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(Bloomberg) – Manufacturers of vaccines and other coronavirus treatments have plummeted in Asia after Merck & Co. said its experimental pill halved the risk of hospitalization and death from Covid-19.
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The declines followed a collapse in shares of BioNTech SE and Moderna Inc. in New York on Friday after Merck broke the news of its drug, which is seen by some to mark a turning point in the global fight against Covid-19.
Shanghai Fosun Pharmaceutical Group Co., which has reached an agreement to distribute the vaccine from BioNTech and Pfizer Inc. in Greater China, fell 21% in Hong Kong, leading to losses in the region’s health stocks.
Drug makers were weaker overall, CSPC Pharmaceutical Group Ltd. and Wuxi Biologics (Cayman) Inc. each falling more than 7%, among the worst drops in the Hang Seng Index. In Japan, JCR Pharmaceuticals Co., which is hired to produce the AstraZeneca Plc jabs, and Fujifilm Holdings Corp., which makes the Avigan treatment and reagents for Covid testing, fell about 5% each.
“It’s on the back of Merck’s game-changing pill, which still requires emergency use clearance from the FDA before it can be deployed,” said Justin Tang, head of Asian research at United First Partners. “Investors will need to take a ‘sell first, ask later’ position given the current high valuation levels of vaccine stocks.”
The results of the Merck pill study were so encouraging that the drugmaker and its partner, in consultation with independent trial monitors and the U.S. Food and Drug Administration, chose to stop recruiting patients and begin the process of obtaining regulatory clearance.
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