[리포트분석]’If you sell 10,000 won, you will have 5,000 won left.’…Corona vaccine consignment production’great’ sign

[이데일리 김지완 기자]Corona 19 vaccine consignment companies are expected to sit on money cushions.

This is because the ransom price of bio-companies that produced consignment vaccines rose significantly in response to demand that greatly exceeded the global vaccine production capacity. First, companies that entered the consignment production of the corona vaccine showed a high margin of more than 50% by distributing the profit rate to 5 to 5 with the vaccine developer. In the future, there is a growing interest in global vaccine developers and which domestic pharmaceutical companies will enter into consignment production.

According to UNICEF and the pharmaceutical bio industry on the 4th, by the end of last month, the total supply contract volume, such as confirmed and options, by governments, COVAX, and vaccine companies was confirmed to be 14.7 billion doses (for 7.8 billion people). The 14.7 billion dose is the amount that the entire world population can get the vaccine once.

A researcher at SK Bioscience who is researching the Corona 19 vaccine.[사진=SK바이오사이언스]

◇ Can’t produce 14.7 billion doses, even if it’s good enough to secure consignment producers

Even if vaccine developers fully operate their own production facilities and utilize all of the operating facilities of consignment-produced bio-companies, 11 billion doses is the maximum output. Even at the end of the year, the maximum dose of 13 billion won is reached. It is concluded that the required amount of 14.7 billion dose cannot be met.

Eventually, vaccine developers’ production capacities are not digesting the supply, leading to competition for securing outsourced producers. An official in the bio industry said, “AstraZeneca has a long history in the pharmaceutical industry, but it is the first time to develop a vaccine. NovaVax was listed on NASDAQ in 2018 and has a short history and is a specialized R&D company that lacks production capabilities. Both companies are in a situation where they are forced to transfer technology and commissioned production because their production bases are not large.”

In fact, it was confirmed that AstraZeneca and NovaVax produced only 27% and 41% of the COVID-19 vaccine, respectively. Pfizer’s COVID-19 vaccine also produces only 41% of its own. The rest of the volume is in the hands of consignment producers in each country.

◇ Margin exceeded 50% as the ransom price of consignment producers increased

Consignment producers are being treated as valuable as vaccine supply is not favourable. Vaccine developers are giving bundles of money to consignment producers and begging them to produce their own vaccines. This is confirmed by the earnings of Emergent Bio and Catalent, which began to be reflected in sales from the second half of last year by consigning the Corona 19 vaccine early.

[갈무리=KTB투자증권]

Immulgent showed an operating margin of 62% in the vaccine consignment development and production (CDMO) sector last year. This number is even more surprising, as the main product was the Astrezeneca vaccine, which had the lowest vaccine supply price.

Cataland also recorded an operating margin of more than 50% in the corona vaccine. Last year, Cataland signed contracts for consignment production of corona vaccines (CMO) with five companies, including AstraZenica and Modena. In the fourth quarter of last year (Korean standards), Catalan’s operating margin was 34%, significantly exceeding the average of 23% in the previous eighth quarter. The reason for the sudden increase in operating margin was analyzed because the margin for the consignment production of the corona vaccine exceeded 50%.

◇ Prospect of SK Bio and Green Cross’Quantum Jump’

Naturally, the market is attracting attention to SK Bioscience, which has signed a consignment development and production contract for Corona 19 vaccine, and Green Cross, which has an imminent consignment production contract. This is because it has been revealed that the consignment production of the corona vaccine is’a business where 5,000 won is left after selling 10,000 won’.

Stock price reaction is hot. KTB Investment & Securities raised its target price from KRW 390,000 to KRW 590,000. Following the distribution of modders and vaccines, the target was raised as a basis for the validity of consignment production contracts with many vaccine developers. Looking at the case of Emergent and Catalyst, it was predicted that an operating margin of 50% or more of sales would occur regardless of whether it was commissioned development or commissioned production.

A Green Cross official said, “We are discussing consignment production with multiple vaccine developers including Modena.” In November of last year, Green Cross completed a consignment production facility with an annual capacity of 1 billion doses in Ochang, Cheongwon-gun, Chungcheongbuk-do.

On this day, KTB Investment & Securities announced that SK Bioscience, which is scheduled to be listed on the KOSPI on the 18th, has no valuation burden even if the public offering is decided at the highest price. In addition, it is estimated that this year, SK Bioscience’s NovaVax-related sales will reach 700 billion won.

This calculation is based on the supply price of $16 (17,600 won) for 40 million doses the government has committed to purchase. If AstraZeneca vaccine sales are added to this, it is predicted that a quantum jump in earnings will be possible. SK Bioscience’s cumulative sales for the first to third quarters of last year were 158.6 billion won.

KTB Investment & Securities said, “The domestic government-introduced NovaVax vaccine domestic supply price was found to be comparable to the global price.” SK Biosciences signed a contract with AstraZeneca and NovaVax, a CMO and CDMO for the COVID-19 vaccine that was signed in July-August last year.