Impact: positive to Shineway and Guangzhou Pharma
With 21 confirmed H7N9 incidents, 6 deaths occurred. We believe names with pharmaceuticals or TCM nutritional products that could relieve flu-related symptoms are likely to benefit from daily headline news, such as Shineway (2877.HK) as its flagship products QKL is approved for this indication, and Guangzhou Pharma (0874.HK, Not Covered) as its banlangen is recommended by CFDA for disease prevention. We believe vaccine names, such as Sinovac (SVA.OQ, Not Covered), are likely to ramp up as well. However experience during the past decade demonstrated that pandemic-flu related rallies for vaccine names were always short-lived as vaccines are unlikely to be developed in near term.
Facts on H7N9 and the standard procedure
H7N9 is a new virus strain that seems transmissible from bird to mammals. According to WHO, the standard procedure is to review the H7N9 virus’ genetic sequence, to assess severity and transmission, to develop diagnostic tests and potentially to develop a new va ccine if needed. At present, the facts include 1) Chinese CDC has shared virus sequence with WHO and major western countries’ CDCs; 2) it appears H7N9 is highly lethal, however further surveillance is required as we do not know how many are infected with mild symptoms. It is possible this could be a mild but more widespread infection; 3) PCR based diagnostic tests have already been developed and delivered to hospitals; 4) new vaccine is not available, but it could take months to years to be developed.
On recent pandemic flu
According to WHO, 1) the H1N1 pandemic flu in 2009, which was originated in pigs and then mixed with human/bird f lu, killed 284,500 people, triggering a global pandemic outbreak; H1N1 is transmissible among humans. 2) the H5N1 virus, which was originated in birds, infected more than 600 people since 2003, and 60% of them died; H5N1 is not transmissible among humans. We highlight that H7N9 is not lethal to the host, unlike H5N1 that is highly lethal to birds. However it does not mean it is low pathogenic to mammals as well. Our thoughts on transmissibility between humans: mutation remains key Potential mammal-to-mammal transmission might be the worst case scenario, if H7N9 acquires the new capability th rough further mutations.
However this seems unlikely at present due to 1) a quick PubMed search suggests H7N9 was first identified in 2010 but no reports on such mutations have been identified; 2) H5N1 has circulated for 16 years but has not become transmissible among mammals. That said , we aspire for sequencing results from every single patient under a stringent surveillance program.