Durban-based global pharmaceutical giant Aspen Pharmacare saw its share price surge 9.29% to R153 on Wednesday – its highest level since November 2018 – following UK reports that a drug it manufactures in SA has seen positive trial results for treating severely ill Covid-19 patients.
The drug, known as Dexamethasone, is a corticosteroid used to treat various conditions. Doctors in the UK say the cheap and widely available drug has been part of trials of existing drugs to treat Covid-19, and has shown remarkable results for coronavirus patients on ventilators.
Dexamethasone has been shown to cut the risk of death of critically ill Covid-19 patients on ventilators by a third, and by a fifth for patients on oxygen treatment.
In a brief Sens statement on Wednesday, Aspen noted the preliminary results of the “drug trial using Dexamethasone in the treatment of patients with Covid-19 requiring respiratory intervention” and the media coverage around this.
Aspen is assessing demand
“It is confirmed that Aspen owns rights to this product and distributes both injectables and/or tablets containing Dexamethasone in a number of countries. Aspen markets an injectable Dexamethasone in South Africa, which is manufactured locally by a third party,” the group added.
Speaking to Moneyweb editor Ryk van Niekerk on the RSG Geldsake show on Wednesday night, Aspen CEO Stephen Saad said Dexamethasone isn’t a new drug: it is used to treat asthma, and is widely used in oncology, among other areas.
The World Health Organisation (WHO) states that Dexamethasone has been used since the 1960s to reduce inflammation in a range of conditions. It has been listed on the WHO ‘Model List of Essential Medicines’ since 1977 in multiple formulations, and is currently off-patent and affordably available in most countries.
“We’ve been very fortunate to have [the product] in both the tablet and injection form and we’ve got it across our [production] facilities and outsourced facilities across the world,” said Saad.
“We’ve been busy today trying to work out real demand,” he added.
“What we have seen with Covid-19 is that we have been very busy with our anaesthetic [drugs] portfolio across Europe … You have these big pulls in demand and sometimes the offtake isn’t there. Even in South Africa – where there [was initial] panic buying and then it dissipated. We’re busy trying to work out what is real demand and are looking internally to understand if we have all the components in place.”
Saad added that Aspen is “well-positioned to go into quick production” of the drug within its South African, Australian and European operations.
Enquiries from all quarters
Asked if the group has already seen a spike in demand, he said Aspen has seen enquiries for the drug “from everywhere”, including the South African government and the WHO.
“Our government has contacted us a couple of times already, wanting to understand the capacity and capabilities we have,” he said. “And, interestingly not just enquiring for South Africa, but for all of Africa, which I was particularly pleased to see … sort of working continentally.”
In a statement on Tuesday, the WHO hailed the initial success of the drug trial in treating Covid-19 patients. It said that according to preliminary findings shared with it, the benefit was only seen in patients seriously ill with Covid-19, and not in patients with the milder form of the disease.
“This is the first treatment to be shown to reduce mortality in patients with Covid-19 requiring oxygen or ventilator support,” WHO Director-General Dr Tedros Adhanom Ghebreyesus said.
“This is great news and I congratulate the government of the UK, the University of Oxford, and the many hospitals and patients in the UK who have contributed to this lifesaving scientific breakthrough,” he added.
Commenting on Aspen’s possible windfall, Wayne McCurrie, portfolio manager at FNB Wealth and Investment, said: “I am not sure how beneficial any new treatment will be for the drug companies, as there will be massive pressure on them to provide any treatment at the lowest cost possible. Any ‘profiteering’ would be totally unacceptable socially and also there’s legislation around this.”
McCurrie said that it is however “very good news” in the global fight against the Covid-19 epidemic.
Listen to Ryk van Niekerk’s interview with Aspen CEO Stephen Saad: