Vaccine IP waiver move fails to lift local pharma counters

by ASILA JALIL / Pic by BLOOMBERG

SHARES of pharmaceutical companies in Malaysia are in the red after US President Joe Biden announced his administration supports a global waiver on patent protections for Covid-19 vaccines on Wednesday.

The European Union also expressed its willingness to discuss a proposal to waive intellectual property (IP) rights for Covid-19 vaccines.

About RM32 million was wiped off from four local pharmaceutical companies’ market value on the heels of the move.

MIDF Investment Bank Bhd VP and head of research Imran Yassin Mohd Yusof said such waiver will prove to be disadvantageous for pharmaceutical companies that developed a particular vaccine for the virus which is currently protected by the patent.

Therefore, as no local pharmaceutical companies have yet to produce their own vaccine, Imran Yassin said the move by Biden’s administration would actually benefit local pharmaceutical companies.

“Given the understanding of patent protection and the fact that none of the Covid-19 vaccines was developed by Malaysia pharmaceutical, we do not believe there should be any relationship between this development and the share prices of Malaysian pharmaceutical companies.

“In fact, it should be positive should Malaysian companies be able to produce the vaccine which its patent protection has been waived,” he told The Malaysian Reserve yesterday.

However, in the local front, Pharmaniaga Bhd’s market capitalisation fell to RM887.18 million at closing bell yesterday from RM916 million a day prior as its share price fell 11 sen or 3.14% to RM3.39 yesterday.

Pharmaniaga had announced in March that its unit Pharmaniaga Lifescience Sdn Bhd had entered into a supply and distribution agreement with the Health Ministry for the supply of 200,000 doses of Covid-19 vaccine.

Another company that registered a loss in market capitalisation is Kotra Industries Bhd which reduced RM2.95 million in value to RM365.4 million yesterday from RM368.35 million on Wednesday. Its shares closed two sen or 0.8% lower at RM2.47 yesterday.

Duopharma Biotech Bhd’s share price came in three sen or 1.05% lower at RM2.82 yesterday after its market capitalisation dropped by RM0.02 billion to RM1.99 billion yesterday.

As for Apex Healthcare Bhd, the company closed one sen or 0.34% lower yesterday bringing its market capitalisation to RM1.37 billion from RM1.38 billion on Wednesday.

The decision made by the US provides hope to poor nations struggling to gain an adequate volume of vaccines.

India, which currently records more than 300,000 new daily cases, is among the countries that have pushed for the World Trade Organisation to allow more drugmakers to manufacture the vaccines.

The waiver on vaccine patents, however, is opposed by big pharma companies. US Trade Representative Katherine Tai said that while it is important for businesses to have IP rights, the administration supports the waiver in order to end the Covid-19 pandemic across the world.