The stake held by the founding family of one of China’s largest traditional medicine groups has rocketed in value to $4.5bn after the latest Covid-19 outbreaks in the country triggered a renewed surge of interest in its coronavirus treatment.
Although the US has explicitly warned against the company’s medicine, shares in billionaire Wu Yiling’s pharmaceutical company Shijiazhuang Yiling Pharmaceutical have jumped more than 60 per cent since the end of December. The latest rally came on top of the stock’s 160 per cent gain in early 2020 after Beijing’s endorsement of its Covid treatment.
Shijiazhuang Yiling’s stock price had hovered at about Rmb8 ($1.26) before the pandemic, but it recently rose to record levels after the medicine was promoted in Hong Kong, closing out last week at Rmb31.5. The rally has boosted the value of the owning family’s almost 55 per cent stake in the company, listed on the Shenzhen Stock Exchange, to about Rmb28.8bn.
Wu is famous in China for developing a remedy out of centipede, scorpion, leech and cicada to treat cardiovascular diseases. His company sells a separate herbal remedy called Lianhua Qingwen, with ingredients including honeysuckle, liquorice root, apricot seed and forsythia, as a treatment for coronavirus. The remedy from Wu’s company was endorsed by both Zhong Nanshan, an expert advising the Chinese government on coronavirus, and Hong Kong’s leader Carrie Lam.
Hong Kong has been reeling from its biggest Covid outbreak of the pandemic while cases are also climbing in China, forcing the financial centre of Shanghai and other cities into lockdown.
Beijing has actively promoted traditional Chinese medicine on the global stage in recent years, and state media has trumpeted Shijiazhuang Yiling’s success in gaining regulatory approval in African and Middle Eastern countries.
But the US Food and Drug Administration, as well as Singaporean and Australian authorities, have warned that there was no evidence that Lianhua Qingwen had any effect on the virus, and cautioned against its use.
The FDA said claims that Lianhua Qingwen could prevent or treat Covid were “not supported by competent and reliable scientific evidence”, while Singaporean authorities said in November that there was “no scientific evidence” to show it can be used to prevent or treat Covid.
The company’s dramatic stock rise began after Lianhua Qingwen was recommended in Beijing’s official treatment protocols for coronavirus in March 2020.
Wu owns a 31.5 per cent stake in the company, while his son and daughter Wu Xiangjun and Wu Rui collectively hold 23 per cent, according to the company’s latest quarterly report.
From mid-2020 to late 2021 Shijiazhuang Yiling’s share price was volatile but slid downwards as China and Hong Kong appeared to have succeeded in containing the virus.
A version of the drug that was distributed in mainland China was initially not approved in Hong Kong, and local health authorities raided pharmacies that were selling it as recently as February.
But pro-Beijing lawmakers pressured the Hong Kong government in March, at the peak of the territory’s Omicron wave, to offer exemptions to batches of the medicine. Mainland companies have donated hundreds of thousands of packs to the city.
Pharmacists working in Hong Kong said they feared the spread of counterfeit versions of the remedy.
“The question is whether there will be counterfeit versions being sold in Hong Kong and if citizens can manage to recognise them,” said pharmacist Philip Chan. “Without undergoing proper registration, medicines could become a public health concern.”