Traditional Chinese medicine maker soars after top respiratory expert backs drug in potentially inhibiting coronavirus
- The Banlangen granules could potentially inhibit coronavirus, researchers led by respiratory expert Zhong Nanshan found through a series of in-vitro studies
- Surge seen as speculative as more clinical trials are needed to establish the drug’s efficacy
Shares of a traditional Chinese medicine (TCM) company jumped after receiving validation from the nation’s top respiratory expert on its drug’s effect against the coronavirus, joining two other peers that have enjoyed huge gains this year.
Guangzhou Baiyunshan Pharmaceutical Holdings soared 13 per cent to HK$21.75 in Hong Kong and by 10 per cent to 34.18 yuan in Shanghai on Friday, after Zhong Nanshan, the public face of China’s fight against the Covid-19 pandemic, said one of its products could potentially inhibit the coronavirus.
Researchers led by Zhong found that Banlangen granules, a herbal medicine popular in China for treating common cold and flu, was effective against the virus in a series of in-vitro studies, Chinese newspaper Nanfang Daily quoted him as saying during a conference on Tuesday in Guangzhou. The drug was also widely used in the country during the 2003 severe acute respiratory syndrome (Sars) outbreak.
Investors latched on to the hype surrounding the company even though the studies were still at an early stage and Zhong did not disclose whether or when any research paper or preclinical data will be published. The stock’s advance in Hong Kong marked its biggest daily jump since October 2018, while turnover ballooned 24 times to HK$240 million (US$31 million) from Thursday, according to Refinitiv data.
Many pointed to the speculative nature of the surge on Friday. “In-vitro studies data is usually the weakest among preclinical data,” wrote Huang Jianping, general manager at asset management firm Shanghai Leader Capital, in a post published on online stocks forum Xueqiu.
