The successful trials of coronavirus vaccines from Western pharmaceutical companies have reduced the market capitalization of Chinese rivals by more than $ 13 billion, thus achieving Beijing’s ambitions to lead the global fight against the pandemic.
An index that tracks the shares of 14 vaccine producers listed in Shanghai and Shenzhen has fallen 11% since Pfizer first reported positive results from its phase three trial earlier this month, and is in progress. down about a third from its August peak.
But analysts said Beijing’s backing and confidence that Chinese producers would be the first to tap into demand in developing markets have helped stabilize company stock prices. Their total market value has risen nearly 125 percent this year to over 1 billion rmb ($ 159.7 billion), according to data provider Wind.
Chinese developers’ rapid progress in the early days of the pandemic was complicated by the successful containment of the virus in the country, as nearly zero local cases forced them to conduct end-stage clinical trials in others. country.
Sensitivities in entering into price and distribution agreements with host countries have led to delays in phase three trials, which test the efficacy of a vaccine in the general population and are needed for regulators to approve them. commercial sales.
But Chinese officials have met ambitious manufacturing and distribution deadlines to secure a new role for their vaccine developers as global suppliers and to strengthen diplomatic ties.
A day after Pfizer’s announcement, senior officials in Beijing said China had “provided a large number of anti-epidemic resources to countries around the world through trade channels.”
Brock Silvers, chief investment officer at Kaiyuan Capital, said state support for pharmaceutical and biotech listings has helped drive a number of initial public offerings in China that “have gone well overall and that the gold rush that followed attracted many retailers. [investor] support”.
But as the sale of vaccine producers’ shares slowed, Silvers said the market remained volatile. “The reduction in support is likely to be strongly correlated with the continued positive announcements from foreign vaccine developers,” he said.
Bruce Pang, head of macroeconomic and strategic research at China Renaissance, said Beijing’s support has helped boost investor confidence in domestic producers. He said Pfizer and Moderna’s vaccines require refrigeration to remain viable, which could put them at a disadvantage in developing markets.
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“These limitations are bad for use in developing countries, but not with Chinese vaccines [most of which are] relatively easier to produce, store and distribute, ”Pang said.
The total market capitalization of Hong Kong-listed CanSino, whose August stock offering on the tech-focused Shanghai Star Market raised nearly $ 750 million, rose more than 480% this year to reach nearly $ 10 billion.
The company announced on November 7 that it had started administering its coronavirus vaccine in Mexico, the third country in which it is conducting phase three trials after Pakistan and Russia.
By comparison, the market capitalization of Pfizer, whose news of positive Phase Three trial results helped erase about $ 730 million from CanSino’s market value, has fallen about 7.5% this year. , while that of its rival Moderna jumped 475% compared to the same period.
Zhang Tong, pharmaceutical equity analyst at Kaifeng Investment, said there was “definitely a bubble in the vaccine industry before.” But he said there is room for growth once the market correction is over.
Additional reporting by Wang Xueqiao in Shanghai