Source:
https://scmp.com/business/companies/article/2183042/meet-wuxi-biologics-contract-drugs-maker-believes-it-can-help
Business/ Companies

Meet Wuxi Biologics, the contract drugs maker that believes it can help cure China’s scandal-hit vaccine market

  • Wuxi Biologics is in talks with three separate vaccine developers to manufacture their products in China
  • ‘We already have a globally accepted quality assurance system … we can play a leading role in elevating vaccine standards,’ says chief executive
Mainland China’s human vaccine market amounted to 21.6 billion yuan in 2017, or 11.5 per cent of the global total. Photo: AP

Wuxi Biologics, China’s largest biologic drugs services company, is in talks to sign contracts for the development of three potential vaccinations, in a bid to grab a slice of the nation’s scandal-hit market.

The firm, based in Wuxi, Jiangsu province, is negotiating with three separate vaccine developers on service contracts, said its chief executive Chris Chen Zhisheng. But it does not expect to generate any “meaningful revenue” from them until around 2021.

“The fundamental issues in the industry are quality-control related,” he said in an interview earlier this month on the sidelines of the JPMorgan healthcare conference in San Francisco.

“As the only company in China that can produce biologics biopharmaceutical products for the global market, we already have a globally accepted quality assurance system … we can play a leading role in elevating vaccine standards.”

Biologics, also known as biopharmaceuticals, are drugs produced from or containing components of living organisms. They include blood components, cells and proteins extracted from humans, animals and microorganisms and made into products to treat or prevent a variety of medical conditions.

Wuxi, the fifth biggest contract manufacturer of biologics globally, last year set up a human vaccines manufacturing joint venture with animal vaccines maker, Shanghai Hile Biopharmaceutical. Wuxi owns 70 per cent while the latter owns the remaining 30 per cent.

Chen said Wuxi had been pondering entering the vaccine market for over a year, before the outbreak of a scandal last August – the second in just over two years – that caught the attention of China’s top leaders who promised resolute action to clean up the industry.

The technology and equipment used to develop human vaccines are similar to those for livestock and pet vaccines. Chen said the combination of Hile’s vaccine technology and Wuxi’s quality control expertise will speed up the joint venture’s product development while ensuring quality.

Chris Chen Zhisheng, chief executive of biologic drugs development and contract manufacturing company, Wuxi Biologics. Photo: SCMP Handout
Chris Chen Zhisheng, chief executive of biologic drugs development and contract manufacturing company, Wuxi Biologics. Photo: SCMP Handout
The joint venture’s manufacturing facilities will be capable of making vaccines for treating cancers and other conditions, Wuxi said without elaborating.

Cancer vaccines are a new frontier, with only one product approved and commercialised globally so far, by the American giant, Merck, providing protection against cervical cancer, Chen noted.

The industry has been under fierce scrutiny since Changchun Changsheng Bio-technology was found by authorities in Jilin province to have sold more than 250,000 substandard diphtheria, whooping cough and tetanus vaccines and faked data for 113,000 lots of rabies vaccine.

Mainland China’s human vaccine market amounted to 21.6 billion yuan in 2017, or 11.5 per cent of the global total.

It could grow by an average of 25.2 per cent annually to reach 66.5 billion yuan in 2022 and make up just over a quarter of the global market.

That is according to market research consultancy Frost & Sullivan’s forecast cited in the preliminary listing prospectus of Hong Kong listing candidate Liaoning Chengda Biotechnology, a human vaccine maker.

Vaccines that fall under the government’s free pediatrics immunisation programme made up just 12.6 per cent of China’s human vaccines market by revenue last year. It is dominated by state-owned producers.

The remaining 87.4 per cent of the market, paid for by customers and their insurers, is occupied mostly by private and foreign companies, according to Frost & Sullivan.

Chen said Wuxi, which floated shares in Hong Kong in 2017, expects to complete construction of a 325 million euro (US$370 million) wholly-owned plant in Ireland that will hire 700 staff in the next two years.

The firm, which posted a net profit of 296.7 million yuan in the first half of last year, is considering setting up facilities in continental Europe in two to three years, and plans to serve the US market mainly from facilities in China and Europe, he added.

Wuxi shares finished Monday 1.7 per cent higher at HK$62.5. They have risen 36.6 per cent since January 3, when they hit a one-year low amid a deep sector-wide correction.