Meet the Gardasil billionaires, spawned from Merck vaccine's advance into China market

gardasil
Gardasil 9's recent Chinese approval have boosted local distributor Zhifei Biological Products' share price, and it's rolling out the shot in that country now. (Merck)

Recent Chinese approvals of Gardasil and Gardasil 9 have contributed millions of extra dollars to developer Merck & Co.’s top line. They've also propelled two Chinese families into Bloomberg’s ranking of the world’s richest people.

Jiang Rensheng, chairman of Zhifei Biological Products, which holds Chinese marketing rights to the two HPV vaccines, boasted a net worth of about $4.6 billion Wednesday as share price gains swelled the value of his stake, according to Bloomberg. That ranked him the 41st richest in China, and 415th on the worldwide Bloomberg Billionaires Index—and the latest drug entrepreneur to ride a growing company into the ranks of the world's richest.

Zhifei saw its stock price more than double from about 20 Chinese yuan ($3) last May, when Gardasil cleared local regulatory review, to more than 46 yuan Wednesday, just a few weeks after the newer version of that HPV shot, Gardasil 9, snagged its own nod. Jiang and his son, Jiang Lingfeng, who’s also Zhifei’s vice general manager, together hold a 60% stake in Zhifei.  

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The share price jump also boosted the wealth of former vice chairman Wu Guanjiang, to $1.5 billion. Wu, together with his wife, held 13.4% of Zhifei’s stock. That number might have been larger before, because Wu is in the process of reducing his stake in the company, according to regulatory filings.

The Zhifei wealth shows the power of an emerging market win for a drugmaker. Biopharma companies have fed the personal wealth of their founders not just in developed worlds but in up-and-coming countries like China and India. 

Cyrus Poonawalla, chairman of vaccine maker Serum Institute of India, with $8.16 billion of wealth, ranked 184th on Bloomberg's billionaires list as of Wednesday. Sun Pharmaceutical founder Dilip Shanghvi, with $10.4 billion in net worth, sits at 138th, even though the Indian drugmaker's lackluster performance in the face of U.S. generics business pressure has slashed his worth by $2.4 billion in the past five months.

In China, the chairman of biopharma star Jiangsu Hengrui Medicine was worth $9.21 billion on Wednesday, making him the wealthiest man in China's healthcare industry. Riding on a biotech boom in China and renewed interest in innovative cancer therapies, Hengrui's stock price has jumped from about 52 yuan early this year to 76 yuan by close Thursday.

When Gardasil was approved last May, Zhifei was known to be the sole seller of the vaccine in China, thanks to a deal signed with Merck back in 2012. In a revision of that deal, Zhifei agreed to buy about $85.6 million worth of Gardasil in 2017 and $217 million this year.

After the China Drug Administration waved through Gardasil 9 at unprecedented speed last month, Zhifei quickly renewed its contract with Merck to include the updated vaccine. The shot just rolled out Wednesday in the resort island province Hainan at a government-negotiated price of $203 per dose, and patients need to pay a bit more after certain service fees.

Revenues at Zhifei in the first quarter—the first full quarter it’s been selling Gardasil—skyrocketed more than fourfold to 838 million yuan ($130.7 million), while its profits payable to shareholders also jumped more than 330%. For the same period, Merck also enjoyed 24% Gardasil franchise sales growth to $660 million.

Chongqing, China-based Zhifei has other close business ties with Merck, also responsible for distributing its hepatitis A vaccine Vaqta, pneumococcal vaccine Pneumovax 23, and rotavirus vaccine RotaTeq. Analysts expect Zhifei’s fourfold sales surge will likely continue throughout 2018, according to Bloomberg.