Pfizer's Oral COVID-19 Drug Paxlovid Granted Conditional Approval in China

According to the National Medical Products Administration (NMPA), Pfizer's COVID-19 oral drug Paxlovid has been granted conditional approval for marketing by the NMPA. It can be used to treat adult patients with mild to moderate COVID-19 who are at high risk of progressing to severe disease. According to previously disclosed data from the company, compared with a placebo, this drug can reduce the risk of hospitalization or death by 89% in non-hospitalized high-risk adults with COVID-19. It is reported that this oral medication will become a new addition to China’s epidemic prevention "medical arsenal" and may also bring new development opportunities to related raw material and intermediate enterprises. Pfizer stated that this demonstrates the Chinese government’s continuous efforts to improve the accessibility of innovative drugs.

COVID-19 Treatment Market Gains Another Boost in Confidence

On February 12, the National Medical Products Administration (NMPA) granted conditional approval for the import registration of Pfizer's COVID-19 treatment drug, Nirmatrelvir Tablets/Ritonavir Tablets combination pack (known as Paxlovid), to treat adult patients with mild to moderate COVID-19 who are at high risk of progressing to severe disease, such as elderly patients or those with chronic kidney disease, diabetes, and other high-risk factors for severe illness.

On December 22 last year, the emergency use authorization application for Paxlovid was approved by the U.S. FDA. Reportedly, this approval for Paxlovid is a conditional approval for import registration, which means that the National Medical Products Administration requires the marketing authorization holder to continue relevant research work, complete the conditional requirements within a specified time, and submit subsequent research results promptly.

Paxlovid, the COVID-19 oral drug, has also drawn significant attention from investors regarding its contribution to Pfizer's performance. According to the company’s recently released 2021 annual financial report, Pfizer’s total revenue for 2021 reached 81.3 billion U.S. dollars, marking a 95% year-on-year increase. As for the performance outlook for 2022, Pfizer forecasts its total revenue to range between 98 billion and 102 billion U.S. dollars and has raised its revenue projection for the COVID-19 vaccine Comirnaty to approximately 32 billion U.S. dollars.

Upstream pharmaceutical companies in China may benefit

Southwest Securities predicts that the global market size for oral COVID-19 drugs will reach tens of billions to hundreds of billions of dollars. Oral COVID-19 drugs will become the next major trend, and China-based raw material and intermediate manufacturers related to domestically-produced oral COVID-19 drugs have also become the focus of market attention.

Just one day before the National Medical Products Administration announced the conditional approval of Paxlovid's import registration, Porton Pharma Solutions issued an announcement stating that it had recently received a new batch of "Purchase Orders" from Pfizer. The company will provide Contract Development and Manufacturing Organization (CDMO) services for Pfizer. The total amount of the newly acquired orders is $681 million (approximately 4.3 billion yuan). The order has already taken effect and is scheduled for delivery in 2022. Porton Pharma Solutions’ latest earnings forecast shows that its revenue for 2021 is expected to be between 3.004 billion yuan and 3.108 billion yuan, representing a year-on-year increase of 45% to 50%.

In the view of industry experts, the approval of Pfizer's COVID-19 oral medication in China is expected to boost the currently sluggish pharmaceutical outsourcing sector in the A-share market. Some research reports even suggest that related orders could enhance the market influence of Chinese companies in this field. In fact, just one week after the Spring Festival, the cumulative declines for Wuxi AppTec, Pharmaron, and Asymchem were 20.73%, 10.78%, and 19.47%, respectively, while Porton Advanced Solutions also experienced a cumulative decline of 21.17%.