China perseveres with mRNA COVID shot development amid Omicron, commercial uncertainty

Still, China is unlikely to join the majority of countries in approving foreign-made vaccines based on messenger RNA (mRNA) technology before making its own, experts said, though a slowing vaccination drive at home and in some other nations and improved supply of approved vaccines have raised questions of viability.

"If they (China) use mRNA vaccines, they will produce them themselves rather than take it from outside. It is a matter of national pride and also vaccine diplomacy," said Jaya Dantas, professor of international health at the Curtis School of Population Health in Australia.

About 87% of China's 1.4 billion people are fully vaccinated and nearly 40% have received boosters - all non-mRNA shots. Along with a policy of strictly containing every local outbreak, China has prevented any major virus flare-up. However, the efficacy of the vaccination regime against Omicron is unclear.

Pre-Omicron human trials showed mRNA shots from U.S.-German duo Pfizer Inc PFE.N and BioNTech SE BNTX.O as well as U.S. biotech Moderna Inc MRNA.O better prevented symptomatic cases than the most-used non-mRNA Chinese shots - though studies indicate the pair need boosters to strengthen Omicron defences.

China has not approved the use of those or any other foreign vaccine, instead relying on home-grown vaccines.

"For what appears to be political reasons, the Chinese authorities have insisted to date on using domestically developed alternatives, and that has required them to lean that much further on this lockdown and quarantine-heavy approach to zero-COVID," said senior China analyst Michael Hirson at Eurasia Group.

"I think a more open approach to vaccines would provide them more flexibility and in terms of how they go about containment with a less disruptive impact on the economy."

The National Health Commission did not respond to Reuters queries about foreign mRNA vaccine approvals.

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Experts said success in its own mRNA technology will not just broaden its domestic COVID-19 vaccine portfolio, it will also open up development for more innovative vaccines.

China approved human tests for its mRNA candidates in June, 2020, and there are several at various stages of development.

Only ARCoV - co-developed by the Academy of Military Medical Sciences, Suzhou Abogen Biosciences Co Ltd and Walvax Biotechnology Co Ltd 300142.SZ - has begun Phase III clinical trials, or large-scale testing in which scientists study how well the vaccine reduces the risk of COVID-19 disease and death.

A laboratory study found Omicron could significantly weaken the neutralising activity of the two-dose ARCoV, though animal testing showed a booster could induce antibody production.

As Omicron threatens to complicate development, a high vaccination rate and expanding booster campaign make for an intensifying Chinese market for COVID-19 shots. Moreover, it is unclear whether authorities will allow further doses for people who have already received one booster shot.

"As the domestic market is getting smaller, all Chinese COVID shot makers need to expand their businesses through export," said China Renaissance Securities analyst Zhao Bing.

Some Chinese mRNA candidates require less stringent storage temperatures than vaccines of foreign rivals, but they are yet to show significant advantages in manufacturing costs or storage conditions over rival non-mRNA vaccines, Zhao said.

Still, going through the process of developing mRNA COVID-19 shots is crucial for China's pharmaceutical industry, regardless of whether a vaccine gains approval, as mRNA-based technology could accelerate development of new medical products to prevent or treat various infectious diseases and cancers, experts said.

"The mRNA-based technology platform itself is like a process of launching a rocket," said Nomura analyst Zhang Jialin.