China has announced that it would stockpile the H1N1 flu vaccine for 1 percent of the population by Oct 1, even as the 10 designated Chinese vaccine producers are getting busy with development and clinical trials.

The stockpile of 13 million injections will be used as a preventive measure to counter any sudden outbreak of the flu, Liang Wannian, deputy director of the Ministry of Health's contingency office, said.

He said the flu vaccine would be chiefly targeted at high-risk groups -- people with prevalent illnesses and pregnant women.

The first batch of China's H1N1 flu vaccine, developed by these 10 companies, is expected to be ready by the end of the month, and would undergo a two-month clinical trial before it is made available to the public, he said.

The 10 local vaccine makers include Beijing Sinovac Biotech Co Ltd, Zhuhai Hualan Biological Engineering Inc and Shenzhen Neptunus Interlong Bio-tech Co Ltd.

Sinovac announced recently that it had completed construction of the H1N1 virus seed bank necessary to produce a virus antigen.

The company received the seed virus from the US Center for Disease Control on June 8 and started producing the H1N1 vaccine the same day.

Sinovac said it expected to complete production of the first batch and initiate clinical trials of the vaccine by the end of this month. The flu vaccine has been named PANFLU.

The company got 100 million yuan on June 29 as loan from the Bank of Beijing, which will be used to purchase pharmaceutical raw material and for expanding its manufacturing facility, according to Sinovac Chairman, President and CEO Yin Weidong. The company's current annual vaccine production capacity is between 20 million and 30 million doses.

Shenzhen-listed Hualan Biological Engineering Inc said on July 1 that its equity holding subsidiary Hualan Biological Vaccine Co Ltd, a H1N1 vaccine developer, had borrowed 20 million yuan from each of the two shareholders of the parent company to fund its vaccine development effort.

Hualan can now manufacture nearly 200 million doses annually.

Li Yingpeng, a pharmaceutical analyst at Galaxy Securities, said 13 million doses of the H1N1 vaccine implied the vaccine makers could net a business of over 300 million yuan, as the average market price of other vaccines in China was around 30 yuan per dose.

"Though it seems these 10 companies have grabbed the huge business opportunities, they are, at the same time, shouldering high risks," Li said.

He said since the evolution of the H1N1 flu could not be predicted accurately, the returns on the huge investment required for development of the vaccine and clinical trials could not be guaranteed.