Concept Tracking: Global's Only Pre-Exposure COVID-19 Preventive Drug Launched in Hainan — Beneficiary Companies and Investment Opportunities

Intelligent Finance APP learned that recently, the only drug in the world authorized in multiple regions including the United States, the United Kingdom, and the European Union for pre-exposure prophylaxis of COVID-19 has arrived in Hainan. Evusheld (Ensuid), the neutralizing antibody developed by AstraZeneca (AZN.US), has completed the approval process for special imported items. Evusheld can be used in the Boao Lecheng International Medical Tourism Pilot Zone in Hainan but cannot yet be reimbursed through medical insurance. The cost for a one-time injection of two doses is 13,300 yuan. According to Debang Securities, the market for COVID-19 drugs is expected to reach hundreds of billions of yuan, making it the most important investment sector after COVID-19 vaccines and testing, with longer sustainability than vaccines and testing. Relevant stocks related to COVID-19 prevention drugs include: Chongqing Pharmaceutical Holdings (000950.SZ), Hisun New Materials (300501.SZ), and Ruikang Medicine (002589.SZ).

It is reported that Evusheld, a combination of two monoclonal antibodies tixagevimab and cilgavimab, requires two injections. According to the instructions for use of Evusheld, this long-acting neutralizing antibody is primarily suitable for the prevention of COVID-19 infection in individuals with compromised or weakened immune systems (aged ≥12 years, weight ≥40 kg).

According to the recommendation of the U.S. FDA, it has been clarified that Evusheld cannot replace vaccines. The FDA explicitly stated: "For individuals recommended to receive the COVID-19 vaccine, Evusheld cannot be used as a substitute, including those with moderate to severe immune dysfunction who may benefit from vaccination."

AstraZeneca-related personnel introduced that the population with low immunity accounts for less than 2% of the total population. This group of people cannot respond to vaccines, meaning that vaccines do not produce antibodies. Evusheld is equivalent to directly injecting antibodies into the human body. Its principle of action is different from that of vaccines, but the effect achieved is the same. Insiders said that Evusheld is also in short supply globally, and foreign countries can't produce it in time.

Data shows that Evusheld remains effective against multiple subvariants of the globally circulating Omicron variant, including BA.4 and BA.5. Reports indicate that AstraZeneca is currently developing a next-generation, broader-spectrum preventive drug targeting multiple coronaviruses.

Debang Securities analysis pointed out that the COVID-19 drug market is expected to reach hundreds of billions of yuan, making it the most important investment sector after COVID-19 vaccines and testing, with longevity surpassing that of vaccines and testing. "Combining Chinese and Western approaches" will be the mainstream method for COVID-19 treatment in China, with a key focus on small molecule drugs and the industry chain for COVID-19 treatments, as well as the Traditional Chinese Medicine (TCM) sector for combating COVID-19.

Zheshang Securities believes that the global COVID-19 pandemic may not subside in the short term. Under the general policy of "dynamic zero-COVID" in China, the establishment of a comprehensive prevention and control system involving "testing, prevention, and treatment" will inevitably accelerate. It is recommended to view investment opportunities amid complex domestic and international epidemic prevention situations from multiple perspectives, including testing, prevention, treatment, and supply chain.

Guosen Securities stated that the performance of the pharmaceuticals industry in the first quarter continued along the main theme of the COVID-19 pandemic. It is expected that vaccines and COVID-19 testing businesses will maintain robust growth. At the same time, the CXO sector will also benefit from the global industrial chain shift to continue its rapid expansion, with CDMO businesses related to COVID-19 drugs bringing significant performance increases to relevant companies. The institution further analyzed that attention should be paid to the main COVID-19 theme as well as high-quality individual stocks with reasonable valuations.

Relevant Targets:

Chongqing Pharmaceutical Holdings (000950.SZ): Since 2013, the company has started collaborating with AstraZeneca on various projects to expand sales channels. The company's third-party logistics has undertaken AstraZeneca products.

Haishun New Materials (300501.SZ): Its main products are widely used in the pharmaceutical packaging of well-known domestic and international pharmaceutical brands such as AstraZeneca, Huahai Pharmaceutical, Shanghai Pharmaceuticals, United Laboratories, and Novartis.

RuiKang Medicine (002589.SZ): Previously signed a strategic cooperation agreement with AstraZeneca. AstraZeneca supports RuiKang Medicine in terms of distribution rights for its subsidiaries across China. AstraZeneca integrates its advantageous product resources and prioritizes RuiKang Medicine and its subsidiaries across China for distribution rights.