Despite political tensions between Washington and Beijing, foreign pharmaceutical investments are progressing in China. Now, as the commerce minister of the world’s second largest economy signals the potential for new development opportunities for Western firms in the country, mRNA wunderkind Moderna is getting in on the action.
In a deal that could be worth up to $1 billion, Massachusetts-based Moderna inked a memorandum of understanding, plus a land collaboration agreement, to identify opportunities to research, develop and manufacture mRNA medicines in China, Yicai Global, Reuters and others have reported.
“Any medicines produced under this agreement will be exclusively for the Chinese people,” a Moderna spokesperson explained in an emailed statement. Drugs that emerge from the deal will “not be exported," according to the company.
“With this announcement, we are taking further steps to deliver on our mission of creating the greatest possible impact to people through mRNA medicines,” the company pointed out.
Word of the cash outlay came as Moderna’s chief executive Stéphane Bancel touched down in Shanghai on Tuesday to attend a signing ceremony for the investment, according to Chinese news outlet Yicai.
Back in May, Moderna set up a biotechnology unit in Shanghai’s Minhang district. That business—Moderna Biotech China—is controlled by the mRNA specialist’s U.K. biotech arm.
A month before that, Bancel telegraphed plans to ramp up investments in Shanghai and team up with Chinese partners on research, development and production.
Even as China and the U.S. butt heads over issues such as intellectual property theft, advanced technology and Taiwan, pharmaceutical collaborations have formed something of a diplomatic bridge between the two countries.
This week, China’s Commerce Minister told foreign drugmakers at a roundtable Wednesday that they can expect “more development opportunities” within the country.
The meeting with Wang Wentao was attended by pharma juggernauts such as AstraZeneca, Bayer, Merck KGaA, Novo Nordisk, Pfizer, Roche, Sanofi, and Takeda, according to Channel NewsAsia.
Still, China’s health system won’t make the same concessions on price that many Western drugmakers are used to.
Responding to a question from Merck, Chinese Premier Li Qiang said: “You should also understand that our medical and social security systems and patients cannot cope with excessively high prices for new medications.”
Li noted he was unsure of the solution on a personal level, though he said he hoped one could be found via “collective efforts” with foreign pharmaceutical firms.
Under China’s competitive drug procurement program—where global pharmas compete with Chinese generics outfits to sell their products in bulk—drugmakers have had to slash their prices by as much as 95% to win contracts, Channel NewsAsia added.
Earlier this summer, meanwhile, reports emerged that AstraZeneca—the biggest multinational pharma company in China—had made plans to sever its local business there in case geopolitical tensions worsened. At the time, The Financial Times suggested AstraZeneca had worked out a plan to potentially spin its China business into a separate entity listed in Hong Kong while retaining control.
But AZ’s international and China president Leon Wang labeled FT’s report “misinformation” in response to local media outlet Yicai (Chinese). In response to Fierce Pharma, AZ said it doesn’t comment on market rumors.
As for Moderna, the Massachusetts-based company is looking to revitalize its fortunes after a precipitous decline in COVID-19 vaccine revenues in recent months. In the first quarter of 2023, Moderna logged a staggering 69% revenue drop. And it’s not alone. Over that same stretch, Moderna’s pandemic peers BioNTech and Pfizer recorded their own respective revenue plunges of 80% and 29%.