Makers of vaccines and other coronavirus treatments dropped in Asia after Merck & Co. said its experimental pill cuts the risk of hospitalization and death from COVID-19 in half.
The declines followed a slump in shares of BioNTech SE and Moderna Inc. in New York on Friday after Merck delivered the news on its drug, which is seen by some as marking a turning point in the global fight against COVID-19.
Shanghai Fosun Pharmaceutical Group Co., which has a deal to distribute BioNTech and Pfizer Inc.’s vaccine in Greater China, slumped as much as 21% in Hong Kong, leading losses in the region’s health stocks.
Drugmakers were broadly weaker, with CSPC Pharmaceutical Group Ltd. and Wuxi Biologics (Cayman) Inc. each dropping more than 7%, among the worst declines on the Hang Seng Index. In Japan, JCR Pharmaceuticals Co., which is contracted to produce AstraZeneca Plc’s jabs, and Fujifilm Holdings Corp., which makes treatment Avigan and reagents for COVID tests, dropped about 5% each.
“This is on the back of Merck’s game-changer pill, which still requires emergency-use authorization from the FDA before being rolled out,” said Justin Tang, the head of Asian research at United First Partners. “Investors will need to take a ‘sell-first ask-later’ stance given current elevated valuation levels of vaccine stocks.”
The results of the study on Merck’s pill were so encouraging that the drugmaker and its partner, in consultation with independent trial monitors and the U.S. Food and Drug Administration, elected to stop enrolling patients and begin the process of gaining regulatory clearance.