Development of Oral COVID-19 Treatment Deals Direct Blow to Domestic Pharmaceutical Stocks

Industry Index Falls 6.07%... Sharp Decline in Celltrion and Samsung Biologics

[Image source=Yonhap News]

Domestic leading pharmaceutical stocks took a direct hit from oral COVID-19 treatments. Although some stocks related to oral COVID-19 treatments surged sharply, it was not enough to prevent the overall sector from plummeting.

As of 10:56 a.m. on the 5th, the KOSPI pharmaceutical sector index recorded 17,528.68 points, down 6.07% (1,133.71 points) from the previous day. The KOSDAQ pharmaceutical sector index also fell 4.72% (572.50 points) to 11,541.26 points compared to the previous day.

Most stocks in the KOSPI pharmaceutical sector index were weak. At the same time, Celltrion recorded 228,500 KRW, down 7.86% (19,500 KRW) from the previous day. Celltrion-affiliated stocks also plunged together. Celltrion Healthcare and Celltrion Pharm also fell 6.95% and 5.5%, respectively, compared to the previous day.

Other large pharmaceutical-related stocks with a market capitalization exceeding 3 trillion KRW also showed poor performance. Samsung Biologics fell 5.94%. SK Bioscience, Yuhan Corporation, and Green Cross Corporation also dropped 6.58%, 2.95%, and 9.72%, respectively. As major pharmaceutical stocks plunged, the KOSDAQ index's decline widened to the high 2% range.

The decline in the pharmaceutical sector is interpreted as being due to the imminent launch of oral COVID-19 treatments. On the 1st (local time), the U.S. pharmaceutical company Merck announced that its oral COVID-19 treatment, Molnupiravir, in development, is effective in reducing hospitalization and mortality rates among COVID-19 patients. In response, quarantine authorities, including those in Korea, announced plans to purchase and use oral COVID-19 treatments for high-risk groups.

On the other hand, stocks related to oral COVID-19 treatments showed an upward trend. On the 3rd, the Ministry of Food and Drug Safety announced that a total of 14 companies are developing COVID-19 treatments, with Shinpung Pharmaceutical being the only one conducting Phase 3 clinical trials for an oral COVID-19 treatment. Shinpung Pharmaceutical traded at 61,300 KRW, up 6.42% (3,700 KRW) from the previous day.

Stocks related to the U.S. pharmaceutical company Merck also showed gains. HK Inno.N traded at 62,900 KRW, up 19.81% (10,400 KRW). HK Inno.N completed a joint sales and distribution agreement with Merck in January.