No­bel fame set to boost artemisinin firms

Anti-malaria drug com­pa­nies must win big global or­ders for gains, say an­a­lysts

China Daily (Canada) - - TORONTO - ByWUYIYAO in Shang­hai wuyiyao@chi­nadaily.com.cn

Artemisinin mak­ers from China are set to rake in the moolah af­ter Tu Youyou, the in­ven­tor of the anti-malaria drug, won the No­bel Prize for medicine for her find­ings, trig­ger­ing sharp buy­ing in­ter­est among in­vestors.

Mak­ers of the anti-malaria drug, which is based on Chi­nese herbal medicine, are ex­pected to see sharp up­swings in their share prices in the short term, an­a­lysts said.

How­ever, the real test for the com­pa­nies in the long run would be their abil­ity to at­tract in­ter­na­tional or­ders on their own, as most of these com­pa­nies are raw ma­te­rial sup­pli­ers to multi­na­tional drug­mak­ers such as No­var­tis AG.

Most of the over­seas drug­mak­ers hold the in­tel­lec­tual prop­erty rights for ef­fec­tive ther­a­pies against malaria. De­mand for artemisinin is lim­ited in the do­mes­tic mar­ket, as malaria has been kept un­der check in China for sev­eral years now, the an­a­lysts said.

China’s anti-malaria medicine sup­pli­ers must boost their re­search and de­vel­op­ment ca­pac­i­ties to grasp the up­per stream of the in­dus­trial chain, widen their profit mar­gin and win more in­ter­na­tional or­ders, they said.

“China’s anti-malaria drug sup­pli­ers are mainly pro­duc­ing bulk drugs, which have lim­ited profit mar­gin, while in­ter­na­tional phar­ma­ceu­ti­cal play­ers with strength in re­search, de­vel­op­ment and patents are tak­ing most of the mar­ket share,” said a re­port pub­lished by Phar­ma­ceu­ti­cal News.

The re­port said that the global de­mand for anti-malaria drugs could be es­ti­mated at about $1.5 bil­lion.

Shares of do­mes­tic artemisinin com­pa­nies are ex­pected to see a flurry of ac­tiv­ity among re­tail in­vestors, who are bullish on artemisinin and its sig­nif­i­cance. re­cent China How­ever, do­mes­tic anti-malaria drug sup­pli­ers will need lots of ef­forts to gain global or­ders, said a re­search re­port from Haitong Se­cu­ri­ties Co Ltd.

Cur­rently, five A-share listed phar­ma­ceu­ti­cal firms, in­clud­ing Shang­hai Fo­sun Phar­ma­ceu­ti­cal (Group) Co Ltd, KPC Phar­ma­ceu­ti­cals Inc, Guangzhou Baiyun­shan Phar­ma­ceu­ti­cal Hold­ings Co Ltd and CR Dou­ble-Crane Phar­ma­ceu­ti­cals Co Ltd, are cer­ti­fied artemisinin sup­pli­ers.

Among these public com­pa­nies which sup­ply anti-malaria drugs, Fo­sun’s sub­sidiary Guilin Phar­ma­ceu­ti­cal Co Ltd’s prod­ucts have of­fi­cially passed the WHO-PQ cer­ti­fi­ca­tion, or the Pre-Qual­i­fi­ca­tion cer­ti­fi­ca­tion of the World Health Or­ga­ni­za­tion, to sup­ply drugs di­rectly to WHO pro­grams, the only do­mes­tic sup­plier that is on the list.

The rank­ing is a vi­tal tool used by the United Na­tions agen­cies to guide their pro­cure­ment de­ci­sions and bulk pur­chas­ing of medicines at coun­try and in­ter­na­tional lev­els, ac­cord­ing to WHO’s of­fi­cial web­site.

KPC Phar­ma­ceu­ti­cals is ap­ply­ing for theWHO-PQ cer­ti­fi­ca­tion for its anti-malaria drug va­ri­eties, ac­cord­ing com­pany of­fi­cials.

As the do­mes­tic stock mar­ket was not trad­ing dur­ing the seven-day Na­tional Day hol­i­day break, the No­bel Prize news’ im­pact on Shen­zhenand Shang­hai-listed artemisinin sup­pli­ers is yet to be seen. Trad­ing re­sumes on Thurs­day.

Share prices of both Hong Kong-listed Fo­sun Phama and Baiyun­shan jumped more than 5 per­cent on Tues­day af­ter the news.

Fo­sun’s share price closed at HK$25.7 ($3.32), a 1 per­cent gain, while Baiyun­shan closed at HK$22.1, a 2.79 per­cent gain, onWed­nes­day.

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