UK-based pharmaceutical company, GlaxoSmithKline (NYSE:GSK), has entered into a three-year, £2.5 billion (GBP1 = USD1.2291) agreement with Chongqing Zhifei Biological Products Co. The partnership, announced on Wednesday, aims to bolster sales of GSK (LON:GSK)'s shingles vaccine, Shingrix, in China.
Zhifei, which also distributes Merck & Co’s Gardasil, will promote Shingrix at 30,000 vaccination points across China, significantly expanding access from the current 9,000 sites. This strategic move is designed to cater to the country's growing elderly population and is supported by the Chinese government's endorsement of new pharma products.
As part of the agreement, Zhifei gains exclusive distribution rights for Shingrix over an initial three-year term. The collaboration is set to double global Shingrix sales to over £4 billion by 2026.
The deal also provides Zhifei with the option to distribute GSK’s upcoming respiratory syncytial virus (RSV) vaccine, Arexvy, pending regulatory approvals in China. This marks GSK's entry into competition with Pfizer Inc (NYSE:PFE) in this new market sector.
Following the announcement of the partnership on Wednesday, Zhifei's shares surged by 20%, while GSK's shares rose less than 1%.
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