by the enterprise

Mr. Fan Shaowen stated in an interview with a reporter from the National Business Daily that after the establishment of the Research Institute, it will be used for the research and development of biological products such as virus vaccines, bacterial vaccines, recombinant protein vaccines, nucleic acid vaccines and new vaccine adjuvants, and it is composed of large-scale cell and bacterial culture technology platform, recombinant gene engineering technology platform, protein purification coupling technology platform, quality evaluation system service platform, pilot research technology platform, and new high-end adjuvant and immunosuppressant technology platform.

In terms of viral vaccines, OLYMVAX selected influenza vaccine as the first “test” project. In July this year, XENOMIX and Lanzhou Bailing Bio-Tech Company Limited signed a cooperation agreement to jointly develop cell-based influenza vaccines. It is worth mentioning that the influenza vaccine market has become more competitive. A total of 465 lots of influenza vaccine were released in 2021, up 56% year on year, according to the data from the National Institutes for Food and Drug Control, including 318 tetravalent influenza vaccines, a year-on-year increase of 75%, 147 trivalent influenza vaccines, a year-on-year increase of 27%, and 25 batches of nasal-spray influenza vaccine of BCHT Biotechnology, a year-on-year increase of 150%. The tetravalent and nasal-spray influenza vaccines are replacing trivalent vaccines and becoming the mainstream in the market.

The companies in China that have listed tetravalent influenza vaccine products include Hualan Vaccine (SZ301207, stock price: RMB 50.1, market capitalization: RMB 20.09 billion), GDK Biotechnology (SH688670, stock price: RMB 43.77, market capitalization: RMB 3.94 billion), Sinovac Biotech, Shanghai Stock Exchange, Wuhan Stock Exchange, Changchun Stock Exchange, etc. The tetravalent influenza vaccine of Hualan Vaccine ranked first in terms of market share.

Photo Source: Screenshot of Research Report of Tianfeng Securities

There are also many enterprises involved in the development of tetravalent influenza vaccine, including Zhifei Biological (SZ300122, stock price: RMB 84.85, market capitalization: RMB 136.14 billion), Fosun Pharmaceutical (SH600196, stock price: RMB 37.51, market capitalization: RMB 100.39 billion), Sanofi and so on. However, Ms. Fan Fan, one of the actual controllers of OLYMVAX, believes that OLYMVAX’s influenza vaccine has a different technological path from existing vaccines. The existing major influenza vaccine is avianized vaccine. That is, inoculate the virus into the allantoic cavity of chicken embryo for virus reproduction, undergo multiple purifications and splitting decompositions, and prepare the vaccine stock. In contrast, OLYMVAX’s influenza vaccine is prepared from cellular matrix, “the vaccine is cultured directly in the fermenter, which is a completely modern process that excludes protein allergens and is better in terms of safety. The MDCK cell suspension process is theoretically more productive, taking less time.”

It is widely believed in the industry that the competition for influenza vaccines is still mainly in the incremental market. Generally speaking, the influenza vaccine penetration rate and public awareness of vaccination in China are still at a relatively low level. The vaccination rate in China was about 4.2% in 2020. Ms. Fan Fan believed that the COVID-19 pandemic not only deepened the public's understanding of influenza vaccine, but also strengthened their awareness of disease prevention. In this context, it is an irresistible trend to develop a large category of vaccines such as influenza vaccine with differences in technical route. As expected by the Company, this vaccine will be launched around 2025.

Nosocomial infection series vaccine is expected to solve the problem of drug-resistant bacteria caused by antibiotic overuse

The extension from bacterial vaccines to viral vaccines has been envisioned by OLYMVAX for a long time.

Ms. Fan Fan previously stated in an interview with a reporter from the National Business Daily that, in order to further develop in the field of vaccines, it is necessary to conduct studies on both bacterial and viral vaccines. Therefore, OLYMVAX first established a platform in the form of research institute and gradually became a three-dimensional vaccine enterprise.

But bacterial vaccine is still the development foundation of OLYMVAX. On August 31 this year, the Phase III clinical trial protocol of the Company’ Staphylococcus Aureus Vaccine was approved by the Ethics Committee of the Leading Organization - Beijing Jishuitan Hospital, and approved by the Chinese Office of Human Genetic Resources Management, and the first subject of the Principal Investigator  was vaccinated on the same day. Staphylococcus Aureus Vaccine is one of the Company’s vaccine series against nosocomial infection.

Staphylococcus aureus is a major pathogen of severe pneumonia, other respiratory infections, war wound, burns, prosthetic joint infection, infections acquired in intensive care units and geriatric department, and bacteremia. It is called a "superbug" by the WHO due to its high pathogenicity, multiple routes of epidemic transmission and high drug resistance, where methicillin-resistant Staphylococcus aureus (MRSA) has a lethality rate of 20%.

A paper published by the Lancet in November this year said that in 2019, the number of deaths associated with the two most deadly pathogens, Staphylococcus aureus and Escherichia coli, exceeded that of HIV/AIDS (864,000 deaths).

In Ms. Fan’s opinion, nosocomial infection used to be traditionally treated with antibiotics, but it is necessary to find new means to treat nosocomial infection with the emergence of antibiotic resistance. “Moreover, compared to the economic and treatment costs after infection, vaccines are more beneficial in reducing the economic burden on patients and the treatment burden on hospitals.” She further said.

Photo Source: https://699pic.com/-500985021

The issuance of National Action Plan for Containing Microbial Drug Resistance (2022-2025) this year gives a positive signal to Staphylococcus Aureus Vaccine. The Action Plan clearly states that “new drugs, vaccines, innovative medical devices, etc. that are urgently needed in clinical practice for the prevention, diagnosis and treatment of drug-resistant infections should be prioritized for review and approval in accordance with procedures”, and the goal of “continuous reduction in the incidence of drug-resistant bacterial infections in medical institutions and community-acquired bacterial infections”. If the policy is implemented, it is expected to promote the marketing process of Staphylococcus Aureus Vaccine.

If all goes well, OLYMVAX will become the first company in the world to successfully develop the Staphylococcus Aureus Vaccine. It is worth mentioning that the five pathogens, Staphylococcus aureus, Escherichia coli, Streptococcus pneumoniae, Klebsiella pneumoniae and Pseudomonas aeruginosa, caused 54.2% of the deaths among the 33 bacteria studied. The study of OLYMVAX involves three of the aforementioned five pathogens.

“The role of the Staphylococcus Aureus Vaccine is to address the global problem of drug-resistant bacteria caused by antibiotic overuse. After its launch, the indications for the Staphylococcus Aureus Vaccine are expected to expand from orthopedic surgery to other indications for nosocomial infection, and it can be applied to the full range of nosocomial infection scenarios.” Ms. Fan Fan analyzed.

From the perspective of economic benefits, it is estimated in the industry that there are more than 50 million hospitalized surgical patients in Chinese hospitals per year, and the infection rate of S. aureus in surgical patients is 5% to 8%. According to the combined administration of postoperative antibiotics and intravenous human immunoglobulin, the theoretical size of this market alone will be more than RMB 10 billion.

In order to break through the dependence on Tetanus Vaccine, Adsorbed, OLYMVAX has increased its R&D investment. According to the company's financial data, the R&D expenses in the third quarter of this year increased by about 110% compared with last year, leading to a decrease in profits. The increase in R&D investment is mainly caused by the establishment of viral vaccine platform of the Company and new influenza vaccine projects added in the third quarter of this year. According to the Company’s accounting policies, R&D expenditure directly related to S. aureus clinical practice has been capitalized.

Fan Shaowen also said that due to product homogenization and capital considerations, OLYMVAX will not expand its product pipelines by merger and acquisition for the time being, but will continue to expand its pipeline and potential varieties mainly through its own R&D strength.