Pharmaceutical giant GSK (GSK) has announced an exclusive strategic partnership with China’s largest vaccine company Chongqing Zhifei Biological Products to co-promote its shingles vaccine Shingrix.

Shares in the UK drug maker traded 1.5% higher to £15.18 in early trading, closing-in on new 12-month highs as they continue to recover lost ground following litigation worries over its heartburn treatment Zantac.

Implementation of the partnership is expected to start on 1 January 2024 and will result in a ‘significant’ extension of the availability of Shingrix through over 30,000 points of vaccination.

POSITIVE TRIAL DATA

The agreement follows positive trial data in August 2023 which showed Shingrix was 100% effective in preventing shingles in Chinese adults aged 50 and over.

GSK expects the partnership to support future co-development and commercialisation of its RSV (respiratory syncytial virus) vaccine for adults of 60 years and older.

Chief commercial officer Luke Miels commented: ‘This partnership is consistent with our focus on products with a high and durable level of differentiation.’

‘It materially expands the number of Chinese adults who can benefit from Shingrix and includes the option to extend the collaboration to include our novel RSV vaccine Arexvy.’

WHAT ARE THE FINANCIAL IMPLICATIONS?

Chongqing Zhifei has agreed to purchase volumes of Shingrix worth £2.5 billion over an initial three-year period with potential to extend its take-up further subject to agreement by both parties.

GSK aims to double global sales of Shingrix to over £4 billion by 2026. In the first half of 2023 the drug generated £1.7 billion of sales, up 20% from the prior year.

The Chinese firm also has granted GSK first right of refusal to be their exclusive partner for any co-development and commercialisation of an RSV vaccine for older adults in China.

RSV is a common contagious virus affecting the lungs and breathing passages with older adults at high risk of severe disease due to age-related immunity decline.

While Arexvy is not yet approved in China, it has already gained the regulatory go-ahead in the US, the European Union and Japan.

Underlining the importance of the approvals, chief executive Emma Walmsley commented at the half year results (26 July): ‘The approval of Arexvy, the world's first RSV vaccine, was an important milestone for us and is at the forefront of a next wave in vaccine innovation for GSK.’

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