GlaxoSmithKline Plc (GSK) continues to expand its presence in China and other emerging markets. Earlier this week, the company formed a joint venture (JV) with Chinese company, Jiangsu Walvax Biotech Company, for the development and production of pediatric vaccines for measles, mumps and rubella (MMR) for the Chinese market. 

The joint venture will initially produce Priorix, Glaxo’s vaccine for MMR. Glaxo will also transfer the technology so that the JV will be able to manufacture the vaccines locally over time. The JV will also build a new manufacturing facility for Priorix, which will be supplied to China’s public vaccine market once the facility is operational. 

Glaxo will be investing a total of £27.4 million in the JV. The company will initially invest £20.1 million and the balance amount of £7.3 million will be invested in 2015. Meanwhile, Walvax will invest a total of £13.8 million. Glaxo will hold a 65% interest in the JV. 

Walvax is an affiliate of Yunnan Walvax Biotech Co. Ltd., China’s second largest manufacturer of Haemophilus influenzae type b (Hib) conjugate vaccine. The company has significant expertise in freeze-drying technologies, which make vaccine preservation and transportation easier. In order to eradicate measles by 2012, the Chinese Ministry of Health incorporated MMR vaccine into its Expanded Program on Immunization (EPI) in 2008. With China upgrading its public health initiatives, the setting up of the JV will allow Glaxo to establish local production capacity ahead of the significant expansion in the Chinese public vaccine market. 

This agreement is the latest in a series of deals signed by the company to expand its presence in China and other markets. Earlier, in June, Glaxo had entered into an agreement with Chinese biotech company Shenzhen Neptunus Interlong Bio-Technique Co. Ltd. for the development and manufacture of flu vaccines. Both these collaborations should help Glaxo establish a strong position in the Chinese vaccine market. 

Glaxo also entered into an agreement with Dr. Reddy’s Laboratories (RDY) for the development and marketing of select products across several emerging markets, excluding India. In another deal, the company acquired the branded generics business of Bristol-Myers Squibb (BMY) in Lebanon, Jordan, Syria, Libya and Yemen. All these deals should help accelerate growth in emerging markets.
Read the full analyst report on “GSK”
Read the full analyst report on “RDY”
Read the full analyst report on “BMY”
Zacks Investment Research