Ascendis shares in steep rise after US chloroquine drug endorsement

By Sandile Mchunu Time of article published Apr 9, 2020

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DURBAN - The share price of JSE-listed Ascendis Health leapt 30.43percent on the JSE yesterday after the group announced that its drug chloroquine had been approved by the US Food and Drug Administration to treat patients who were severely ill as a result of Covid-19 in an emergency situation.

The share closed at R0.60.

Chloroquine, a drug historically used for the treatment and prevention of malaria, is manufactured by Ascendis Health’s subsidiary Remedica, which is based in Cyprus.

However, the South African-based global healthcare company said yesterday that since there were no approved treatments for Covid-19 yet, the FDA had authorised the use of chloroquine for emergency use for severely ill Covid-19 patients admitted to the hospital.

“Chloroquine has been submitted to the FDA for testing to establish long-term efficacy and safety in the US.

“This has led to a significant increase in demand for chloroquine. However, it is too early to speculate on the positive impact of the increased demand on Remedica’s financial performance,” the group said.

Remedica also manufactures generic pharmaceuticals focusing on anti-retrovirals (ARVs) and antibiotic treatments.

Ascendis said the continued production of ARVs in the fight against Aids remained fundamental to stemming the impact of Covid-19 on those who were immune compromised.

Ascendis acquired Remedica in 2016 for 260million (R5.2billion), but the group wanted to sell the business last year.

In December, Ascendis’ share price shed more than 19percent after the group announced that it had terminated negotiations with the preferred bidder for the disposal of Remedica.

The group said in South Africa, Ascendis Pharma continued to manufacture at maximum capacity during the lockdown period to supply its products to all customers, ensuring that the government tenders were fulfilled, including additional quantities required due to Covid-19.

Ascendis Pharma said that drugs treating lifestyle diseases such as high blood pressure, heart disease and diabetes like zetenol, enalapril, and metformin were supplied to patients on chronic medication to ensure compliance to reduce co-morbidities during the Covid-19 pandemic.

“Ascendis Pharma continues to work closely with local and international manufacturers and distribution partners to ensure consistent supply of pharmaceuticals to the South African market,” the group said.

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