Shares of two Korean biotech companies rose on the news that the developer of the Russian Covid-19 vaccine CoviVac applied to the World Health Organization for prequalification of the vaccine.

The WHO prequalification is likely to allow the vaccine to be supplied to developing countries through the COVAX facility, a global initiative for an equitable distribution of Covid-19 vaccines.

However, some local companies which had been expected to manufacture CoviVac in a contract manufacturing organization (CMO) deal have not released any clear plan or position. Industry watchers are questioning whether they will be able to push for the CoviVac production.

Despite uncertainties over CMO business for CoviVac, shares of Human N, a biotech firm on Kosdaq, climbed 6.67 percent to close at 12,000 won ($10.7) on Thursday. Wellbiotec, listed on Kospi, also went up 8.38 percent to close at 3,945 won on the same day.

The two companies’ stock prices gained significantly while other pharmaceutical and biotech shares suffered a setback since the resumption of short selling on Monday.

Both of the two firms are being cited as businesses related to Korean CoviVac manufacturing projects.

CoviVac is a Covid-19 vaccine developed by the Chumakov Federal Scientific Center for Research and Development of Immune and Biological Products of the Russian Academy of Sciences.

In April, each of the two companies invested 7 billion won in MP Corporation (MPC). This special purpose company has the exclusive right for consignment production of CoviVac and distribution of the vaccine in ASEAN countries.

Earlier in March, Human N signed a memorandum of understanding with MPC for manufacturing, licensing, and distributing CoviVac in Korea and other countries.

Unlike AstraZeneca and Janssen’s virus vector vaccines or Pfizer and Moderna’s mRNA vaccines, CoviVac is an inactivated vaccine with a lower chance of causing adverse reactions. CoviVac can be distributed and stored at a general refrigeration temperature of 2 to 8 degrees Celsius.

The Chumakov research center is conducting a phase-3 trial of CoviVac in 32,000 people after winning Russia’s regulatory approval for inoculation and the phase-3 study on Feb. 19. The research institute is also supplying live polio vaccine and yellow fever vaccine to the WHO.

However, the Korean production of CoviVac has a bumpy road ahead.

Thelma Therapeutics, which had been pushing for a CMO deal to produce CoviVac, has financial issues.

After the company received a disclaimer of opinion from its 2020 business report audit, the Korea Exchange suspended the trading of Thelma Therapeutics shares and granted a year-long grace period for improvement. For a year, the trading of the company’s shares will be banned.

The company also withdrew its plan to issue convertible bonds. The regulator said it would designate it as a company with unfaithful disclosure.

As the prospect for Thelma Therapeutics’ CoviVac business dimmed, observers raised a possibility that GC Pharma, which has a manufacturing facility, could sign a deal with the Russian institute for CoviVac production.

In March, officials at the Chumakov Institute visited GC Pharma’s factory in Ochang and Hwasun.

GC Pharma had not been actively denying outsiders’ speculation for direct production of CoviVac but turned more cautious in late April, sources said.

An official at GC Pharma declined to comment on the issue.

Human N and Wellbiotech have recently changed their business areas to biotech. As they have barely experienced biotech business, their roles in CoviVac production are questionable, industry officials said.

In response, an official at Human N said the company did not have any clear progress for CoviVac manufacturing in Korea but kept discussing consignment production after Russian officials inspected the production site.