Domestic contract manufacturing organizations (CMOs) of the Sputnik V COVID-19 vaccine have enjoyed a bullish run on the stock market this week, as the government began to consider use of the Russian coronavirus vaccine to deal with a supply shortage of Pfizer and Moderna products.
President Moon Jae-in recently ordered his staff to review the feasibility of using Sputnik V, according to sources familiar with the issue. The Ministry of Food and Drug Safety also asked the foreign ministry to collect data on the safety of the Russian vaccine.
“The fact that the President made the order proves that the Office of National Security and the Ministry of Foreign Affairs are talking with their Russian counterparts about a summit with President Vladimir Putin,” a senior government official said on condition of anonymity.
These measures led to rapid hikes in the stock prices of Korean CMOs of Sputnik V and companies that invested in those producers.
EID’s and Etron’s share prices hit their daily ceilings of 590 won and 1,070 won, respectively, Thursday, while their affiliate Ehwa Technologies Information soared 25.71 percent.
EID and Etron invested a combined 20 billion won ($18 million) last December in Hankook Korus Pharm, GL Rapha’s subsidiary that will produce Sputnik V here starting next month in accordance with its contract with the Russian Direct Investment Fund (RDIF), the country’s sovereign wealth fund that financed the vaccine development.
The price of Hankook Korus Pharm’s unlisted stock reached the new high of 129,000 won, Thursday, following a surge from 51,500 won a week earlier with the expectation of its initial public offering (IPO) during the first half of next year. Sources said the drugmaker hired Kiwoom Securities as the underwriter for its planned IPO recently.
Korea Asset Investment Securities’ stock price also touched its daily increase limit of 13,500 won because it holds an 8.58 percent stake in Quratis, one of the participants in the GL Rapha-led consortium for the Sputnik V production.
Share prices of other participants of the GL Rapha-led consortium, such as ISU Abxis, Binex and CKD Bio, and members of another consortium comprised of Huons Global and Prestige BioPharma, also rose sharply.
The vaccine produced is intended only for export at this moment, but investors are betting on the likelihood of the use of Sputnik V here.
“Given that support from China and Russia is inevitable to improve inter-Korean relations, the President’s order shows his willingness to raise the vaccination rates using the Russian vaccine and to actively cope with vaccine issues after a crushing defeat in the by-elections,” another government official said.
The ruling Democratic Party of Korea’s (DPK) presidential candidates and those who will run for the forthcoming party leader election are also calling for a review of the Russian vaccine.
Gyeonggi Province Governor Lee Jae-myung said Wednesday he requested Cheong Wa Dae to review various coronavirus vaccines, including Sputnik V, according to the Yonhap News Agency. Rep. Park Yong-jin of DPK said in a KBS radio interview that he agrees with Lee’s idea. Ruling party lawmaker Song Young-gil emphasized the necessity of a contingency plan, such as the use of the Russian vaccine in addition to those of Pfizer and Moderna.
According to the RDIF, Sputnik V demonstrated an efficacy of 97.6 percent, based on the analysis of data from 3.8 million vaccinated persons in Russia. It said the data confirms that its vaccine approved for use in 60 countries is one of the most effective tools for the prevention of the coronavirus.
The Russian sovereign wealth fund has yet to comment on the Korean government’s move to review the domestic use of the Russian vaccine, but RDIF CEO Kirill Dmitriev said last week that Korea is one of its major partners for the production of Sputnik V.
