COVID-19 vaccine developer CanSino Biologics seeks to raise 5.2 billion yuan ($742 million) in a secondary public offering via the STAR Market, a Nasdaq-like market in Shanghai. China-based CanSino Biologics plans on selling 24.8 million new shares at 209.71 yuan each, representing the second-highest share price on this new tech board. The TrialSite reported that the vaccine maker has been shopping for countries to conduct Phase 3 clinical trials. The data behind its product has been frankly so-so while it capitalized on Canadian connections (founders worked there) to close a national vaccine supply deal only to be held up by Canadian/Chinese politics. There is trouble in Tianjin.
Trouble in Tianjin?
This venture, founded in 2009 with the best intentions (bring China’s vaccine development on par with other developed nations), has generated no revenue while accumulating losses of 370 million yuan. Caixin’s Liu Denghui and Denise Jia report that they seek to use 1 billion yuan to “expand its production base, develop new vaccines, construct a cold-chain logistics system, and improve its IT infrastructure.”
Founder Qiu Dongxu reports that although the company’s initial COVID-19 vaccine was partially developed with Chinese government assets, their global Phase 3 clinical trials will likely be funded via private financing, a markedly different approach than in the U.S. where billions of public dollars are allocated to vaccine makers.
Denghui and Jia remind readers that the company has no real commercialization experience as well. So although they have multiple vaccine candidates in the pipeline, most are in Phase 1 clinical trials or even preclinical research. CanSino Biologics did co-develop an Ebola vaccine with a Chinese military research unit, but thus far only for military reserves with none sold commercially.
Ironically, a similar situation unfolds here. The Chinese military has exclusive access to the vaccine for the year while the company is placed in the difficult predicament of having to compete openly against what the TrialSite predicts will be understood to be better investigational products on the global Phase 3 clinical trials stage. It could very well end up that the CanSino Biologics vaccine ends up as stockpile for China’s military operation, and that’s about it.
The TrialSite reported that the company is shopping for countries to host the Phase 3 pivotal trial from Russia and Brazil to Saudi Arabia and Chile. Follow the link for a more detailed breakdown of why there is trouble in Tianjin.
In one piece of good news for the company, they managed to structure a deal with Pfizer, where the U.S. giant will promote the company’s meningitis vaccine product (Menhycia) in China. However, this deal hasn’t yet been approved by China’s National Medical Products Administration.
The Canadian Lesson
Landing Canada as a national customer is a deal of the Century and is an understatement for a company like CanSino Biologics. After all, the idea for the company was conceived there when Chinese nationals working there envisioned a company that could raise the bar of vaccine development in China. That the Chinese military unit helped co-develop Ad5-nCOV and that the Chinese government could point to one of its own indigenous companies to supply the entire county with a COVID-19 vaccine product should be of paramount importance and priority. After all, Canada isn’t just some small country. It’s the second-largest trading partner to the United States after China; it’s the 10th largest economy in the world (with only 37.6 million people); and at least to some sources ranks, it has the highest quality of life in the world. This was to not only put CanSino Biologics on the business map, but to propel them to stardom.
But trouble brewed as political tensions mounted vaccine supply was held up at Chinese customs thousands of miles across the Pacific from the Halifax clinical investigational site conducting the study. No real answers were given, but the general message was clear: if you seek to do business, politics better be in alignment. The TrialSite reported on July 17 that the delay continued. Now in August, this crisis doesn’t appear resolved as Politico just reported that “The Trudeau government is considering its options as wealthy countries begin to make big bets by preordering hundreds of millions of doses of potential vaccines.”
A major embarrassment to the Canadian government, the Ad5-nCOV deal that is, and a lesson for those who want to structure vaccine deals with CanSino Biologics or companies that are beholden to political forces in that part of the world.
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