(Bloomberg) -- Shionogi & Co.’s Covid pill could be approved in China this spring as Beijing races to stock up on therapies developed abroad to fight a growing number of severe infections and deaths in the world’s biggest outbreak.

The Japanese drugmaker has been submitting data to regulators in China and expects Xocova to be authorized for use as early as this quarter, Chief Executive Officer Isao Teshirogi said. 

“We are at the final stage of discussions with the authority,” he said in an interview from Shionogi’s headquarters in Osaka. “I’m hopeful it will ask us to submit the application officially in a month or two, with the approval to follow soon after.” 

The clearance would give China a third foreign antiviral medicine to treat surging infections as the country pivots from the stringent Covid Zero approach that kept the pathogen in check for most of the pandemic. While Covid pills have become a crucial disease-fighting tool as the world transitions to living with the virus, repeated bouts of infection have inured many people to the disease - leaving China as a key market for the medicine.  

The country’s fearsome omicron wave has caused domestic shortages of many drugs, with antivirals that treat Covid in high demand. The pressure on China’s government to help its population through the surge of sickness is reflected in the speed at which it’s approving foreign-made therapies, after years of spurning vaccines developed outside the country.

Treatment Shortages

While Pfizer Inc.’s Paxlovid was the first foreign antiviral approved, it’s been in short supply - prompting people to turn to the black market. Merck & Co.’s Lagevrio was granted emergency authorization last month to expand access to treatment for patients at risk of severe disease. 

China also approved a home-grown antiviral called azvudine, originally developed to treat HIV infection, though little is known about its efficacy. Several other Chinese companies are working on Covid-specific antivirals, with the most advanced having completed the final stage of human testing. The less virulent nature of omicron has made it difficult for them to prove their benefits in clinical trials, and none are yet approved.

Shionogi’s Xocova was first approved in Japan in November to treat Covid-19 patients 12 years and older. It’s easier to take than Paxlovid and Lagevrio, requiring just 7 pills over five days, compared with 30 pills to 40 pills over the same time frame. 

Overseas demand for Xocova is possible, as China might grant approval sooner than it typically takes given the recent surge in Covid cases, Stephen Barker, an analyst at Jefferies, wrote in a note to clients on Jan. 4. On the other hand, regulators may not treat it as a priority because Xocova hasn’t been shown to prevent hospitalization or death, he said. Studies show the treatment helps patients recover faster. 

Made in Japan

If approved, Shionogi plans to initially export the drug from Japan, Teshirogi said. It will make the medication at a factory in Nanjing, subjected to manufacturing approval by Chinese authorities, that has the capacity to produce 700 million pills a year, he said. 

The factory is owned by Ping An-Shionogi Co., its joint venture with Ping An Life Insurance Company of China Ltd. Shionogi also partnered with Chia Tai Tianqing Pharmceutical Group Co., a unit of Sino Biopharmaceutical Ltd., in December to promote the medicine, and Shanghai Pharmaceutical Co. to import and distribute it. 

Teshirogi reiterated Xocova has the potential to generate $2 billion in peak annual sales.

“With the emergence of the omicron strain, Covid has become extremely difficult to avoid,” Teshirogi said. “We can’t fight against it with vaccines alone. So that probably means Xocova will still have a role to play.”

--With assistance from Dong Lyu.

©2023 Bloomberg L.P.