(Yicai Global) March 2 -- Shares of BrightGene Bio-Medical Technology plunged after the Shanghai Stock Exchange upbraided the company for incorrectly stating that it could mass-produce an experimental antiviral drug from Gilead Sciences which is considered the most hopeful treatment for the novel coronavirus.

BrightGene's stock [SHA:688166], which trades on Shanghai's Nasdaq-like Star Market, fell by the daily limit of 20 percent today before closing 14.7 percent lower at CNY53.22 (USD7.62).

The exchange criticized BrightGene and another company, Wuchan Zhongda, for incomplete information disclosure regarding their announcements on remdesivir, it said in a statement yesterday. The bourse also decided to regulate the board secretaries of both firms.

On Feb. 11, BrightGene said it had successfully developed the synthesis process and preparation technology for the active pharmaceutical ingredient in remdesivir and had mass-produced remdesivir API with preparations under way. The next day, its board said that BrightGene's copy of remdesivir was not a laboratory sample, but one that could be mass-produced.

On Feb. 12 and 13, BrightGene's shares surged 20 percent each day, before gaining a further 10.2 percent on Feb. 14. Stocks listed on the Star Market are allowed to rise or fall by a maximum of 20 percent a day.

BrightGene's mass production claim was actually experimental production. BrightGene has neither obtained approval from the drug regulator, nor authorization from the patent owner, and does not have the necessary qualifications for commercial production of remdesivir, the SSE said in its statement.

On Feb. 13, Wuchan Zhongda said that its subsidiary Jiangsu Coben Pharmaceuticals' preparation project for remdesivir, specifically targeting Covid-19, was approved by the government of Beixin Town, Qidong city, in Jiangsu province. Thereafter, shares of Wuchan Zhongda [SHA:600704] rose by the daily limit. It closed up 2.9 percent today at CNY4.91.

After regulatory supervision, Wuchan Zhongda conceded that Coben Pharma's remdesivir project had a risk of uncertainties and the unit had no significant effect on the parent's operating performance. But the SSE noted that Wuchan Zhongda's risk warning was too general, lacking specific notifications of risks, with incomplete information disclosure.

China has started phase 3 clinical trials of remdesivir for the novel coronavirus pneumonia, with results due to come out in April.

Editor: Peter Thomas