China Drug Stock Surges After Doctor Endorses Treatment for Covid

(Bloomberg) --

A maker of traditional Chinese medicine products saw its stock surge the most in two years Friday after one of the nation’s top medical advisers reportedly said one of its treatments could potentially inhibit Covid-19.

Speculative traders pushed Guangzhou Baiyunshan Pharmaceutical Holdings Co. up 13% in Hong Kong and by its 10% limit in Shanghai. Guangzhou-based Nanfang Daily cited Zhong Nanshan as saying Baiyunshan’s “banlangen” product was effective in a series of in-vitro studies. Zhong is a senior medical adviser to Beijing who confirmed the risk of human-to-human Covid-19 infection on Jan. 20.

Zhong was speaking at a Oct. 13 ceremony in Guangzhou to launch a Baiyunshan banlangen project. Zhong will lead a team working on development and upgrades of the drug, according to the paper. Zhong’s team had worked with Baiyunshan in research on the product’s properties after the SARS outbreak, it added.

Banlangen is a traditional Chinese medicine made from isatis root and often used as a common cure for cold and flu. In 2013 the product sold out in various parts of China during a fatal avian flu virus outbreak. Baiyunshan, which has a market value of around $7.8 billion, also retails Western pharmaceutical products. Its Hong Kong shares are down 18% this year.

Tests cited in the report are still early stage and it remains unclear whether the medicine is effective.

Traders sent the stock’s trading volume in Hong Kong to 21 times above its 30-day average. CSPC Pharmaceutical Group Ltd. which also makes a version of banlangen, dropped 5.1% in Hong Kong.

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With assistance from Bloomberg