SHANGHAI: Shares of Chinese healthcare firms soared on Monday (May 10), rebounding from last week's drubbing after a US proposal to waive patents for COVID-19 vaccines met with fierce opposition from European governments and pharmaceutical giants.
A sub-index tracking health care firms was 1.83 per cent higher at midday, after falling more than 6.8 per cent last week, its worst weekly performance in 10 weeks. That compared with a 0.15 per cent loss for the blue-chip CSI300 index on Monday.
The health care sector received a further boost after Shanghai Fosun Pharmaceutical said on Sunday that a subsidiary has agreed to provide a factory to make up to 1 billion doses annually of the COVID-19 vaccine developed by BioNTech in China.
On Monday, Fosun Pharmacetical's Shanghai shares soared by the 10 per cent daily limit. Its Hong Kong shares jumped as much as 22.58 per cent higher and were last up 17.78 per cent.
Shanghai shares of CanSino Biologics gained 9.344 per cent and its Hong Kong shares jumped 5.14 per cent.
US President Joe Biden backed a proposal last week to waive patent rights on coronavirus vaccines, but his support was rebuffed by European leaders who questioned the usefulness of a waiver and argued that making and sharing vaccines more quickly should take priority.
The European Union, however, is ready to discuss a concrete proposal around vaccine waivers despite scepticism, the chairman of EU leaders said on Saturday.
The jump in Chinese vaccine shares also came as analysts downplayed the threat posed by patent waivers.
"The main vaccine threshold is actually more on the production side, and patent liberalisation will not necessarily lead to a large number of mRNA vaccines being copied by companies," said Wang Ruizhe, an analyst at Capital Securities.
Pfizer-BioNTech and Moderna vaccines use new mRNA technology involving the injection of a small part of the virus's genetic code (RNA) to stimulate the recipient's immune response.
Wang said that a strong reaction from US pharmaceutical companies to the waiver proposal meant there were still "variables" around relaxations of vaccine intellectual property.