Zhifei to Pay GSK $3.05 Billion for Exclusive Distribution Rights of Shingles Vaccine in China
China’s leading vaccines company, Zhifei, has entered into a landmark agreement with British drugmaker GSK to secure the exclusive rights for distributing GSK’s shingles vaccine in China. The deal, worth a staggering £2.5 billion ($3.05 billion), marks a significant move by western pharmaceutical firms to tap into China’s thriving pharmaceutical market. This announcement follows similar strategic moves made by companies like AstraZeneca to expand their presence in the country.
GSK’s shingles vaccine, known as Shingrix, is currently the company’s top-selling medicine. The partnership with Zhifei is part of GSK’s ambitious plan to achieve sales exceeding £4 billion ($4.88 billion) by 2026. Recognizing Zhifei’s proven track record in driving access to innovative vaccines in China, GSK believes the collaboration will significantly enhance the availability of Shingrix across the nation. The vaccine will now be accessible in over 30,000 locations, a substantial increase from the current 9,500.
Commencing on January 1, Zhifei will purchase Shingrix volumes valued at £2.5 billion from GSK over an initial three-year period. The news has had a positive impact on both companies’ stocks, with Zhifei shares surging by as much as 20% and GSK shares rising 1.2% by 0812 GMT.
Shingrix has emerged as GSK’s leading product and a key driver of growth, generating £1.71 billion in sales during the first half of this year, representing a 20% increase from the previous year. Analysts from JPMorgan have suggested that this deal will de-risk GSK’s Shingrix sales in China for the next three years and could potentially lead to a 6% upgrade to consensus Core EPS forecasts for 2026.
In addition to the distribution rights, GSK has been granted the “right of first refusal” by Zhifei for any co-development of a respiratory syncytial virus (RSV) vaccine for older adults in China. GSK recently launched its RSV vaccine, Arexvy, in the United States, where it has shown promising early prescription data. Barclays analysts have noted that GSK appears to have an advantage over Pfizer’s competing RSV vaccine.
GSK is banking on Arexvy becoming its next blockbuster medicine, as the company seeks to ensure future growth amid patent expiries and declining revenue from its current bestsellers. With this strategic partnership, GSK aims to solidify its position in the Chinese market and continue its commitment to delivering innovative healthcare solutions.