(Yicai Global) Aug. 19 -- Huahai Pharmaceutical’s shares plunged despite the Chinese drugmaker unveiling an OEM production and local sales agreement with Pfizer Investment over the latter’s novel coronavirus treatment Paxlovid.

Huahai Pharmaceutical [SHA: 600521] shares closed down 8.5 percent at CNY19.96 (USD2.93) today.

According to the deal signed on Aug. 17, Huahai Pharma will provide Pfizer with contracted agent manufacturing services for Paxlovid sold in the Chinese mainland over the next five years, the Linhai, Zhejiang-province based firm said in a statement late yesterday. But the cooperation is not exclusive.

Pfizer will provide Huahai Pharma with substances for making Nirmatrelvir, an active ingredient for Paxlovid, besides another ingredient Ritonavir. Huahai Pharma will make Nirmatrelvir based on the substances and complete the combination and packaging of the two active agents.

Huahai Pharma did not provide any forecast for earnings from the cooperation but said signing the deal will not have a significant impact on its annual performance as the profit and revenue generated by the tie-up are expected to make up only a small fraction of the company’s total.

Paxlovid, a Pfizer-developed novel coronavirus drug for the treatment of adults with mild to moderate Covid-19 and with high-risk factors that progress to severe illness, has been granted formal or emergency-use authorization in about 70 countries worldwide, including China.

In March, Huahai Pharma and four other Chinese pharmaceutical firms won Medicines Patent Pool’s authorizations for the rights and interests of localized generic production of Nirmatrelvir.

Despite authorization for generic production of Nirmatrelvir, the pharmaceutical firms still face major obstacles to becoming suppliers of Paxlovid’s generic drug. One reason being the difficulty in the generic production of the other agent Ritonavir.

Editor: Peter Thomas