GSK acquires equity interest in joint venture company from Shenzhen Neptunus
LONDON, U.K.--GlaxoSmithKline (GSK) has entered into an agreement with Shenzhen Neptunus Interlong Bio-Technique Co. Ltd. (Shenzhen Neptunus) to acquire 51 percent equity interest of Shenzhen Neptunus in the joint venture company Shenzhen GSK-Neptunus Biologicals Co. Ltd. (GSKNB). GSK will acquire the equity interest for a total cash consideration of £24 million (US$39 million), and pending approval from the Peoples Republic of China's authorities for the agreement, GSK will become sole owner of GSKNB.
"The decision to acquire the remaining equity interest in GSKNB reflects the importance GSK places in expanding our product offering in China and making new vaccines available to improve public health in this fast growing emerging market," Jean Stéphenne, Chairman and President of GSK Biologicals, said in a statement. "GSKNB employees have made good progress preparing the site for the production of influenza vaccines and we look forward to continuing this work."
GSK originally increased its equity share in GSKNB from 40 percent to 49 percent in August 2010.
The joint venture was originally formed in June 2009, with its focus on the development and manufacture of seasonal and pandemic influenza vaccines for China, Hong Kong and Macau. The terms of the joint venture stated that GSK would make its proprietary adjuvant system available for use, a system that improves efficiency and optimizes production by increasing the number of vaccine doses that can be developed using smaller amounts of the antigen. For its part, Shenzhen Neptunus was responsible for providing local manufacturing capacity and research and development expertise. Both GSK and Shenzhen Neptunus were responsible to provide investment for manufacturing.
GSK took a 40 percent stake in the joint venture for a contribution of cash and assets equivalent to £21 million (approximately $34.4 million), while Shenzhen Neptunus took at 60 percent stake for a contribution of cash and assets equivalent to £31 million (approximately $50.7 million). The terms stated that GSK was expected to obtain a majority equity interest in the venture within two years.
In an announcement of the original joint venture agreement, Stéphenne called China a "critical emerging market," noting that the combination of respective technology and expertise would allow GSK to "gain access to specific local influenza antigens and make available new vaccines to benefit public health in China and neighboring territories."
"GSK has licensed more vaccines in China than any other global manufacturer and has packaged more than 100 million vaccines at our Shanghai facility," John Lepore, Vice President and General Manager, Biologicals and Corporate, GSK China, said in a statement regarding GSK's acquisition of majority interest. "Today's announcement represents an expansion of GSK's long-term commitment to vaccine supply, manufacturing and development in China."