What’s new: The share prices of several Covid-19 vaccine developers fell in August, despite seemly promising vaccine development.
On Aug. 18, reports appeared that China National Pharmaceutical Group Corp. (Sinopharm) said it expected to have a Covid-19 vaccine on the market by the end of the year. The next day, the share prices of several other Chinese front-runners researching and developing coronavirus vaccines dropped sharply.
Why the slump: Some argue that Sinopharm’s announcement made life harder for its competitors and would lead them to have a smaller market share in future, resulting in falling share prices.
But one analyst that spoke to Caixin said that there are different types of vaccines and it takes different amounts of time for them to go to market. Sinopharm’s announcement should not have resulted in sell-offs of other vaccine manufacturers’ shares, the analyst said.
The drop in vaccine stocks was also due to the dramatic surges in the companies’ share prices earlier, which built up pressure for a market correction, some said. “Some companies hyped the vaccine concept up,” a source at an investment firm said.
Changes in market trends were another reason for the fall in share prices, according to multiple analysts. “This week, the market focused more on the economic recovery amid the post-pandemic era. High-tech and pharmaceutical stocks both performed weakly,” an analyst told Caixin.
What’s the background: Stocks of leading Covid-19 vaccine developers previously performed well, as trial results for Covid-19 vaccine candidates rekindled investors’ enthusiasm for the sector.
“In the long term, (investments in) vaccine stocks will return to the original investment logic, which focuses on upgrading products and making better vaccines,” said the analyst.
Related: China Started Giving Medical Workers Experimental Covid-19 Vaccine Last Month, Official Reveals
Contact editor Marcus Ryder (marcusryder@caixin.com)
