Some pharmaceutical and biotech stocks have emerged as the most eye-catching hot stocks in South Korea amid hope for the discovery of potential cures or vaccines against COVID-19, but falling sales and disruptions in non-pandemic research and drug ingredient supplies pose an imminent threat to the broad industry.

According to Korea Exchange on Tuesday, the KRX healthcare index gained a whopping 45.55 percent from this year’s trough on March 19, outperforming a 27.40 percent recovery in the industry-wide benchmark Kospi index over the same period. The surge in the healthcare sector index was widely driven by companies that have announced plans to develop or test potential therapies or vaccines for the coronavirus pandemic.

On Tuesday, Bukwang Pharm Co. jumped 24.49 percent to close at 27,700 won ($22.8) on news it became the first to receive approval for a clinical trial of a drug to treat COVID-19 patients in Korea. Daewoong Pharmaceutical Co. also gained 11.46 percent to close at 106,000 won after it announced a plan to develop a COVID-19 cure.

Investor sentiment largely turned positive toward biotech and drug stocks after Samsung Biologics Co., the bellwether stock in the biotech sector, last Friday announced a deal with Vir Biotechnology Inc. to mass-produce an antibody candidate to neutralize coronavirus. Shares of Samsung Biologics spiked 16.82 percent on that day alone.

Earlier, Celltrion Inc. rekindled investor investment in bio stocks after it released a roadmap to develop a COVID-19 neutralizing antibody. The buying spree spread to its affiliated companies Celltrion Healthcare Co. and Celltrion Pharm Inc. that are less related to drug development.

Another tailwind that propels investor sentiment in the sector is an R&D momentum that began with Kolon Life Science whose stock price extended the winning streak with surge to the daily ceiling for the second day in a row on Tuesday after its osteoarthritis drug Invossa was given a second chance for a clinical trial in the United States despite its suspension at home over an ingredient mix-up.

But the rise in the stock market is not felt in the broad bioindustry, which is facing business challenges in the prolonged COVID-19 crisis.

On Monday, the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA) sent a proposal to the government for enhanced support and drug price deregulation for the industry, saying that COVID-19 has caused massive revenue losses amid many adverse factors such as disruption in R&D activities, uncertainty in the supply of pharmaceutical ingredients and the hike in raw material prices.

The association said the local biopharmaceutical industry is feared to lose at least 1.8 trillion won this year as the number of patients visiting hospitals has dropped by up to 46 percent since the spread of COVID-19 began.

Source: https://pulsenews.co.kr/view.php?year=2020&no=394924