A unit of Shanghai Fosun Pharmaceutical has agreed to form a US$200 million joint venture with German partner BioNTech to build a plant in China capable of supplying as much as one billion doses of coronavirus vaccine a year.
Shanghai Fosun Pharmaceutical Industry Development will contribute up to US$100 million of assets including cash and a manufacturing facility, while BioNTech will chip in the licence and know-how to produce the vaccine of the same value. Each party will own half of the venture.
“Fosun Pharmaceutical Industry shall provide a manufacturing facility, which has the potential capacity of producing up to one billion doses of coronavirus vaccine product per annum, and shall inject the manufacturing facility into the joint venture,” Fosun Pharmaceutical said in a filing to Hong Kong’s bourse late on Sunday.
Fosun will also provide loans to the planned 15-year joint venture – to be incorporated in Shanghai – of up to €150 million (US$182.4 million), besides arranging other credit facilities.
The announcement of the agreement comes as governments wrangle over whether to waive patents on Covid-19 vaccines, which will affect the value of manufacturing licences.
Germany has opposed the US-backed proposal first initiated by India and South Africa last fall, saying protection of intellectual property is key to encouraging innovation and should not be taken away.
Supporters, including some European Union states like France and Italy, have said it will let more companies manufacture the vaccine that is needed to save lives and bring back the global economy to normal, especially in developing nations.
Mainz, Germany-based BioNTech, a biotechnology start-up, has developed one of the most widely used and effective coronavirus vaccines to date, based on the mRNA platform.
mRNA vaccines work by introducing a molecule coded for a disease-specific protein, which can “coach” the body’s immune system to produce antibodies and generate immune responses against the virus.
Its marketing success was made possible by a partnership with US pharmaceutical giant Pfizer, which has an extensive network for clinical trials, besides strong manufacturing and sales capabilities.
Pfizer expected revenue from the vaccine to account for over a third of its sales this year, based on contracts to deliver 1.6 billion vaccine doses this year.
Fosun is BioNTech’s exclusive partner for the vaccine in mainland China, Hong Kong, Taiwan and Macau.
A Reuters report quoting BioNTech chief executive Ugur Sahin said late last month that he expected its Covid-19 vaccine to win approval from the mainland Chinese health authorities “by July at the latest”.
Some 318 million of Covid-19 vaccines have been administered in China so far, according to Our World in Data, primarily products developed by state-owned Sinopharm and privately controlled Sinovac Biotech.
The proposed joint venture’s board will have six directors, Fosun said. Fosun will nominate candidates for the positions of general manager and vice-president of finance, while BioNTech will nominate the deputy general manager and vice-president of compliance.