CSPC, which earlier this year won approval from Chinese regulators for the country’s first locally developed mRNA Covid vaccine, will manufacture and sell the medication in mainland China, according to a Pfizer spokesperson.

The antiviral is used to treat Covid-positive people who are at higher risk of severe illness, hospitalisation and death.

CSPC shares rose as much as 1.9% in Hong Kong on Friday morning.

The deal comes three months after China’s state medical insurance, which covers more than 95% of the nation’s 1.4 billion people, stopped reimbursing Paxlovid after price negotiations between Pfizer and the government broke down.

That coincided with a surge in demand for antivirals after Beijing’s abrupt dismantling of most Covid restrictions in late 2022 unleashed a virus wave that infected 80% of the population in less than two months.

At the same time, China has been bolstering its arsenal of homegrown Covid antivirals, including some developed based on similar mechanisms as Paxlovid and that are typically cheaper.

Pfizer has previously entered an agreement to let state-owned China Meheco Co sell the drug in China. It has also asked generic drugmaker Zhejiang Huahai Pharmaceutical Co to produce and sell it, while Hong Kong-listed drug developer Ascletis Pharma Inc supplies one of its ingredients.