Watson Biologics plans to sell domestically produced influenza vaccines overseas

AI’s collaboration this time: What impact will it have on the trend of vaccine exports?

Jiemian News Reporter | Chen Yang

Jiemian News Editor | Xie Xin

In China’s vaccine industry, after domestic companies act as agents to sell imported vaccines from multinational pharmaceutical companies and help domestic peers sell their products, there are also cases where domestic companies acquire overseas rights to domestic vaccines and assist peers in going global.

After market close on March 13, Watson Biotech and Zhonghui Yuantong (H-share name Zhonghui Biotech) announced a strategic overseas market cooperation. Both parties agreed that Zhonghui Yuantong designates Watson Biotech’s wholly owned subsidiary, Hong Kong Watson, as the exclusive partner for the international development of its trivalent influenza virus subunit vaccine in designated regions (excluding the Philippines and Macau, including public and private markets). Watson Hong Kong will handle registration, promotion, and sales of the product within these regions.

According to the announcement, the agreement is valid for seven years from the effective date. If within one year of signing the agreement, the parties do not reach specific regional cooperation agreements for any region, either party has the right to unilaterally terminate the agreement without penalty.

Watson Biotech stated that this agreement is a preliminary cooperation agreement and will not have a significant impact on the company’s financial status, operational results, or performance expectations for this year. The impact on future performance will depend on subsequent cooperation details.

On March 16, Watson Biotech’s stock price fluctuated slightly, closing at 12.28 yuan per share, up 1.82%, with a current market value of 19.6 billion yuan. Zhonghui Yuantong’s stock price dropped nearly 20%, closing at 46 Hong Kong dollars per share, with a current market value of 18.1 billion Hong Kong dollars.

Currently, due to factors such as economic downturn, declining birth rates, and increasing competition from star products, the domestic vaccine industry is becoming increasingly competitive and is in a downturn. Seeking larger markets abroad has almost become an inevitable choice, but it is not easy.

Looking at both sides of this cooperation, Zhonghui Yuantong was founded in 2015 and listed on the Hong Kong Stock Exchange in August 2025. It is a relatively young company. Its core products are the quadrivalent influenza virus subunit vaccine and lyophilized rabies vaccine for humans (human diploid cell). The former was approved for market in 2023 and is currently the only fully approved quadrivalent influenza virus subunit vaccine for all age groups in China.

In fact, influenza vaccines are mature products with many competitors. Compared to more common split vaccines, subunit vaccines are safer, have lower adverse reaction risks, and are priced higher.

Domestic influenza vaccines and prices. Jiemian News screenshot from CITIC Securities Research Report, August 2025

By the end of 2025, the quadrivalent influenza virus subunit vaccine is the only product commercialized by Zhonghui Yuantong, with several other products in clinical development.

Financially, in 2024, Zhonghui Yuantong’s revenue was 284 million yuan, with a net loss attributable to shareholders of 259 million yuan. According to the 2025 performance forecast, the company’s revenue is expected to be about 446 million to 493 million yuan, a year-on-year increase of approximately 71.8% to 89.9%; net loss is estimated to be about 157 million to 197 million yuan, a reduction of 23.9% to 39.3%. In other words, the company is not yet profitable.

Additionally, the announcement disclosed that in December 2024, Zhonghui Yuantong licensed its quadrivalent influenza vaccine to Watson Biotech’s subsidiary for overseas代理, and the代理业务 is currently ongoing.

In other words, the cooperation on the trivalent influenza vaccine announced this time can be seen as a continuation of the overseas代理 of the quadrivalent vaccine mentioned earlier, complementing both parties’布局 in the overseas influenza vaccine market. Previously, this trivalent vaccine was approved domestically in January 2026 and is currently the only approved trivalent influenza virus subunit vaccine suitable for all people aged 6 months and above in China.

On the other hand, Watson Biotech is an established player in the vaccine industry with extensive experience in going global. This is why Zhonghui Yuantong values Watson Biotech. The former also needs overseas market growth to offset domestic market performance declines.

According to Watson Biotech’s mid-2025 report, the company’s products have been exported to 24 countries and regions, with a total export volume of over 63 million doses. In the first half of 2024 and 2025, Watson Biotech’s overseas revenue was 570 million yuan and 214 million yuan respectively, accounting for about 20% of total revenue, significantly higher in both absolute and proportional terms compared to peers. Additionally, the 2025 performance forecast shows that the company’s current vaccine export revenue increased by about 35% year-on-year.

Data source: Miaxiang Choice. Chart by Jiemian News Reporter Chen Yang

On March 16, Watson Biotech told Jiemian News that the exclusive rights obtained for Zhonghui Yuantong’s trivalent influenza subunit vaccine will synergize with the company’s already commercialized 13-valent pneumonia conjugate vaccine and bivalent HPV vaccine, forming a richer overseas vaccine product matrix and enhancing the company’s competitiveness in the global respiratory vaccine market.

However, Jiemian News notes that as a product related to public health, many countries require a certain degree of localization in vaccine procurement. Localized packaging technology transfer, rather than merely exporting finished products, will also be a major trend for Chinese vaccine companies going abroad. This may mean more complex合作 and利益分配 arrangements.

On March 16, Jiemian News inquired about Zhonghui Yuantong’s reasons for choosing代理销售 rather than direct海外出海 in this context. The company responded that details are as per the official公告. Watson Biotech also mentioned in this announcement that if Zhonghui Yuantong plans to establish local production in relevant regions after the agreement takes effect, both parties can negotiate friendly合作 on localized production.

In terms of performance, Watson Biotech expects a net profit attributable to shareholders of 160 million to 190 million yuan in 2025, a year-on-year increase of 13% to 34%; non-recurring net profit of 85 million to 99 million yuan, a decrease of 22% to 9%; and revenue of 2.4 billion to 2.43 billion yuan. The company stated that total revenue from vaccine products decreased by about 8% year-on-year. Aside from the overseas revenue growth, domestic vaccine revenue has narrowed in decline and stabilized.

In February 2026, Watson Biotech further reorganized its structure, dividing its domestic and international marketing, and six business units of different vaccine technical routes into three core sectors: vaccines, nutrition, and biomanufacturing, while also exploring new tracks.