GSK forms JV to expand in Chinese vaccine market
The joint venture strengthens GlaxoSmithKline’s (GSK) position in two growth areas, China and vaccines, and is in keeping with the pharma’s recent strategy. GSK has signed a similar deal with China-based Shenzhen Neptunus Interlong Bio-Technique to develop and manufacture flu vaccines.
By making these deals Jean Stephenne, president of GSK Biologicals, believes the company can establish a presence in China “in advance of the significant expansion in the Chinese public vaccine market”.
In 2008 the Chinese Ministry of Health’s incorporated the measles, mumps and rubella (MMR) vaccine into its immunisation programme following its pledge to eradicate measles by 2012. GSK is anticipating that this will drive growth in the Chinese vaccine market.
Under the terms of the deal with Walvax the partners will invest £41.2m ($65.5m) in the joint venture upon fulfilment of certain conditions. This investment includes an initial £20.1m from GSK, and further £7.3m by 2015, and a total of £13.8m from Walvax.
Some of this investment will be used to build a manufacturing facility for GSK’s paediatric MMR vaccine Priorix. Once the facility is complete it will supply vaccines to the Chinese market.
The partners are also working to develop and manufacture paediatric vaccines for the Chinese market. GSK is transferring technology to allow the joint venture to manufacture vaccines locally.
Collaborating with Walvax gives GSK access to local knowledge and expertise. Walvax has operated in the Chinese vaccine market since 2001 and has experience of freeze-drying technologies, which make preservation and transportation easier.
Based on their respective investments GSK will receive 65 per cent of equity interest. In addition the agreement includes provisions for both companies to revise their equity share in the future.
