GlaxoSmithKline, the UK-based pharmaceutical group is setting up a joint venture flu vaccine business in China.
The company will combine forces with Shenzhen Neptunus (shown in our second illustration), which is quoted in Hong Kong, taking an initial 40% stake for $34 million with the option to increase to majority control within two years.
The deal allows GSK to enter the potentially large Chinese market for vaccines for the first time, overcoming the local authorities’ preference to purchase vaccines from domestic manufacturers.
It will give the company access to Chinese antigens for flu, and allow them to add in GSK’s proprietary ‘adjuvant’, a patented ingredient that boosts the human immune response, adding to the efficacy and efficiency of the vaccine.
This is the first time GSK has created a joint venture in vaccines, with the company indicating that it would follow a similar model in other emerging markets in the future.
The Financial Times reports that the agreement with Shenzhen allows GSK to substantially strengthen its expanding franchise in flu vaccines, adding to its existing fully controlled factories for flu in Lavalle in Canada and Dresden in Germany, as well as its central plant in Rixensart, Belgium, for the production.