The largest vaccine manufacturer in China, Zhifei (300122. SZ), has agreed to pay British pharmaceutical giant GSK (GSK.L) 2.5 billion pounds ($3.05 billion) in exchange for the exclusive right to sell GSK’s shingles vaccine in the second-largest pharmaceutical market in the world.
The Shingrix vaccination is GSK’s best-selling pharmaceutical. According to GSK, the agreement with Zhifei aims to increase revenues to more than 4 billion pounds ($4.88 billion) by 2026.
Zhifei said in a filing to the Shenzen Stock Exchange that it will buy quantities of Shingrix valued at 2.5 billion pounds from GSK over an initial three-year period.
The contract is scheduled to begin on January 1. Following the filing, Zhifei shares rose as much as 20% to 58.40 yuan, their highest level since March 27. Zhifei gave GSK the “right of first refusal to be their exclusive partner for any co-development of an RSV vaccine for older adults in China,” according to GSK’s announcement.
After receiving regulatory approval in May, the business introduced its respiratory syncytial virus (RSV) vaccine, known as Arexvy, in the United States.
The vaccine’s introduction was off to a solid start, according to Barclays analysts, who noted last month that the first five weeks of prescription data revealed that GSK seemed ahead of Pfizer’s rival RSV vaccine.
Then, a GSK shareholder told Reuters that the mainstream predictions for Arexvy sales in 2023, at roughly 215 million pounds, are “way too low” if the robust start is sustained through September.
As part of its attempts to secure growth as it prepares to deal with a mix of patent expirations and falling sales from its existing bestsellers by the end of this decade, GSK is betting on Arexvy as its next blockbuster drug.
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