By Jiahui Huang


Chinese pharmaceutical stocks rose sharply Thursday on hopes for government support, with analysts citing an alleged draft proposal on drug innovation widely circulated online and on social media.

Hangzhou Tigermed Consulting led the gains among CSI300 companies, hitting its maximum 20% daily limit on the Shenzhen Stock Exchange, while its Hong Kong shares were 19% higher.

Shouyao Holdings (Beijing) advanced 20%, Hinova Pharmaceuticals added 10% and Shanghai Medicilon gained 8.6% in China trade. Sichuan Kelun-Biotech Biopharmaceutical rose 13.5% in Hong Kong.

The rally came after a document purportedly issued by state planner National Development and Reform Commission made the rounds online and on social media after the market closed on Wednesday.

The document proposed government support for the development of innovative drugs in China, including through possible new funds for supplemental payments for innovative drugs, financing opportunities for loss-making startup biotech companies, support for initial public offerings and shortened approval periods related to clinical trials.

The NDRC didn't immediately respond to a request for comment by Dow Jones Newswires.

State media Shanghai Securities Journal cited the proposal as a possible driver of the rally.

Nomura's head of China healthcare research Jialin Zhang said the policy would support businesses for consulting service providers like Tigermed to bring in more clients for biotech companies. The document shows China's continued support to develop innovative drugs, and better balance maintaining the sustainability of medical insurance funds and support cutting-edge life science breakthroughs, he wrote in a research note.

Still, "a biotech player's (even the sector's) success will take time to materialize and cannot be accomplished in a short period," Zhang added.

China's healthcare stocks have been under pressure for the past three years.

An anti-corruption campaign in the medical sector last year hit pharmaceutical companies hard while U.S. bills aiming at Chinese biotech companies for national security reasons have hurt biotech stocks more recently.


Write to Jiahui Huang at jiahui.huang@wsj.com


(END) Dow Jones Newswires

03-14-24 0307ET