Analysis: China’s Vaccine Giants Suffer Post-Pandemic Hangover

[para. 1] China's vaccine industry experienced a dramatic downturn in the first half of 2025, following years of significant investment and soaring profits. Previously benefitting from immense demand during the COVID-19 pandemic and subsequent HPV vaccine boom, the industry now faces sharp losses, evaporating profits, and an investor exodus. The decline is primarily driven by fading pandemic demand, an oversupplied domestic market, and an intense price war that has severely eroded profit margins across the board. This intense competition is forcing companies to seek new avenues, including international expansion and diversification into new pharmaceutical segments like weight-loss drugs. Industry insiders note that the easy profits are gone, with major vaccine categories saturated and the declining birth rate compounding the problem, forcing the sector into uncharted and challenging territory[para. 2][para. 3].

[para. 4][para. 5][para. 6] The largest vaccine companies—Wantai Biological Pharmacy, Zhifei Biological Products, and Walvax Biotechnology—suffered the most acute financial pain. Wantai, once the industry's most valuable firm, saw its revenue plummet 38.25% year-on-year to 844 million yuan (about $116.4 million), and swung from profit to a net loss of 144 million yuan—its first-ever midyear loss since listing. Wantai attributed this decline to market adjustments and the widening eligibility for Merck’s rival nine-valent HPV vaccine, which intensified competition. Zhifei, Merck’s exclusive distributor for Gardasil 9 in China, suffered an even steeper revenue decline (down 73.06% to 4.92 billion yuan), recording a net loss of 597 million yuan, reversing a previous profit. Sales volumes for the nine-valent vaccine dropped by 76.8%. Walvax’s revenue fell 19.47% and net profit by 74.69%, also incurring asset impairment charges due to plummeting values for its HPV vaccines.

[para. 7][para. 8][para. 9] The industry’s woes extend beyond HPV vaccines. Price wars now rage in shingles and staple vaccines. "Buy one, get one free" promotions and steep discounts are common. For example, imported shingles vaccines that once cost over 3,000 yuan can be found for 1,650 yuan after massive discounts. These promotions have caused companies like Changchun BCHT Biotechnology to report a 53.93% revenue decrease and a swing to a net loss. Even basic rabies vaccine producers report falling revenue and profit due to domestic competition. Furthermore, the National Health Commission announced that the HPV vaccine will now be included in China’s national immunization program for eligible groups, likely increasing reliance on domestic, lower-priced vaccines for volume but restricting profits.

[para. 10][para. 11][para. 12][para. 13][para. 14] To survive, companies are shifting strategies. There is increasing emphasis on product diversification, developing international markets, and boosting innovation. Walvax is expanding globally, generating 214 million yuan in overseas revenue and exporting vaccines to 24 countries. Zhifei is pivoting towards metabolic disease treatment, notably investing in semaglutide development (used in Ozempic and Wegovy). Wantai’s main shareholder is investing in the medical aesthetics sector, channeling up to 2 billion yuan into human-derived collagen products.

[para. 15][para. 16][para. 17] Despite the challenging environment, some firms are thriving through niche product focus and innovation. Olinvy Biotechnology turned a profit with its tetanus vaccine, which comprises over 90% of its revenue, and is advancing a Staphylococcus aureus vaccine, a feat elusive to global majors. CanSino Biologics is recovering, with revenue up 26% and sharply reduced losses thanks to its unique meningococcal vaccine. Hualan Vaccine, a flu shot leader, saw the fastest revenue growth (up 68.77%), but profits fell due to increased R&D expenditures amid ongoing price wars.

[para. 18] Overall, China’s vaccine industry is undergoing a transformative restructuring. Intense domestic competition, declining profitability, and shifting demand have forced firms to innovate, diversify product lines, and expand internationally to survive. Only those able to adapt to this crucible of competition and innovation are likely to thrive in the years ahead.