Decline in batch issuance and corporate pressure, is the HPV vaccine market cooling down?

Ask AI · How does the loosening of cooperation between Zhifei Biological and Merck & Co. affect industry competition?

21st Century Business Herald Reporter Han Liming Intern Jiang Yutong

China’s HPV (human papillomavirus vaccine) market is undergoing significant adjustments.

According to preliminary statistics from the China Food and Drug Administration disclosed by the China Institute for Food and Drug Control, in the first quarter of 2026 (up to March 29), there were 27 batches of HPV vaccine approvals, including 16 batches of bi-valent HPV vaccines approved for Yuxi Zeyuan Biological, and 9 batches of nine-valent HPV vaccines approved for Wantai Biological; compared to 45 batches of HPV vaccines approved in the first quarter of 2025, this shows a sharp decline.

In fact, competition in China’s HPV vaccine market has entered a fierce stage, with industry downturn continuing to spread. Recently, Wantai Biological disclosed in its earnings forecast that in 2025, the company’s net profit attributable to the parent is expected to lose 330 million to 410 million yuan. Among them, the bi-valent HPV vaccine was affected by Merck’s nine-valent HPV vaccine age extension, significant price cuts in government procurement, and insufficient consumer demand, leading to issues such as near-expiry products being unsellable and inventory not being liquidated, with an overall estimated impact on net profit of about 500-600 million yuan, becoming one of the main reasons for a sharp decline in profit during the period.

Watson Bio also stated directly in its 2025 annual report that the competitive environment in the HPV vaccine market has changed. Based on impairment testing valuation reports, an impairment provision of 76.2951 million yuan was made for intangible assets related to HPV vaccines, further reflecting the operational pressure faced by companies during industry adjustments.

Against this backdrop, Zhifei Biological, which once relied on Merck’s exclusive agency rights for HPV vaccines in China and was a leader in this field, also announced recently that it signed a “Revised and Restated Supply, Distribution, and Co-Promotion Agreement” (hereinafter referred to as the “New Agreement”) with Merck. Under the new agreement, Merck will supply Zhifei Biological with three products: the nine-valent HPV vaccine (Gardasil 9), the pentavalent rotavirus vaccine (Lerede), and the 23-valent pneumococcal polysaccharide vaccine (NumoFa).

Notably, the new agreement no longer includes the supply of the quadrivalent HPV vaccine and cancels the original agreement’s baseline procurement amount for the products. Both parties will negotiate and confirm procurement and supply plans based on market demand expectations and actual vaccination situations, with Zhifei Biological rolling procurement of the agreement products accordingly. Zhifei Biological also stated in the announcement, “The performance of this agreement will help enhance the company’s risk resistance and reduce related risks caused by market uncertainties.”

Cooperation “Loosening”

Zhifei Biological’s partnership with Merck dates back to 2011. At that time, Zhifei Biological signed a “Market Promotion Service Contract” with Merck, becoming Merck’s market promotion service provider in mainland China, responsible for promoting “Muerkang” (measles, mumps, and rubella combined vaccine) and “NumoFa” (23-valent pneumococcal polysaccharide vaccine) in mainland China.

In 2012, the two parties signed a “Supply, Distribution, and Co-Promotion Agreement” for the quadrivalent HPV (Gardasil), stipulating that after the product’s launch, Zhifei Biological would be responsible for its import, promotion, and sales in mainland China, with a baseline procurement plan: about 1.14 billion yuan in the first year, 1.48B yuan in the second year, and 1.85B yuan in the third year.

In April 2018, Merck’s nine-valent HPV vaccine was approved for listing, suitable for females aged 16 to 26. In May of the same year, Zhifei Biological signed a supplementary agreement with Merck to include the nine-valent HPV vaccine in the cooperation scope in the Chinese market.

According to Zhifei Biological’s disclosed announcement, the two sides further clarified the baseline procurement amount for HPV vaccines: in 2019, the comprehensive baseline procurement amount was 5.51B yuan; in 2020, 8.38 billion yuan; and in 2021, 4.165 billion yuan.

In 2023, the two parties signed a “Supply, Distribution, and Co-Promotion Agreement” explicitly stating that during the agreement period, Zhifei Biological would continue to purchase HPV vaccines, pentavalent rotavirus vaccines, and other products from Merck. The baseline procurement amount for HPV vaccines (Gardasil 9 and Gardasil) in the second half of 2023 was 8.38B yuan, 2024 was 4.17B yuan, 2025 was 21.41B yuan, and 2026 was 32.63B yuan. The agreement specifies that the baseline procurement amount can be adjusted through negotiation based on actual circumstances, with the term lasting until December 31, 2026.

However, more than eight months before the agreement’s expiration, Zhifei Biological and Merck have already amended the cooperation terms in advance. Under the new agreement, the parties no longer specify a baseline procurement amount for the products but instead evaluate and adjust procurement and supply volumes dynamically based on market demand, with specific procurement details subject to written orders confirmed by both sides.

Zhifei Biological’s disclosed data shows that in 2023, its agency of Merck’s quadrivalent HPV vaccine had a total batch approval volume of 10.3434 million doses, down 26.27% year-on-year, while the nine-valent HPV vaccine batch approval volume reached 36.5508 million doses, a significant increase of 136.16%. Entering 2024, the market situation sharply deteriorated, with the quadrivalent HPV vaccine batch approval volume dropping to 26.03B doses, down 95.49% year-on-year, and the nine-valent HPV vaccine batch approval volume at 31.1408 million doses, down 14.8%. In the first half of 2025, the quadrivalent HPV vaccine did not receive any batch approvals, and the nine-valent HPV vaccine batch approval volume was 4.2388 million doses, a decrease of 77.38% year-on-year. Meanwhile, in February 2025, Merck announced a suspension of HPV vaccine shipments to the Chinese market.

Operational pressures ultimately impacted performance. Merck’s financial report shows that in 2025, sales of HPV vaccines in China amounted to $200 million, a nearly 95% decrease from $3.5 billion in 2024. Merck also expects that sales of the Gardasil series in China will not see significant growth in 2026.

Zhifei Biological also explicitly stated in its 2025 earnings forecast that its net profit attributable to the parent is expected to lose between 17.89B and 466k yuan, marking its first annual loss since listing. The company clarified that the core reasons for the loss include: sales of main products falling short of expectations, performance under pressure year-on-year; insufficient anticipation of market demand changes, with some inventory nearing expiry or expired, leading to a lower net realizable value than the book value of inventory, requiring inventory impairment provisions.

Industry reshuffle intensifies

Currently, seven HPV vaccines have been approved for listing in China, including three bi-valent, two quadrivalent, and two nine-valent vaccines. Besides Merck and GSK, there are Wantai Biological, Watson Bio, and China National Pharmaceutical Group Chengdu Biological Products Institute. However, according to the latest annual reports disclosed by multiple pharmaceutical companies, the operational situation in the HPV vaccine market is not optimistic.

In fact, the prices of domestic bi-valent HPV vaccines have been continuously falling in recent years. In March 2024, Wantai Biological’s bi-valent HPV vaccine won a government procurement bid in Jiangsu at a price of 86 yuan per dose, breaking the 100-yuan mark for the first time. In August of the same year, Watson Bio’s bid price for the bi-valent HPV vaccine in Shandong was as low as 27.5 yuan per dose.

Industry insiders say that relying solely on price cuts to seize market share is unsustainable; short-term sales may increase, but long-term R&D investment capacity will be dragged down. Companies must develop higher-tier vaccines, create technological barriers, and survive the industry reshuffle. To counteract the vicious price wars, the China Vaccine Industry Association issued a proposal in November 2025, calling for a strict ban on bidding below cost.

However, the industry also benefits from policy support. In November 2025, the National Center for Disease Control and Prevention and six other departments announced that bi-valent HPV vaccines would be included in the immunization program, providing free vaccination for eligible girls. The procurement budget for this centralized purchase was about 425 million yuan, with a purchase volume of 15.4465 million doses, creating a sustained demand of about 9.3 million doses annually. Industry experts believe this policy provides stable market demand for domestic bi-valent HPV vaccine companies.

Moreover, the bid price of 27.5 yuan per dose pushes companies to reduce costs through scale effects and accelerates their transition to higher-priced HPV vaccines and other innovative vaccine tracks. Public information shows that Shen Zhou Xue Bao SCT1000, the world’s first 14-valent HPV vaccine entering clinical research, has completed the third dose of phase III clinical trials and is in the follow-up stage.

Zhifei Biological also emphasized in its 2025 performance forecast that it will accelerate the listing of self-developed products and strengthen scientific research efforts to further optimize revenue structure. In 2026, the company will make every effort to improve operations and strive for more自主产品上市.

Additionally, domestic vaccine companies are accelerating their overseas market布局. Wantai Biological’s bi-valent HPV vaccine has passed WHO-PQ certification and has obtained market access in 23 countries and regions including Morocco, Nepal, and Thailand. Watson Bio also stated in its 2025 annual report that during the reporting period, overseas revenue exceeded 522 million yuan, with product exports earning 517 million yuan, a year-on-year increase of 37%. The bi-valent HPV vaccine has also received an import license from Nepal’s Ministry of Health and Population.

A securities analyst told 21st Century Business Herald that for vaccine companies, relying on a single product, agency model, or channel advantage is no longer sustainable. Only by focusing on innovative R&D, creating core competitive exclusive products, and accelerating overseas expansion to seize immunization planning market opportunities can they stabilize their position amid industry adjustments.