(Yicai Global) March 14 -- Shares of several Chinese drugmakers jumped after China’s drug authority approved 10 home-use Covid-19 test kits. Pharmacies and online drug stores have already started pre-sale of the products.

As of today’s lunch break, Wondfo Biotech [SHE: 300482] was trading up 13.1 percent at CNY67.58 (USD10.64). BGI PathoGenesis Pharmaceutical’s parent company BGI [SHE: 300676] rose 13.2 percent at CNY101.24 (USD15.94). Nanjing Vazyme Biotech’s shares [SHA: 688105] soared 14.4 percent to CNY121.55. Hotgen Biotech [SHA: 688068] jumped 11.4 percent to CNY214.11.

China’s National Medical Products Administration authorized the sale of Covid-19 antigen self-testing reagents developed by Guangzhou Wondfo Biotech, BGI PathoGenesis Pharmaceutical Technology, Beijing Jinwofu Bioengineering Technology, Nanjing Vazyme Biotech, and Beijing Savant Biotechnology on March 12. Five more home-used test kits developed by Wantai BioPharma, Beijing Hotgen Biotech, Bioscience (Tianjin) Diagnostic Technology, Chongqing M&D Biotechnology and Beijing Lepu Medical Technology were also approved by the NMPA yesterday.

China is facing a severe Covid-19 outbreak that has spread all over the country. According to the National Health Commission, China had 8,531 cases as of March 13.

The pre-sale price of a home-use test kit is CNY32.80 (USD5.18) on Meituan Maiyao, the e-pharmacy under Chinese delivery giant Meituan, with deliveries expected to start from March 20. “It is too expensive,” an industry insider told Yicai Global.

In Guangzhou, in souther China’s Guangdong province, the guidance price for home-use detection kits is CNY15. The wholesale price of the test kits may be up to CNY8 (USD1.26), industry insiders predicted. China's antigen reagents have always been centralized procurement-oriented, so it is reasonable for the wholesale prices of antigen reagents to fall to between CNY6 and CNY7 in the future, giving little profit margin for middlemen, according to an insider.

Once antigen detection reagents are implemented on a large scale, the demand will boom and the market scale will exceed that of nucleic acid detection reagents, a doctor in Shenzhen said. “This is the case for self-testing antigen detection reagents, as they are a consumer medical product.”

The retail price of self-testing reagents is around USD20 in North America, and the purchasing price for distributors is about USD5, said Deng Kegang, chairman of Shenzhen Diasia Biomedical Engineering, adding that a price drop will squeeze the profit margin of retailers. But as the demand is great, companies that master the whole supply chain still have big advantages in costs, Deng noted.

“About 95 percent antigen reagents used overseas are from China because their production requires manual assembly and China is the only country that can meet the demand for such a rapidly-growing capacity,” Deng told Yicai Global. Diasia can produce reagents for 5 million people a day and it is likely to raise the figure to around 20 million in the next two months, he added.

Diasia and Chinese medical device maker Andon Health have been exporting their reagents overseas and they have been seeking registration and approval in China.

Editor: Futura Costaglione