BEIJING, November 17 (TMTPOST)— Thanks to a large order that signaled the powerful potential as a supplier for Pfizer’s promising Covid treatment, Shenzhen-listed shares of Asymchem Laboratories, a leading Contract Development and Manufacturing Organization (CDMO) that provides integrated solutions to pharmaceutical and biotech companies across the world, rose by their 10% daily limit in early trading and settled 7% higher on Wednesday.
Source: Visual China
In a statement released late Tuesday, Asymchem said it has being offering CDMO services for a new small-molecule chemical drug developed by a major U.S. pharmaceutical company and two wholly-owned subsidiaries Asymchem,Inc. and Jilin Asymchem Pharmaceuticals Co., Ltd recently have signed new supply contracts from 2021 to 2022 for the new drug, so the total contract value amounted to US$480.94 million as of the signing day. In order to protect commercial secrets involved in the contract, Asymchem didn’t disclose its counterparty’s name but said it was the biggest client last year as revenue from services for it recorded RMB638 million, representing 20.25% of the company’s annual revenue. Many Chinese investment researchers and media outlets including The Economic Observer suspected the big client was Pfizer and the new drug Asymchem was working for was Paxlovid, a Covid-19 oral antiviral candidate Pfizer just applied for Emergency Use Authorization (EUA) with the the U.S. Food and Drug Administration (FDA) on Wednesday. Earlier this month, Pfizer revealed the clinical data from an interim analysis of the Phase 2/3 EPIC-HR study, which demonstrated an 89% reduction in risk of hospitalization or death compared to placebo in non-hospitalized high-risk adults with COVID-19, if Paxlovid taken in combination with a HIV drug Ritonavir within three days of onset of symptoms. Based on contract terms and the projected mass production timetable of Paxlovid, Asymchem’s latest order is expected to enter in commercial production in the fourth quarter and most of contract value would be recognized as revenue in 2022, a significant boost for the company’s performance.
Asymchem ranked the fifth in the global drug substance CDMO market and the first in the China-based commercial stage chemical drug CDMO market in terms of revenue in 2020, according to Frost & Sullivan. The stock jumped almost 50% year to date and up more than 10% this month alone as of Wednesday.