GlaxoSmithKline has entered into a strategic partnership with Chongqing Zhifei Biological Products to distribute its shingles vaccine, Shingrix, in China. Under this agreement, Zhifei will pay £2.5 billion ($3.05 billion) for a specific volume of the vaccine and exclusive distribution rights for Shingrix in China from 2024 through 2026, with the partnership commencing on January 1 of the upcoming year. The deal has the potential for extension if mutually agreed upon by both companies.
This collaboration comes on the heels of GSK’s announcement of phase 4 trial data, revealing that Shingrix demonstrated 100% effectiveness in safeguarding adults aged 50 and older from shingles. The ZOSTER-076 study, conducted in China and involving nearly 6,000 participants, underscores the vaccine’s remarkable efficacy.
Although Shingrix has been available in China since 2020, its sales have been rapidly increasing. Nevertheless, growth has been limited due to GSK’s distribution at approximately 9,000 locations. The partnership with Zhifei is expected to significantly enhance access, as Zhifei, a prominent player in the Chinese vaccine market, can provide access to approximately 30,000 vaccination points.
GSK reported global sales of Shingrix at £1.71 billion ($2.1 billion) in the first half of the current year. The company anticipates that increased sales in China will help offset the anticipated decline in demand for the vaccine in the United States and Europe. A year ago, GSK set the goal of doubling its Shingrix sales in China by 2025.
“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.”
– Luke Miels, Chief Commercial Officer, GSK
Zhifei has a successful track record of driving sales, with $4.75 billion in vaccine revenue in 2021, largely attributed to its partnership with Merck in marketing the HPV vaccine Gardasil for over a decade. GSK aims to replicate this success with Shingrix in China, and similar results could pave the way for Zhifei to market GSK’s RSV vaccine, Arexvy, in the future.
GSK has granted Zhifei the right of first refusal to be its exclusive partner for the co-development and commercialization of Arexvy, provided it receives approval in China. GSK sees potential synergy between the two vaccines, as both target eligible patient groups aged 50 and above. Additionally, Zhifei boasts approximately ten times as many sales representatives as GSK’s current workforce of 500 in China.
GSK faces competition in the RSV market, with Pfizer’s Abrysvo and a potential candidate from Moderna, in a market that analysts project to reach $9 billion by 2029.