IPO outlook | Tetanus vaccine leader goes to Hong Kong, can Olin Biotech (688319.SH) tell the IPO story well?

Recently, Chengdu Olin Biotechnology Co., Ltd. (“Olin Biotech” for short) officially submitted a listing application to the main board of the Hong Kong Stock Exchange, and CITIC Securities acted as the sole sponsor. If it is successfully listed in Hong Kong this time, Olin Biotech will become another “A+H” vaccine company listed in both places.

Since it was listed on the Science and Technology Innovation Board in June 2021, Olin Biotech (688319.SH) has continued to receive market attention. Since this year, with the overall recovery of the pharmaceutical sector, the company's stock price has been rising since around 10 yuan at the beginning of the year to reaching a high of 34.68 yuan in August. The cumulative increase during this period was more than 200%, and the market is clearly optimistic. Recently, its stock price fluctuated around 25 yuan, and the latest market value was about 9.8 billion yuan.

As the absolute leader in the domestic tetanus vaccine field, Olin Biotech has long occupied about 70% of the market share of the adsorbed tetanus vaccine with its leading product, forming a stable basic revenue market. The company prospectively focused its strategic focus on the two major blue ocean fields of “superbug vaccines” and “adult vaccines,” and built the most comprehensive and fastest progressing superbug vaccine research and development pipeline in China. Among them, the core product, the recombinant Staphylococcus aureus vaccine, has entered phase III clinical phase and is expected to become the world's first marketed superbacterial vaccine, which has significant scarcity and clinical value.

Net profit successfully reversed losses and gross margin remained high

According to public information, Olin Biotech is a global, innovation-driven biopharmaceutical company dedicated to the research, development, production and commercialization of innovative vaccines. The company's strategic focus is on two major unmet medical needs: “superbug vaccines” and “adult vaccines.”

Judging from financial performance, the company's overall revenue has shown an upward trend in recent years, with 547 million yuan, 494 million yuan, 586 million yuan and 305 million yuan (unit: RMB, same) from 2022 to the first half of 2025; net profit for the same period was 265.76 million yuan, 11.442 million yuan, 15.719 million yuan and 13.231 million yuan, respectively. The profit scale was relatively limited and fluctuated significantly.

It is worth noting that in the first half of 2025, revenue increased 35.17% year on year, and net profit to mother reached 13.1969 million yuan, turning a loss into a profit over the same period last year, indicating an improvement in short-term operations. The company's gross margin continues to be high at over 92%, reflecting the strong pricing capacity and cost control level of vaccine products.

At the same time, the company's revenue structure is characterized by a high degree of concentration. Currently, among the three vaccines that the company has commercialized - adsorbed tetanus vaccine, HiB conjugate vaccine, and AC conjugate vaccine, adsorbed tetanus vaccine is an absolute revenue pillar. In 2024, the product's sales revenue reached 536 million yuan, accounting for 90.99% of total revenue, accounting for more than 70% between 2019 and 2023, and has stabilized at more than 90% in recent years.

Relying on this product, the company continued to occupy a leading position with a share of more than 80% in the domestic batch issuance market from 2022 to 2024. However, excessive reliance on a single product also poses potential risks, and once demand fluctuates or competition appears in this market, performance stability will be tested.

In terms of research and development, the company is focusing on building a vaccine pipeline for “superbacteria,” investing heavily in the development of four new Class 1.1 drugs, including the recombinant Staphylococcus aureus vaccine and the oral recombinant Helicobacter pylori vaccine. Among them, the recombinant Staphylococcus aureus vaccine completed the enrollment of 6,000 cases in phase III clinical trials in June 2025. The data is expected to be disclosed in 2026, and mass production will be achieved in 2027; the oral recombinant Helicobacter pylori vaccine has also been approved for phase I clinical trials in Australia.

According to the Zhitong Finance App, in 2024, the company's R&D investment reached 134 million yuan, an increase of 17% over the previous year, making it one of the company's important expenses. Meanwhile, the R&D team expanded accordingly from 59 people in 2020 to 136 people at the end of 2024.

In terms of market channels, Olin Biotech's sales network has covered 30 provinces, municipalities and autonomous regions in China. As of the same day, the company has established direct commercial relationships with more than 2,000 district and county disease control centers. One or more of the company's three commercial vaccine products are available at about 8,100 vaccination sites (including about 2,400 general hospitals) across the country.

Notably, the company's cash flow situation is clearly under pressure. The net cash flow from operating activities in 2024 was -9.732 million yuan, and the net cash flow from investment activities was 224 million yuan. Although it received funding of 95.9074 million yuan through fund-raising activities, it still showed that its hematopoietic capacity was insufficient. The net cash flow from operating activities in the first half of 2025 was -0.2 billion yuan, and financial pressure continues.

A new blue ocean of superbug vaccines fills a gap in the market

Tetanus is an acute, specific, and toxic disease characterized by continuous tonic contraction and paroxysmal spasms of skeletal muscle throughout the body caused by Clostridium tetanus invades the body through skin or mucous membrane breaks, multiplies in an anaerobic environment and produces exotoxins. In the absence of medical intervention, the case fatality rate is close to 100%.

The Zhitong Finance App learned that the number of cases of tetanus in the world every year is about 1 million, and the number of deaths is 300,000 to 500,000. Although China eliminated neonatal tetanus in 2012, non-neonatal tetanus is still a serious public health problem.

The tetanus vaccine market in China has shown a rapid growth trend in recent years. The market size rapidly expanded from 200 million yuan in 2019 to 800 million yuan in 2024, with a compound annual growth rate of 40.2%. Driven by the deepening of population aging and the continuous expansion of prevention application scenarios, the market size is expected to further increase to 2.6 billion yuan by 2035. The compound annual growth rate will remain 10.8% from 2024-2035, and the market has long-term growth potential.

Tetanus active immunization agents are tetanus toxoid vaccine (TTCV), adsorbed tetanus vaccine, adsorbed diphtheria tetanus vaccine (for adults and adolescents), adsorbed diphtheria tetanus combination vaccine (“white burst” for short), adsorbed cell-free leukocyte vaccine (“white vaccine” for short), cell-free hemophilus influenzae type b combination vaccine (“quadruple vaccine” for short), adsorbed acyclic tetanus influenzae type b combined vaccine (“quadruple vaccine”) Varieties such as prostatitis and Haemophilus influenzae type b (conjugate) vaccine (“penta-conjugate” for short).

As of the latest statistics, there are seven approved tetanus vaccines in China, and the market shows a highly concentrated pattern. Among them, Olin Biotech occupies a leading position. The market share of adsorbed tetanus vaccine reached 69.5% in batches in 2024, while the Wuhan Institute of Biological Products ranked second with a 30.5% share. Together, the two occupy the vast majority of the market.

In recent years, the country has continued to increase its support for the development of the vaccine industry. The “Non-Neonatal Tetanus Diagnosis and Treatment Specification” issued by the National Health and Health Commission in 2024 included vaccine prevention in the text of the regulation for the first time, clarifying the status of vaccination in clinical practice at the policy level, and laying a solid institutional foundation for the further promotion of tetanus vaccine on the medical side.

As antibiotic abuse becomes more prominent, multiple drug-resistant bacteria (or “superbacteria”) continue to emerge, posing a huge challenge to global anti-infective treatment and hospital infection control. In this context, vaccines that can prevent infections at the source, especially vaccines against superbugs, have become a highly strategic research direction, and the market potential is huge.

Olin Biotech accurately anchors the focus of research and development in the two major fields of “superbacterial vaccines” and “adult vaccines” where there are major unmet clinical needs, forming a “hierarchical order, key breakthroughs, and multiple product reserves”. The company has systematically laid out five innovative Class 1.1 vaccine candidates for various superbacteria. It is currently one of the companies with the most complete domestic “superbacteria” vaccine layout.

The company's pipeline covers five key pathogens: recombinant Staphylococcus aureus vaccine against Staphylococcus aureus, which is classified as “high priority” by WHO; an oral recombinant vaccine against Helicobacter pylori, which is also a “high priority”; vaccine against Pseudomonas aeruginosa and Acinetobacter baumannii, a vaccine against “medium priority” group A.

Furthermore, the company is actively exploring the development of combined vaccines that can cover a variety of bacterial targets, with the aim of achieving broad protection against multiple drug-resistant infections. Since there are no similar products on the market worldwide, the market prospects for this series of vaccine candidates are extremely broad.

Looking at the development progress, the company's fastest progressing recombinant Staphylococcus aureus vaccine has completed the enrollment of all phase III clinical subjects and entered a 180-day observation period. It is expected that the blindness will be revealed by the end of 2025, and the data will be read out in early 2026. The vaccine is expected to become the world's first superbug vaccine, achieving a “zero breakthrough” in this field of products, which is a landmark.

In addition to the superbacterial vaccine, the company's R&D pipeline also covers various products such as oral recombinant Helicobacter pylori vaccine, quadrivalent influenza virus lytic vaccine (MDCK cells), and recombinant Acinetobacter baumann vaccine, forming a stable long-term reserve at multiple levels.

Overall, Olin Biotech's core product adsorbed tetanus vaccine is expected to maintain steady growth and provide sufficient cash flow for overall development. At the same time, the company is betting on the “adult vaccine” and the “superbug vaccine” on two tracks with high growth and high clinical demand, and has built the most cutting-edge and comprehensive superbacterial vaccine pipeline in China, with a long-term strategic first-mover advantage.

However, the company has a single revenue structure and significant cash flow pressure, and its resilience to risks needs to be strengthened. Subsequently, the company still faced multiple challenges such as clinical data, approval, production and commercialization.