Gov't orders boost vaccine makers

A woman checks the first batch of H1N1 vaccine in the center for disease control and prevention in Yangzhou, Jiangsu Province last week. Altogether 90,000 doses of H1N1 vaccine were distributed to Yangzhou for free. Photo: CFP

By Chen Yang 
 
Domestic vaccine companies are benefiting from the government's surging orders for A (H1N1) vaccines, but analysts warn their performance is directly related to the spread of the flu.

The Ministry of Industry and Information Technology has ordered over 42 million doses of vaccines from seven domestic producers since Monday, including more than 11 million from Henan-based Hualan Biological, 5.19 million from Beijing-based Sinovac Biotech, and around 3 million from Beijing-based Tiantan Biological. All the orders are due for delivery by December 12.

A total of 26 million doses will be delivered by the end of October, and another 100 million doses will be ordered by the end of this year, said Deng Haihua, spokesman of the Ministry of Health, at a September press conference.

The 126 million doses of the vaccine purchased by the government will cover about 10 percent of the country's population, said Guo Fanli, an analyst at Shenzhen Zhongzhe Investment Consultant (SZIC), adding that this rate is still lower than the 30 percent in developed countries including the US.

Only eight Chinese companies are qualified to produce A (H1N1) vaccines, and their productivity does not compare with their foreign counterparts such as Swizerland's Novartis Pharmaceuticals, which could produce 180 million to 240 million doses per year, said Liu Peicheng, spokesman of Sinovac Biotech.

Liu said his company could reach a yearly production capacity between 20 million and 30 million, the average level of the eight companies. Hualan Biological, which has received the largest order, could reach a yearly production capacity of 90 million.

SZIC's Guo said the government would speed up its vaccine orders, as fears escalate of a large-scale outbreak of A (H1N1) flu triggered by the rising number of cases in the US.

The government's purchase price of the vaccine is 22 yuan ($3.2) per dose, and they are provided to the public for free. In the global market, the vaccines are sold at around 100 yuan ($14.7) per dose.

"Our company can earn high profits by producing A (H1N1) vaccines because of government demand," Sinovac Biotech's Liu said.

He added the production of A (H1N1) vaccines would not affect their company's other business. "Our ordinary flu vaccines, which share the same production facilities with A (H1N1) vaccines, are produced between February and July. We began to produce A (H1N1) vaccines late July," he said.

"However, investors should not be too optimistic about the vaccine sector, as their performance will depend on how A (H1N1) expands in the future," said SZIC's Guo, adding that the government orders could help brand recognition.

on Wednesday's stock market reflected investors' caution toward vaccine producers. Hualan Biological dropped 1.82 percent to 56.65 yuan ($8.33), and Beijing Tiantan fell 3.75 percent to 28.51 yuan ($4.19).

The A (H1N1) influenza will raise people's awareness of vaccine injections, and thus benefit the vaccines industry in the long term, said Sinovac Biotech's Liu.

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