Is the market for the next HPV vaccine about to change?

In the vaccine market, not only the HPV vaccine stands out, but also the shingles vaccine, hailed as the "HPV vaccine for middle-aged and elderly."

In 2023, GSK's Shingrix continued to dominate as a global blockbuster vaccine, achieving sales of up to £3.446 billion (approximately RMB 31.4 billion). In the Chinese market, Changchun BCHT Biotechnology's shingles vaccine reached RMB 882 million in sales in just nine months, with even stronger momentum than Shingrix initially had.

To reclaim lost market share, GSK handed over the Chinese sales rights for Shingrix to domestic vaccine leader Zhifei Biological. Meanwhile, more domestic shingles vaccines are about to flood the market, setting the stage for a fierce battle.

01

Nearly RMB 900 Million in Sales in 9 Months,

China's Shingles Vaccine Market "Is Changing"

So far, four shingles vaccines have been approved globally: Merck's Zostavax, GSK's Shingrix, SK Chemicals' SkyZoster, and Changchun BCHT Biotechnology's Ganyu.

Zostavax, the world's first shingles vaccine, was approved in 2006 and peaked at $765 million in sales in 2014.

However, as Zostavax uses a live-attenuated technology with lower efficacy (69.8% for ages 50-59) compared to GSK's recombinant protein vaccine Shingrix (97.2% for ages 50+), it lacked competitiveness and was discontinued in 2020.

Shingrix also boasts impressive long-term efficacy.

Recent GSK follow-up data shows Shingrix maintains over 82% efficacy after 11 years in adults 50+, with cumulative efficacy of 79.7% (ages 50+) and 73.1% (ages 70+) between years 6-11.

Shingles vaccine efficacy comparison by age group

Sources: Expert Review of Vaccines, Shingrix prescribing information, Dingxiangyuan, Minsheng Securities Research

In China, Shingrix launched in June 2020 and long held monopoly until Ganyu's approval. Currently, these two vaccines dominate the market.

Though Ganyu shares Zostavax's live-attenuated approach (lower efficacy than Shingrix), its single-dose regimen (vs. Shingrix's two doses) and lower price (~RMB 1,400 vs. ~RMB 3,200 total for Shingrix) appeal to broader demographics (40+ vs. Shingrix's 50+).

Ganyu's RMB 900 million sales in nine months outpaced Shingrix's early performance, now contributing 48.36% of BCHT's 2023 revenue (RMB 1.825 billion, +70.3% YoY). Net profit surged 176% to RMB 501 million, with Q1 2024 growth continuing (+50.64% revenue, +229.5% net profit).

BCHT's aggressive sales strategy (coverage in 30 provinces by 2023) and GSK's response—a brewing battle—set the stage for market upheaval.

02

GSK Partners With Zhifei Biological:

Can It Defend Its Throne?

Shingrix is both GSK's blockbuster and a global vaccine leader—sales grew from $1.05 billion (2018) to $4.36 billion (2023).

But in China, GSK struggles against local rival BCHT. Shingrix's 2020-2022 China sales (RMB 487M/600M/1.2B) were dwarfed by Ganyu's RMB 900M in nine months.

GSK's lack of local expertise prompted a strategic shift: in October 2023, it granted Zhifei Biological exclusive Shingrix distribution rights with a three-year purchase target of RMB 20.64 billion (RMB 3.44B for 2024).

GSK-Zhifei shingles vaccine agreement

Source: Zhifei Biological announcement

Zhifei's 3,400+ salesforce and nationwide coverage (31 provinces, 30,000+ health sites) boost GSK's odds—but BCHT's cost and dosing advantages remain formidable.

03

More Domestic Vaccines Are Coming

Lvzhu, Ribobio, CanSino...

China's shingles vaccine penetration is low (0.1% in 2021 vs. 26.8% in U.S.), but rapid growth is underway: Q1 2024 saw 25 batch releases (12 Ganyu, 13 Shingrix), nearing 2023's full-year total (39).

Source: NIFDC, Insight, CITIC Securities Research

With aging populations and rising cases (6 million annually), China's market may hit RMB 10.8B (2025) and RMB 28.1B (2030). Over 10 candidates are in development:

- Lvzhu Biological's LZ901 (Phase III, unique tetramer design, 40+) plans 2025 launch.

- Ribobio's REC610 (Phase I/III, novel adjuvant BFA01) shows promising early data.

- mRNA (Jiachen Xihai, Pfizer, Moderna) and adenovirus (CanSino) candidates are in early trials.

China shingles vaccine R&D landscape

Sources: Dingxiangyuan, company websites, Huatai Research

04

Conclusion

The race for shingles vaccine supremacy hinges on innovation and speed. Early entrants like BCHT and GSK-Zhifei hold advantages, but novel candidates could disrupt the duopoly.

$BCHT(688276.SH) $ZHIFEI-BIOL(300122.SZ) $LUZHU BIOTECH-B(02480.HK) 

References:

1. Company reports/announcements

2. "The 'HPV Vaccine for Elderly'—Strike While the Iron Is Hot," Amino Observation, 2024-04-18

3. Minsheng Securities/CITIC Securities/Huatai Securities research