SHANGHAI – Moderna will push towards producing messenger RNA (mRNA) vaccines for China, seeking a foothold in the world’s second-largest pharmaceutical market even as geopolitical tensions rise.
The Cambridge, Massachusetts-based company signed a memorandum of understanding and land collaboration agreement on Wednesday to work towards researching, developing and producing mRNA vaccines in China, according to a statement.
Moderna, the developer of an mRNA vaccine for Covid-19, may invest around US$1 billion (S$1.35 billion), local media outlet Yicai reported on Tuesday, citing sources it did not identify.
The company declined to comment on the size of its investment.
Moderna will open its Chinese headquarters in Shanghai’s Minhang district, according to a company spokesman.
The Chinese financial hub is home to the mainland headquarters of several global pharmaceutical companies, along with local biotech firms. Moderna will work with the local government to conduct clinical trials and apply to bring products to the market as well as to produce and sell them in China.
A statement on Thursday from the Shanghai municipal government said Moderna chief executive Stephane Bancel had signed the agreement with the city the previous day.
Mr Bancel travelled to Shanghai in April to oversee implementation of Moderna’s project in China, it said. The government stopped short of mentioning the size of Moderna’s investment.
Any medicines produced under the deal will be only for the Chinese market, targeting unmet needs for patients in the country and will not be exported, Moderna said.
The company is under pressure to elevate sales of Covid-19 vaccines after dismal uptake of boosters last year.
While Moderna and rival Pfizer are expecting more people to receive an additional shot this fall, the clamour is unlikely to return to its initial levels. While sales of Moderna’s Covid-19 shot, Spikevax, are expected to shrink in the rest of the world, China offers a potential new source of growth.
China has not approved any western Covid-19 vaccines, inoculating its 1.4 billion population largely with less potent inactivated shots developed by local companies.
It granted emergency use to a home-grown mRNA Covid-19 shot only earlier this year, despite domestic drugmakers’ years-long efforts to develop such shots.
Moderna shares rose 2.9 per cent at 11.28am in New York. They have lost about a third of their value in 2023.
The investment comes days ahead of a high-profile visit to China by Treasury Secretary Janet Yellen as the United States seeks to mend ties and reinstate lines of communication with officials in Beijing.
Tensions between the world’s two biggest economies have escalated over a range of issues, from national security to a heavy reliance on Chinese supply chains.
Chinese Commerce Minister Wang Wentao held a round-table discussion on Wednesday with leading global drugmakers, including Pfizer and Merck, to listen to them discuss challenges they face doing business in China as Beijing ramps up efforts to entice foreign investors to revive a cooling economy. BLOOMBERG
