People receive Covid-19 vaccine jabs at a mass vaccination site in Gulou district of Nanjing, a Chinese city in eastern Jiangsu province. Photo: Xinhua
Shares of Chinese vaccine producers and distributors slumped, led by a 15 per cent crash in CanSino Biologics, amid concerns about rising competition after President Joe Biden’s team supported unlocking Covid-19 patents to help fight the global pandemic.
CanSino sank by HK$54.80 to HK$310.40 in Hong Kong, the biggest slump since March 8, bringing the stock’s four-day tumble to 20 per cent. A gauge tracking vaccine producers in mainland China tumbled 4.4 per cent, with CanSino’s A shares declining by 14 per cent in Shanghai.
Shanghai Fosun Pharmaceutical Group, which partners with BioNTech SE to make and distribute its mRNA vaccines, slid 14 per cent to HK$48.30, while Sinopharm Group, which develops three types of vaccines, retreated 6.8 per cent to HK$24.
The turbulence in vaccine-related stocks caught investors off guard, after the White House said it will back a proposal to waive patent and other intellectual-property protections for Covid-19 vaccines to boost global supply and vaccination pace. The US will actively participate in negotiations for the text of the waiver at the World Health Organization, and urged other nations to back it, according to Trade Representative Katherine Tai.
“The sell-off in the vaccine makers is sparked by comments that the US will relinquish the patent and other protections for Covid-19 vaccines,” said Dai Ming, a fund manager at Hengsheng Asset Management in Shanghai. “If that comes true, it will be a blow to all these makers who have spent a lot on the research and development. They will not be able to make extra returns from their monopoly.”
The latest push by the US comes as infections surged across the region, especially in India, prompting governments from Hong Kong to Singapore and Malaysia to tightened quarantine and targeted lockdown measures to stem the crisis.
Losses in vaccine producers greeted mainland traders who returned from a three-day trading break over Labour Day. They bucked the broader market as the Hang Seng Index finished the day 0.8 per cent higher.
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International community races to help India tackle worsening Covid-19 outbreak
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CanSino, based in the northern city of Tianjin, has surged more than 10 folds since it went public in Hong Kong in 2019. The patent-waiver proposal will probably prompt investors to revalue the company’s earnings outlook, analysts said. The firm expects to be profitable in the second quarter due to faster vaccine roll-out programmes, it said in the first-quarter results. It is also poised to post its first-ever annual profit this year, based on analysts’ consensus estimates, ending losses since 2019.
Other news reports earlier this week said the WHO was expected to approve the vaccines produced by Sinovac and Sinopharm. Separately, a WHO expert put “low confidence” in data supplied by Sinopharm on its vaccine related to the risk of serious side-effects, Reuters reported on Wednesday.
