Stocks of Chinese Generic Drug Makers Plunge after Remdesivir Trial Let Down
The stocks of generic drug manufacturers, Hainan Haiyao and BrightGene, went down sharply following a fiasco with Gilead's hoped-for COVID-19 treatment, Remdesivir, in its first clinical trial.
The stocks of Chinese drugmakers BrightGene and Hainan Haiyao slipped around 4% in the market after media reports about Remdesivir's unsuccessful clinical trials for COVID-19 treatment. China's A-share investors had high hopes for the mass production of Remdesivir in generic form and had been betting big on these companies since the beginning of the pandemic.
Remdesivir has, unfortunately, failed in its first randomized clinical trial. The Financial Times announced the disappointment last night, citing people who saw the leaked documents issued by the World Health Organization (WHO) about the coronavirus drug. "In this study of hospitalized adult patients with severe COVID-19, that was terminated prematurely, Remdesivir was not associated with clinical or virological benefits," the leaked WHO report revealed.
Sequoia-backed BrightGene (688166:SH), an SSE Star Market-listed drug maker, first announced its Remdesivir mass production plans on January 12, which lifted its stock price over 20% following the announcement. Meanwhile, Shenzhen-listed drug maker Hainan Haiyao (000566:SZ) announced that it was ready to mass-produce Remdevisir's generic version in China on February 14, which was reflected in its stock price in a more-than-25% jump intraday.
Hainan Haiyao said in a filing to the Shenzhen Stock Exchange on Feb. 14 that it was ready to manufacture 3.5 million vials of Remdesivir, after which was warned by the regulators over the drugmaker's failure to disclose adequate information about the process. BrightGene, on the other hand, was singled out for a possible intellectual property infringement with Gilead (GILD:NASDAQ).
Not only in treatment measures but also in vaccination, numerous other Chinese biotech firms have joined the global drug and vaccine development race. Cansino Biologics (6185:HKEX), a Tianjin-based biotech that previously developed an Ebola-vaccine, and Walwax Biotechnology (300412:SH) are the companies that are still working on China-made vaccines.