From 'Class B A Tube' to 'Class B B tube', where is the epidemic concept stock going?

The history of "Class B A tube" has come to an end.

On December 26, the new coronavirus infection will return to the "Class B and B" category, as the National Health Commission issued a notice on the issuance of the overall plan for implementing the "Class B and B tube" for the novel coronavirus infection.

The change in classification means a radical change in COVID-19 prevention and control efforts. In response, the capital market responded: the Shanghai, Shenzhen and chinext indexes rose.

However, the epidemic concept stocks are very lonely. The stock prices of both vaccine companies and pharmaceutical companies in the oral medicine sector fell sharply.

Behind this, reflects the market on the epidemic concept stocks of huge mood swings. Of course, this does not mean that COVID-19 stocks are dead.

Considering the trend of the epidemic overseas, multiple rounds of shocks may be unavoidable. This indicates that COVID-19 vaccine and oral medicine are still the best tools to use.

But a central question is, who can?

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From "Class B A Pipe" to "Class B B Pipe"

According to the degree of infectivity and harm, legal infectious diseases are divided into A, B and C categories in our country.

Among them, class A infectious diseases, which have the most serious harm degree, have the characteristics of fast spread, high fatality rate, wide spread and so on, and have great social harm. After class A, the harmfulness of Class B and Class C infectious diseases gradually decreases.

The degree of harm, control measures naturally vary. Among them, the control of class A infectious diseases is the most stringent. According to China's Law on the Prevention and Treatment of Infectious Diseases, isolation measures should be taken for Class A infectious diseases, which can be divided into three points:

Patients and pathogen carriers shall be quarantined for treatment, the duration of which shall be determined according to the results of medical examination;

Suspected patients should be treated in isolation in designated places until confirmed;

Patients, pathogen carriers and close contacts of suspected patients in medical institutions shall be placed under medical observation in designated places and other necessary preventive measures shall be taken.

To put it simply, infected and suspected cases of Class A infectious diseases need to be isolated for treatment, while close contacts need to be placed under medical observation, so as to block the route of transmission as much as possible.

In contrast, the prevention and treatment of patients with class B and C infectious diseases is simpler, requiring only the necessary treatment and transmission control measures according to the condition, without the need for isolation.

However, at present, there are only 2 class A infectious diseases in our country, the plague and cholera respectively. The positioning of the new coronavirus, from the beginning for B class infectious diseases.

However, in January 2020, the Health Commission announced that it would take measures to prevent and control class A infectious diseases when it included the virus as a Class B infectious disease in consideration of its spread and harm.

That is why, in the past few years, our "prevention and treatment" of COVID-19 has been inseparable from strict measures. Considering the destructive power of COVID-19, the "Class B" measures are undoubtedly the right choice.

Of course, the coronavirus continues to change. Now, with the combination of factors such as the mutation of the virus strain, there is no reason to change the prevention and treatment of COVID-19 infection from the former "Class B A" to "Class B B".

However, the downgrading of COVID-19 response does not mean the outbreak is over.

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Characteristics of the subsequent development of the epidemic: multiple rounds of impact

How will the epidemic affect our lives?

The United States may be a reference point. In terms of quarantine measures, the United States is one of the most open countries.

Overall, the United States has experienced about seven peaks since the first shock in 2020. And, paradoxically, the shock wave does not diminish over time, but intensifies in irregular cycles.

Not only in the United States, but also in Asian countries such as Japan and Singapore, the pattern of epidemic transmission is roughly the same as that in the United States: multiple rounds of impact. Why does this happen? There are two main reasons:

One is that neutralizing antibody titers decline over time, whether naturally infected or after vaccination. This also means that the protective effect will gradually diminish.

Second, the virus mutates and eventually escapes. The mutation itself is very common during viral replication. After all, viruses need to keep replicating themselves, and along the way bugs will inevitably appear, along with mutant strains.

In the process of mutation, some "unlucky molecules" may produce a defective virus, which becomes a "weak chicken" without infection, or "burp" in the process of mutation;

However, there are some terrorists whose fighting power is significantly enhanced by mutations, such as stronger transmission ability, faster replication ability, and possibly immune escape ability.

Referring to the overseas epidemic situation, the virus mutation is the "culprit" of the shock wave constantly coming. As the chart below shows, since September, the epidemic in the United States has been on the rise again, because the virus strain has changed again:

The dominant strain BA.5 is being replaced by BQ1.1, BQ.1 and XBB.

In general, due to the immune escape characteristic, the novel coronavirus is not infected once and for all, but may "challenge" the human defense line several times in the future, thus bringing multiple rounds of impact.

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Epidemic concept stock, crisis and opportunity coexist

It is clear that, given the likely continuing impact of the pandemic, vaccines and therapeutics will be in long-term demand. Companies involved in the research and development of COVID-19 vaccines and treatments are also likely to continue to benefit.

However, as the virus strains continue to mutate, the logic at the poker table in the COVID-19 market will always change. For example, if COVID-19 vaccine companies do not make efforts in the face of the new strain, they will soon become obsolete.

For now, inactivated, adenovirus vector or mRNA vaccines are less effective against Omicron strains.

Even after 10 weeks of three doses of Pfizer mRNA vaccine, the protective effect remained modest, decreasing to 45.7%. A single dose of mRNA vaccine was 90% effective against the original strain, a steep decline.

In response, COVID-19 vaccine companies need to keep up with the changing speed of the virus by constantly updating and iterating their vaccines. Now, overseas vaccines have entered the era of bivalent.

No bivalent vaccine has been approved against Arcanum cron in China, but many domestic vaccines may have broad spectrum properties. For example, ReCOV, the recombinant protein vaccine of Rekbio, has shown good immune effect against multiple Arcanum Cron strains including BF.7.

For these players, if they can prove themselves in the end, there may be a chance to ride the wave.

Take oral medication for COVID-19. In theory, oral medicine is considered a "COVID-19 terminator" because it does not fear mutation, and the site of the attack remains no matter how the virus changes.

At present, the novel coronavirus oral medicines of domestic enterprises, including Simsen Pharmaceutical, Sentient Pharmaceuticals, Junshi Bio, Sinovac Pharmaceutical, are in the final sprint stage.

However, oral medication for COVID-19 is not entirely safe. In the long run, efficacy, and the corresponding range of application, will determine its ceiling.

For example, although Pfizer's Paxlovid has shown a protective effect of up to 89% for high-risk groups, it has no good therapeutic effect for high-risk groups with no underlying diseases or infected for more than 5 days. And Paxlovid does not protect against COVID-19 infection. A number of factors also directly limit the upper limit of Paxlovid.

Of course, if domestic oral medicine can break these constraints, it will certainly have a deeper moat.

Danger and opportunity often go hand in hand. In the face of the new coronavirus, which may continue to impact us, who can stand out from the rest of the domestic pharmaceutical companies?