Chinese Firm Says Work Still Needed on Drug After Shares Surge

(Bloomberg) -- Guangzhou Baiyunshan Pharmaceutical Holdings Co., whose stock surged the most in two years Friday on reports one of its medicines could potentially inhibit Covid-19, said more studies are needed on the treatment.

Shares of Baiyunshan climbed 13% in Hong Kong and by the 10% limit in Shanghai on Friday after one of the nation’s top medical advisers reportedly said one of its treatments could potentially inhibit Covid-19. 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.

More work needs to be done in studies of banlangen and sales of the medicine are not expected to have a major impact on Baiyunshan’s performance, it said in a statement to the Shanghai stock exchange, where it’s listed. The company owns 50% of the joint venture.

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.

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With assistance from Bloomberg