GSK Signs Vaccine Deal with Zhifei for $3 Billion

China's largest vaccines company Zhifei will pay British drugmaker GSK 2.5 billion pounds ($3.05 billion) for the exclusive rights to distribute GSK's shingles vaccine in the world's No.2 pharmaceuticals market.

The vaccine, named Shingrix, is GSK's top-selling medicine. The company said the deal with Zhifei is part of its efforts to more than double sales of Shingrix, to more than 4 billion pounds ($4.88 billion), by 2026.

After the deal, the vaccine will be available in more than 30,000 locations across China, up from 9,500 currently. This is important, said a GSK spokesperson, because unlike in most countries, people can only access vaccines at these locations, and not at hospitals, doctors' offices or health centres.

Zhifei will purchase volumes of Shingrix with a value to GSK worth 2.5 billion pounds over an initial three-year period, GSK said. GSK expects to extend beyond that three years, the spokesperson said. The market for Shingrix in China, and also in Brazil and Mexico is "largely out-of-pocket," and the vaccine's launch in those markets is still in its early stages.

The deal is one of a series of moves by western pharmaceutical firms to seize a bigger share of China's market, including announcements from companies such as AstraZeneca.

AstraZeneca plans to spend about $450 million building a factory in China making inhalers to treat "smoker's lung", doubling down on the world's No.2 pharmaceuticals market as the drugmaker predicts only "minimal" sales of its COVID vaccine this year.

China is home to about 100 million patients with chronic obstructive pulmonary disease (COPD), the third leading cause of deaths in the country, according to AstraZeneca.