GlaxoSmithKline (NYSE:GSK) is coughing up $39 million to buy the remaining stake in a joint venture company formed to make flu vaccines in China.
The pharmaceutical giant, which has its U.S. headquarters in Research Triangle Park, North Carolina, announced it has entered into an agreement to acquire the 51 percent stake in Shenzhen Neptunus Interlong Bio-Technique Co. The deal is still subject to approval by China’s government. It comes amid new reports of a mutated form of H1N1 that may be resistant to leading flu treatments, including one made by GSK.
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The China joint venture, established in 2009, focused on developing and manufacturing seasonal and pandemic flu vaccines for China, Hong Kong and Macau. GSK increased its stake in the company from 40 percent to 49 percent last August. GSK said in a statement that its decision to acquire the remaining interest in the joint venture reflects the company’s intention to expand its vaccines presence in China by establishing local vaccine manufacturing capabilities. Jean Stephenne, chairman and president of GSK Biologicals, said in a statement that the acquisition of the joint venture reflects the importance GSK places on expanding its product offering in the fast-growing Chinese market.
The deal comes as researchers have found evidence of an H1N1 mutation that appears to be resistant to the current leading flu treatments Relenza, made by GSK, and Tamiflu, made by Roche (OTC:RHHBY) and Gilead Sciences (NASDAQ:GILD), according to new research published by the World Health Organization Collaborating Centre for Reference and Research on Influenza in Melbourne, Australia. The center is part of the WHO’s Global Influenza Surveillance Network. That news could spur interest in more vaccines in the near future. At present, it’s spurring interest in new flu treatments.
News of the drug-resistant flu strain caused shares of Durham, North Carolina-based BioCryst Pharmaceuticals (NASDAQ:BCRX) to increase 15 percent on Monday. The new strain does not appear to be resistant to BioCryst’s experimental treatment Peramivir. BioCryst is developing Peramivir under a contract with the federal government, which is financing clinical studies of the treatment. Although Peramivir is still in phase 3 clinical trials, the compound does have limited experience in the market. During the H1N1 pandemic in 2009, the U.S. Food and Drug Administration granted emergency authorization for the treatment in hospitalized patients with suspected or confirmed H1N1.
Interest in the flu is piquing. A mutation in the H1N1 strain could spur demand for more flu vaccine. And for those who don’t receive the vaccine, investors are apparently betting on a successful outcome of Peramivir’s trials and a market welcoming of a new flu treatment.
