Bird Flu Sends China's Drug Stocks Flying

BEIJING (TheStreet) -- Stock advisers are telling Chinese investors to take a gander at drug and medical supply companies now that a deadly strain of bird flu is spreading on the eve of the country's annual Spring Festival travel blitz.

Buy signals have been flashing this week for vaccine manufacturer Hualan Biological, virus test kit specialist Da An Gene and drug maker Shanghai Kai Bao Pharmaceutical.

Analysts have also recommended shares in makers of traditional Chinese medicines designed to fight viruses and prevent disease. Recommended stocks included Yiling Pharmaceutical and Guangzhou Pharmaceutical.

Hualan has been working on an H7N9 vaccine since last year, when it got a green light from the World Health Organization to develop the product. A government drug regulator for China's Henan Province registered the vaccine January 3, clearing the way for clinical trials.

Meanwhile, the traditional Chinese medicine supplier Lianghua Qingwen, which is not listed, has been stoking public interest in bird flu drugs by advertising a product it makes from rare Tibetan plants as an immune system-booster that prevents H7N9.

On the Shanghai Stock Exchange, Hualan saw its stock value slip 0.1% Thursday in heavy trading to close at 29.43 yuan. Guangzhou's shares fell 0.3% to finish at 26.33 yuan.

On the Shenzhen exchange Thursday, shares in Kai Bao jumped 3.7% to close at 17.48 yuan, Da An stock rose 2.8% to finish the day at 15.66 yuan, and Yiling gained 2.1% to 34.93 yuan.

Since Jan. 1, health authorities say more than 40 people in Shanghai and four provinces have been confirmed to have been infected with the H7N9 strain of bird flu, which officials say is transmitted from live birds to people but not from human to human.

At least two people have died so far this month, coincidentally on the same day in Shanghai, according to China's National Health and Family Planning Commission. A 31-year-old man and a 77-year-old woman were admitted to separate hospitals Jan. 17 and died the next day.

The outbreak comes as hundreds of millions of migrant workers, university students and others prepare to travel to their hometowns for the traditional Spring Festival holiday period, which begins with the Chinese New Year celebration Jan, 31. Health officials fear travelers carrying live poultry could spread H7N9 infections.

-- Written by Eric Johnson in Beijing

At the time of publication the author had no position in the companies mentioned.

 

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