By Yadarisa Shabong
(Reuters) -China’s Zhifei will pay GSK about 2.3 billion pounds ($2.9 billion) for the exclusive rights to distribute GSK’s shingles vaccine in China, the UK drugmaker said on Thursday, lower than previously agreed though the deal has been extended.
The deal also now includes exclusive rights for China’s largest vaccine company to explore a collaboration on GSK’s respiratory syncytial virus (RSV) vaccine, Arexvy, in China, the world’s No.2 pharmaceuticals market, for an initial term of 10 years.
GSK’s vaccines business has been held back by declining sales of shingles vaccine Shingrix in the United States and China, and a weaker than expected third quarter for RSV sales in the United States.
“This revised agreement with Zhifei puts our collaboration on a sustainable footing, managing challenges in the macro environment in the near-term,” GSK’s Chief Commercial Officer Luke Miels said in a statement.
GSK CEO Emma Walmsley’s bet on Arexvy has hit a snag in recent months after the U.S. public health agency narrowed the age recommendation for use of RSV vaccines and delayed the recommendation for adults under 60.
Sales of Arexvy and Shingrix both fell and missed market expectations in the third quarter.
GSK shares, which have been pressured by the weakness in vaccines, were down 0.3% at 0819 GMT.
GSK last year signed a 2.5 billion pound exclusive rights deal for Zhifei to import and distribute Shingrix for three years to 2026.
Thursday’s revised agreement includes an extension of that deal to 2034, but with a potential total value to GSK of 2.3 billion pounds over 2024-2029.
The previously contracted minimum purchase levels no longer apply, GSK said.
The potential collaboration on the commercialisation of Arexvy in China is subject to regulatory approval of the shot in the Asian country.
($1 = 0.7852 pounds)
(Reporting by Yadarisa Shabong in Bengaluru. Editing by Rashmi Aich and Mark Potter)
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