The Burrill Report

GlaxoSmithKline took full control of its Chinese joint venture by purchasing the remaining 51 percent equity interest of its partner Neptunus Interlong Bio-Technique for $39 million in cash. Once it receives Chinese government approval, GSK will become the sole owner of the company.

The joint venture, Shenzhen GSK-Neptunus Interlong Biologicals, was established in June 2009 to develop and manufacture seasonal and pandemic influenza vaccines in China. Under the original agreement, GSK took a 40 percent stake in the joint venture for $34 million, with Neptunus Interlong contributing $47 million. Their understanding was that GSK would increase its stake to become majority owner within the next two years. In 2010, it acquired another 9 percent of the company for $10.6 million.

With 1.3 billion people and a government committed to near universal healthcare, the Chinese vaccine market, currently the world’s third largest, is still underdeveloped and is estimated to experience double-digit annual growth for the foreseeable future.

The acquisition further expands GSK’s presence in China’s vaccine market because it will now have local manufacturing capability. GSK already licenses more vaccines in China than any other global manufacturer, says Jean Stephenne, chairman and president GSK Biologicals.

“The decision to acquire the remaining equity interest in GSKNB reflects the importance GSK places in expanding our product offering in China and making new vaccines available to improve public health in this fast growing emerging market,” he says.

GSK-Neptunus Interlong Biologicals is not the pharmaceutical company’s only Chinese vaccine joint venture. In 2010, it teamed up with the Yunnan affiliate of Jiangsu Walvax Biotech to form a joint venture to develop pediatric vaccines in China. GSK invested $35 million upfront and promised another $11.6 million in 2015 for a 65 percent ownership in the venture.



June 17, 2011
http://www.burrillreport.com/article-glaxo_expands_presence_in_china.html