(Yicai Global) June 28 -- Guangdong Highsun Group announced earlier this month it had developed a medicine for African swine fever and would invest heavily to commercialize it, received an official notice denying its application to conduct clinical trials today.
Shares [SHE:000861] of the firm, which planned to throw CNY100 million (USD14.5 million) into the project, plunged on three occasions almost to the 10 percent limit which stops their trading, per bourse rules, eventually closing down almost 5.8 percent at CNY2.94 (USD0.43 cents).
A research team cooperating with Highsun submitted the clinical trial application for the drug yesterday, but Hainan province's department of agriculture and rural affairs roundly rejected it this morning in the notice, which stressed that the researchers may not conduct any unauthorized clinical trials in any guise without government approval.
Property management and leasing firm Highsun Group said on June 11 it planned to cooperate with a team of natural medicine researchers in China's southernmost province of Hainan to invest in and develop industrial production of a medicine that prevents and treats African swine fever, adding it penned a CNY900 million (USD130 million) deal to that end with Wuhan-based Jinzhu Agricultural Development, the company undertaking the drug development.
Highsun's share price spiraled upward for four straight days after its announcement on June 11, but it was unable to offer any experiment data to back its claim.
The researchers development process for new medicines was also unregistered, China's Ministry of Agriculture and Rural Affairs, which is the country's vaccine watchdog, said in a statement two days later, adding the drug's so-called efficacy in preventing and treating African swine fever lacks any scientific basis without animal test data.
The Guangzhou-based property management and leasing firm announced on June 11 its plan to cooperate with a team of natural medicine researchers in China's southernmost province, the island of Hainan, to invest in and develop industrial production of a medicine that prevents and treats African swine fever.
The team's alleged R&D results were quite suspicious, ensuing inspections by Chinese media found. For instance, Xu Qitai, the head of the team, has been mainly developing areca -- or betel -- nut products and dietary supplements in recent years and has little connection with vaccines and veterinary drugs. The registered address of the project company was also a hotel room. Jinzhu Agricultural Development decamped from its hotel room headquarters after the agricultural ministry revealed the firm has no permits to produce drugs, Yicai Global reported.
Highsun, through its subsidiaries, makes and sells consumer goods, distributes promotional products, and offers advertising services. It also produces raw materials for diapers, as well as disposable bags, stationary products, and advertising materials and sells advertising space.
African swine fever is an acute, virulent contagious disease, with an up to 100 mortality rate in pigs, for which as yet no effective inoculant exists. The first domestic case of it was diagnosed in Northeast China in August, and it has gradually since spread to the whole country, seriously impacting pig production and supplies in all regions of the country.
Editor: Ben Armour