Medical stocks jump worldwide on mpox concerns

Shares of vaccine and other medical product makers that can help combat a fast-spreading mpox virus strain advance, after the World Health Organization declared an outbreak in Africa a global health emergency.

Medical tools supplier Precision System Science Co surged as much as 36 per cent in Japan, while virus detection kit maker Shanghai ZJ Bio-Tech Co gained more than 5 per cent in China. On Wednesday, US-traded shares of Bavarian Nordic A/S, one of the few companies with an approved mpox vaccine, closed up 33 per cent in New York.

Health-care stocks have reemerged on investors’ radars in Asia in recent days as Covid cases spike back up in parts of the region. The mpox outbreak adds another layer to their calculus on which of the sector players will quickly respond to the anticipated demand.

Also read: WHO calls mpox outbreak in Africa a global health emergency

“The recent emergence of the mpox virus in Africa has the potential to evoke memories of the Covid-19 pandemic,” Manish Bhargava, a fund manager at Straits Investment Holdings in Singapore. “Given the early stage of the outbreak, investors are expected to maintain a watchful stance, awaiting further data before reacting.”

A mutated strain of mpox — a virus that causes unsightly, painful rashes and lesions — has spread to at least six African countries, infecting about 15,000 people and killing more than 500 in the Democratic Republic of Congo this year alone. The variant was first reported in the DRC less than 12 months ago.

The WHO last called mpox a public health emergency of international concern in May 2022, when cases of a milder strain erupted globally. When the WHO lowered its alert level a year later, cases in Africa continued to increase.

Other Chinese companies that provide virus detection products also are in focus. Shares of Guangzhou-based Daan Gene Co, which develops diagnostic kits, surged to near its 10 per cent daily trading limit. Shares of Assure Tech Hangzhou Co, a producer of rapid test devices, rose as much as 5.3 per cent.

The stocks outperformed benchmark CSI 300, which climbed as much as 1.4 per cent.

Market reaction to the latest outbreak could be fleeting, Tony Ren, head of Asia healthcare research at Macquarie Capital, said.