Moderna announces China investment as country opens doors to foreign pharma
Moderna (MRNA) on Wednesday confirmed plans to develop medicines for the Chinese market, signaling the first major push of foreign mRNA products into the country.
The move comes just after China announced it was opening the door to more foreign pharmaceutical investment.
In a statement to Yahoo Finance, Moderna said, "We signed a memorandum of understanding and a related land collaboration agreement to work toward opportunities for Moderna to research, develop and manufacture mRNA medicines in China."
Chinese media reports tabbed the investment at $1 billion. Moderna stock rose 1.5% following the news.
The agreement also comes on the eve of Treasury Secretary Janet Yellen's visit to Beijing as the US aims to mend ties with China that were frayed during the pandemic as many Western countries adopted nationalist policies related to the pandemic, particularly around vaccines.
China previously approved Pfizer's (PFE) mRNA COVID-19 vaccines, but it still relied largely on homegrown entities for vaccines during the pandemic.
China represents an important market for pharma companies, and has for some time. Pharma giants like Johnson & Johnson (JNJ) and Merck (MRK) see significant revenue from the Asia region annually.
It also means that negative impacts on China can hit the bottom line. For example, the spike in COVID in China at the end of last year impacted J&J's medical device unit business at the start of the year.
Abbott (ABT) named China among four countries "represent(ing) the most attractive long-term growth opportunities for Abbott's branded generics product portfolio" in its full-year 2022 results.
GSK (GSK), meanwhile, credited the strong uptake of its blockbuster vaccine Shingrix in China and Germany for strong international sales in 2022. Similarly, Merck credited a 6% increase in its ex-US Gardisil vaccine sales for the full year in 2022, "particularly in China."
Executives from UK-based AstraZeneca (AZN) recently visited China and upon returning said the country is no longer simply copying Western pharma and is seeing a growth in investment in the biotech sector.
A sentiment Moderna appeared to endorse in its statement on Wednesday.
"These agreements are focused on strengthening health security by targeting unmet needs and contributing to the ecosystem of medical solutions available to patients in China," Moderna added in its statement on Wednesday.
"Any medicines produced under this agreement will be exclusively for the Chinese people — who face many of the same health challenges that affect other communities around the world — and will not be exported."
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