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MERS infection affects stock market
  • By So Jae-hyeon
  • Published 2018.09.10 16:25
  • Updated 2018.09.10 16:25
  • comments 0

Pharmaceuticals and biotech businesses are gathering renewed attention after the nation was hit by the first Middle East Respiratory Syndrome (MERS) outbreak in three years.

During the last MERS crisis, companies that had technology or candidate materials received a large sum of investment funds.

According to industry sources, the transaction volumes of stocks related to MERS have risen since after a 61-year-old man, who departed Kuwait and transferred in Dubai, tested positive for MERS.

As of 10 a.m. Monday, Geneone Life Sciences hit the upper limit price. The company’s stock is currently trading at 8,040 won ($7.12) with trading volume exceeding 1.78 million shares, more than 13 times larger than last Friday’s 129,975 shares.

The company, which possesses a MERS vaccine technology, is one of the businesses that saw their share prices hit upper limit price continuously in 2015. In November 2015, the U.S. Food and Drug Administration (FDA) had approved phase 1 clinical trial for the vaccine.

Geneone also signed an agreement with Inovio Pharmaceutical, a U.S. company, to co-develop a DNA-based MERS vaccine.

In Korea, the company received approval from the Ministry of Food and Drug Safety (MFDS) for phase 1/2a clinical trials in June and is now in the process of running the tests. Also, Geneone attracted attention after it published its preliminary phase 1 clinical trial results at the MERS Vaccine international Symposium, organized by the World Health Organization and International Vaccine Institute.

Bioneer’s shares also have soared in the early stages of the ongoing crisis but have since slowed down. The company’s stock was trading at 13,300 won in early morning Monday, a 9.92 percent increase from the previous trading day, but has slipped to 12,600 won as of 10 a.m.

However, the company’s trading volume reached 728,486 shares, six times higher than the previous trading day.

Bioneer introduced a MERS detection kit, which has received approval from the government. The kit can complete its diagnosis in four hours

Companies that have substances that alleviate MERS symptoms are also on the rise. As of now, there are no cures for MERS. However, a combination of antiviral drugs interferon and ribavirin can modulate the symptom.

Such indications have raised the stock price for HanAll Biopharma, which holds a patent related to interferon. The company’s stock rose 2.11 percent from the previous trading day to 31,500 won with a trading volume of 490,956 shares.

Shares for Jinyang Pharmaceutical, which markets products that contain ribavirin, also increased to 5,300 won, a 17.26 percent from the previous trading day, but has since calmed down. As of 10 a.m., the company’s stocks have fallen to 4,845 won. Like most other MERS-related companies, however, Jinyang’s trading volume increased almost 20 times with a trading volume of 638,914 shares.

As MERS comes from the coronavirus, the Choong Ang Vaccine Laboratories, which holds a patent on coronavirus, also saw its shares rise 15.38 percent to 33,000 won during mid-morning trading. Although the company’s shares dropped to 29,550 won later, its trading volume increased eight times and reached 951,736 shares.

However, some experts in the pharmaceutical industry advised investors to take caution in investing in MERS-themed stocks.

Experts based such warning on the fact that most of the companies are still in the development phase, and can topple at any time.

Also, as Korea has already suffered a MERS epidemic in the past, the boom might fizzle out soon if the government manages to contain any additional infections.

“Investors, who invest in MRES themed-stocks, need to take caution as the situation may end in a short-term supply and demand boost,” an industry executive said. “The current situation seems to reflect a transient interest in companies related to MERS.”


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