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CanSino Biologics' Covid-19 Vaccine Shows Early Promise

Further studies underway to determine if shot protects against virus

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Barry Cohen
May 26, 2020
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A vaccine against Covid-19 from a Chinese company showed promise in early-stage testing, according to an article in Lancet. The immunization from CanSino Biologics Inc. (

HSKE:06185, Financial) was found to be safe, well tolerated and able to generate an immune response against the coronavirus.

However, further research is needed to determine whether CanSino’s vaccine actually prevents infection. One analyst was less than enthralled by the study's results. The Pharma Letter reported that Evercore ISI biotech analyst Umer Raffat called the findings "underwhelming" in a note to clients, while acknowledging the uncertainty around what would be needed for immunity.

Perhaps that skepticism is behind the more than 30% drop in the price of CanSino shares since last Wednesday, including a decline of more than 25% today to about $22.62. Despite the dip, the stock is still up 200% since March, when the company announced it had joined the race to develop a Covid-19 vaccine.

The 11-year-old company went public in March 2019, raising $160 million in a heavily oversubscribed initial public offering. Its market value is currently about $5 billion. That’s heady territory considering the company had no revenue in 2019 and suffered an operating loss of $28 million.

The study of the CanSino vaccine did show some adverse reactions in participants, none of them to be considered serious. The most common complaint was pain where the drug was injected. Other reported issues were fever, fatigue, headache and muscle pain. Nevertheless, the study showed the vaccine produced neutralizing antibodies and T-cell response against Covid-19, but more research is needed to prove it provides protection from the coronavirus.

Some traders said a number of large transactions may have triggered last week’s selloff, with at least 17 trades comprising more than 10,000 shares each changing hands last Thursday, according to Bloomberg. Eli Lilly & Co. (

LLY, Financial) is the company’s biggest shareholder with a 15.5% stake, according to an April filing.

It appears CanSino also got caught in the blowback that hit the other leading Covid-19 vaccine developer, Moderna Inc. (MRNA), whose shares have slid about $20 since last week, but are still up are up more than 200% year to date. Investors’ enthusiasm may have been tempered by the knowledge that both companies’ drugs are only in the early stages of testing and most vaccines at that point rarely cross the finish line

That concern was echoed by Castor Pang, head of research at Core Pacific-Yamaichi International Hong Kong. Bloomberg reported Pang said no one really knows what CanSino is really worth. “People are making bets on the success of its vaccine, but the trial is just in stage two and there is possibility for it to fail,” he added.

To double its chance for success, CanSino recently struck an agreement with Vancouver-based Precision NanoSystems Inc. to co-develop another potential vaccine. The Chinese company will conduct testing of Precision’s experimental injection and has the right to commercialize it in Asia, excluding Japan, according to a company statement.

Disclosure: The author holds a position in Eli Lilly.

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