A warehouse worker checks boxes of Lianhuaqingwen capsules at a Shijiazhuang Yiling Pharmaceutical facility in Shijiazhuang, capital of Hebei province, on Jan 30, 2020. [Photo/Xinhua]

While the COVID-19 pandemic has swept a chill through the business world in general, causing many to struggle for survival in a sluggish market, the pharmaceutical industry is riding high on robust demand.

Traditional Chinese medicine businesses, in particular, have recorded an outstanding performance in the stock market in recent months, becoming a new favorite destination of capital, due to the unique role played by TCM in the fight against the virus.

As of May 22, nearly 50 listed biopharmaceutical companies in China had seen this year's growth in equity value surpass 50 percent, compared with that before the COVID-19 outbreak, The Economic Observer reported, citing data from Wind, a financial data service provider.

Eight of them, including Yiling Pharmaceutical, doubled their stock prices, the newspaper reported.

Yiling, headquartered in Shijia-zhuang, capital of Hebei province in North China, witnessed its stock prices hit the "limit up" levels — the upper trading curb mandated by the exchange to tame volatility — several times since the outbreak of the disease.

According to its first-quarter report released in April, the company generated more than 2.33 billion yuan ($330.6 million) in business revenue, an increase of 50.56 percent from the same period in 2019.

One of its signature products, Lianhua Qingwen capsules and granules roughly contributed 66 percent of the revenue, reaching more than 1.54 billion yuan, almost double year-on-year.

Inspired by three classical TCM recipes from the Han (206 BC-AD 220), Ming (1368-1644) and Qing (1644-1911) dynasties, Lianhua Qingwen is a patented drug. Its research started during the SARS epidemic in 2003, and a year later, it was approved for production in China.

The innovative drug, which won second prize at the 2011 National Science and Technology Awards, has been selected as a medical supply covered by the national medical insurance system.

Unique strength

A white paper titled "Fighting COVID-19 China in Action", released by the State Council Information Office in early June, recognized "the unique strength of TCM in preemptive prevention, differentiated medication, and multi-targeted intervention, and at every step of COVID-19 treatment and control".

At a news conference organized by the office in March, Lianhua Qingwen was among the officially recommended TCM treatments for the disease, among three drugs and three formulas.

Lianhua Qingwen was also recommended for a national treatment scheme targeting COVID-19 cases from its fourth to seventh edition. The plan was released by the National Health Commission and the National Administration of Traditional Chinese Medicine.

In addition, local health and TCM authorities, including those in Beijing and Hubei province, recommended the drug in their respective treatment plans.

Yiling has beefed up its production of the drug since the outbreak of the virus.

In late January, all of its production lines were used to make Lianhua Qingwen, with its daily peak output reaching 53 million capsules and 2 million bags of granules.

The focus on rolling out the sole drug remained until early March, when the company began to resume production of its other patented medicines.

Yiling will continue to promote sales of Lianhua Qingwen from the perspectives of branding, distribution channels and retail outlets, said Wu Rui, board secretary of the company.

With the reopening of schools and the resumption of business in China, the drug is expected to continue its growth momentum, contributing to protecting people's health, Wu added.

Yiling plans to expand production related to Lianhua Qingwen, with an annual goal of adding 7.5 billion capsules, 990 million bags of granules and 2.1 billion tablets, according to a company statement in March.

Rising profile abroad

In addition to the flourishing domestic market, Yiling is also eyeing overseas opportunities.

In a host of videos and pictures of "health bags" handed out by China's embassies and consulates as an emergency aid measure to help overseas Chinese students fight the pandemic, which were shared on social platforms, Lianhua Qingwen was a standard item.

By the end of April, Yiling had made donations, in funds and products, totaling nearly 20 million yuan to fight the pandemic at home and abroad. These included Lianhua Qingwen capsules worth more than 3.5 million yuan in total to various countries including Italy, Thailand and Iraq via the Red Cross Society of China.

"The biggest challenge of exporting TCM is the difference in culture between China and Western countries," Wu said. "A lack of knowledge or understanding of TCM among overseas users, as well as different approval systems for pharmaceuticals in various countries, curbs the global promotion of TCM."

However, the situation has changed. "Especially in the fight against the pandemic, TCM has been widely used and proved to be effective in clinical treatment, enabling an increased profile and gaining acceptance globally," she said.

The company announced on June 29 that it had received the drug registration license for Lianhua Qingwen issued by the Food and Drug Department of Laos' Ministry of Health, thus making the list of the drug's export destinations even longer.

Besides Laos, it has also been approved to be put on the market in Brazil, Indonesia, Canada, Mozambique, Romania, Thailand, Ecuador and Singapore, as well as China's Hong Kong and Macao, according to the company.

At the same time, Yiling is stepping up preparations for registration of the drug in other countries.

Lianhua Qingwen was approved to enter the United States for its Phase II clinical studies by the US Food and Drug Administration in December 2015, one of the TCM compounds worldwide to receive FDA clinical research, the company said.

The research was initiated in Virginia in September 2016, according to a company statement.

Yiling has set up joint medical research centers in the Netherlands and the United Kingdom to promote TCM internationalization.

Innovative muscle

Behind the marked achievements is the company's strong research and development capacities.

"Sustainable innovation is the prime engine to drive Yiling's growth," said Wu Xiangjun, general manager of the company.

The company is home to a work station, where a group of academicians of the Chinese Academy of Sciences and the Chinese Academy of Engineering work toward major technological breakthroughs and training researchers.

They, together with other domestic experts, have formed an innovative development consulting committee and made a series of achievements in biopharmaceutical R&D.

The company has developed more than 10 patented drugs, all approved to go to market, news portal iFeng's financial channel reported.

Another group of 29 new drug varieties are under development, and more than 20 reserve varieties have been selected, forming a series of patented drugs at different R&D stages.