Bio Stocks Resilient to COVID-19

[Asia Economy Reporter Song Hwajeong] Amid increased volatility with the stock market plunging due to the resurgence of the novel coronavirus infection (COVID-19), biotech stocks showed an upward trend, once again demonstrating their particular strength in the COVID-19 market environment.

According to the Korea Exchange on the 21st, among the top market capitalization stocks from the previous day, only pharmaceutical and biotech stocks recorded gains. Among the top 10 market cap stocks, Celltrion was the only one to rise on the KOSPI, increasing by 0.33%, while on the KOSDAQ, Celltrion Pharm and Genexine closed up 1.28% and 0.55%, respectively.

The KOSPI and KOSDAQ fell by 3.66% and 3.37%, respectively, the previous day, with the KOSPI dropping below the 2300 level and the KOSDAQ falling below 800. Concerns over the resurgence of COVID-19 pulled the indices down. While most stocks showed weakness, biotech stocks alone showed an upward trend. Among all sectors on the KOSPI, only pharmaceuticals rose by 0.14%. Most of the stocks hitting the daily upper limit in the sharp decline were biotech stocks. On the previous day, Cellmat Therapeutics (29.99%), Philosis Healthcare (29.98%), Shinil Pharmaceutical (29.93%), Woori Bio (29.93%), United Pharmaceutical (29.9%), GeneOne Life Science (29.84%), and Wooridle Pharmaceutical (29.8%) all recorded consecutive daily upper limits.

Cellmat Therapeutics surged to the daily upper limit after announcing that the global Phase 3 clinical trial application for 'Neovir,' a COVID-19 treatment under development, is imminent. Unlike the ‘Direct Acting Antivirals (DAA)’ widely used in existing COVID-19 treatment clinical trials, Neovir’s main mechanism of action is virus infection and proliferation suppression through immune enhancement. The global Phase 3 trial will evaluate Neovir’s antiviral efficacy in patients with mild COVID-19. Philosis Healthcare’s affiliate, Philosis, received the first FDA approval in the U.S. for its specimen collection kit, and Wooridle Pharmaceutical continued its recent streak of daily upper limits after obtaining export approval for its COVID-19 rapid diagnostic kit from the Ministry of Food and Drug Safety.

As COVID-19 spreads rapidly again, it is expected that companies developing treatments, vaccines, and diagnostic kits will continue to show strength. These stocks performed well even during the sharp market downturn in March. Lee Dong-geon, a researcher at Shinhan Financial Investment, said, "With concerns over the resurgence of COVID-19, interest in pharmaceutical and biotech companies developing COVID-19 treatments and vaccines will rise again," adding, "At this point, it is time to focus on pharmaceutical and biotech companies with solid fundamentals despite concerns about the COVID-19 resurgence."

This content was produced with the assistance of AI translation services.