Novartis pays $125m in cash for better access to fast-growing Chinese vaccine market
Basel –Novartis AG has begun to fulfill its announced investment of $1.25bn to boost the company’s limited presence in the fast-growing Chinese health market over the next 5 years. The swiss drug makers will acquire a 85% stake in Chinese vaccine specialist Zhejiang Tianyuan Bio-Pharmaceutical Co. for $125m in cash. The privately-held enterprise had net sales of $25m last year with vaccines against seasonal influenza, hemorrhagic fever with renal syndrome, Japanese encephalitis, and meningococcal meningitis. Novartis said the deal will facilitate the introduction of its own vaccines against rabies and influenza in China. The purchase, subject to government and regulatory approval in China, is expected to be finalised at the beginning of next year.
China is the world's third largest vaccines market, with annual industry sales of more than $1bn and expectations of sustained double-digit growth in the future.
The news of the deal came on the heels of Novartis’ announced investment of $1.25bn in China-based R&D activities. The company will also put $250m into the expansion of the Novartis Institute for BioMedical Research, to be relocated to a new campus in Shanghai, as well as $250m in a new global technical center opening in Changshu, to be focused on technical research, development, and API manufacturing.