SHANGHAI/SUZHOU, China, April 19 (Reuters) - China's

vaccine developers stuck with unused mRNA COVID shots and idle

manufacturing plants are pursuing new targets for the novel

messenger RNA technology, but they face a tough path, crimped by

a lack of revenue.

Three Chinese companies - Walvax Biotechnology,

CSPC Pharmaceutical Group ( CHJTF ) and Stemirna Therapeutics -

came up with mRNA vaccines that won limited emergency approvals

in Asia.

However, Walvax and CSPC are not currently manufacturing

three of their China market shots, a China health official told

Reuters.

And Stemirna said in July it had halted work at a planned

vaccine factory in Shanghai, citing lack of demand.

Their setbacks come just as Moderna, which

developed one of the world's first mRNA vaccines against COVID,

is setting up manufacturing in Shanghai, with plans to launch up

to 15 new mRNA medicines in the next five years and bring up to

50 candidates into clinical trials.

"At the moment China's mRNA is still just taking off," a

spokesperson for CSPC said，referring questions on mRNA plans to

a social media post highlighting a respiratory syncytial virus

(RSV) vaccine candidate's application for clinical trials.

Walvax declined to comment.

MISSED OPPORTUNITY

Walvax working with biotechnology startup Abogen Biosciences

came up with China's first domestically developed mRNA shot, and

received approval from Indonesia in September 2022.

Stemirna and CSPC followed quickly, with Stemirna receiving

approval from Laos, and CSPC and Walvax from China for similar

shots.

However, Indonesia did not purchase Walvax's first shot, an

Indonesia health ministry spokesperson told Reuters, without

explaining why.

And in Laos, where Stemirna's shot has not been sold,

vaccines need World Health Organization (WHO) approval and there

are "enough (COVID) vaccines" for now, Kongxay Phounphenghack,

head of vaccine preventable disease at the Laos health

ministry's Mother and Child Health Center, told Reuters.

None of the Chinese developers sought WHO approval for

their mRNA vaccines, that agency's China office told Reuters.

Construction of a Stemirna plant in Laos is "not yet"

complete, said Davone Duangdany, director of the drug and

medical device control division within the Laos health ministry.

Stemirna's CEO, Li Hangwen, declined to comment.

CSPC's first shot faced limited distribution by health

authorities, partly because it did not target a more recent

variant or had stricter storage and transport requirements than

standard technology shots, staff at some medical institutions in

China's two most populous cities, Beijing and Shanghai, told

Reuters.

That shot was first administered in May 2023. CSPC has not

announced the rollout of its updated shot and Walvax has said it

is seeking further approval for its second shot, similarly

designed for the Omicron XBB.1.5 variant.

OVERCOMING SETBACKS

Despite the weak demand, the drugmakers aren't giving up

on launching mRNA vaccines just yet. Walvax, CSPC and Stemirna

have said they are also researching other medicines including

for infectious diseases and tumours.

"China is trying hard to develop in this direction," George

Gao, a virologist at the Chinese Academy of Sciences Institute

of Microbiology who previously led the Chinese Center For

Disease Control and Prevention, told Reuters.

China's developers could support vaccine supply in Africa

and Asia by producing at low cost and transferring knowledge,

said Dicky Budiman, an epidemiologist at Griffith University in

Australia who has advised Indonesia's government on COVID.

One study estimated the cost of building, equipping and

replacing vaccine plants without subsidies in the U.S. or EU

would be around $0.20 per dose annualised over the lifetime of a

plant and equipment, but less in China.

However, the potential Moderna competitors face a long road

ahead as they seek to bring their mRNA products through trials

and to market.

CSPC has said it aims to launch shots for RSV in 2026 and

for shingles in 2028. Walvax aims to launch a combined COVID and

flu mRNA vaccine over the next five to 10 years.

But with limited markets for their existing vaccines, the

three Chinese companies lag their rival Moderna in sales,

potentially holding back their ambitions.

CSPC generated 31.45 billion yuan ($4.3 billion) in

revenue in 2023 and Walvax $571.4 million, compared with

Moderna's ( MRNA ) revenue of $6.8 billion in the same year.

In a further setback, CSPC's Malaysian research partner,

Malaysia Pharmaniaga, is battling financial losses,

and a spokesperson said mRNA vaccines are "not within

Pharmaniaga's scope of business direction".

CATCHING UP

Robert Langer, an MIT engineer who was a co-founder of

Moderna, told Reuters he expected Moderna and "possibly"

BioNTech to dominate mRNA medicines for the next five

to 10 years.

Langer cited Moderna's ( MRNA ) "huge technological and IP

(intellectual property) advantages" and its headstart on the

long timeframes needed to conduct clinical trials for new

products.

A former Stemirna executive, Frank Zhang, said China's

pharmaceutical industry cannot compete with innovative companies

abroad because of gaps in technology, talent and ideas.

"A company able to gain market share in the U.S. is the

only company with actual strength," Zhang, who led part of

Stemirna's COVID vaccine R&D efforts, told Reuters.

Walvax has gained knowledge about large-scale production

technology, and funding was not likely to be a problem for it or

CSPC, given that both are listed companies selling other

products, said Abogen's CEO Ying Bo, a former Moderna scientist.

But Ying said the long timeframes for researching,

developing and winning approvals for mRNA vaccines pose a big

challenge for China's developers.

"Time is always the biggest enemy to biotech," Ying

said.