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Kangtai Biological Products announced it has canceled its plan to establish a joint venture with a UK-Swedish pharmaceutical company in Beijing, which was slated to involve an investment of approximately USD 400 million. The decision was made due to significant market shifts and industry downturn risks.
The company stated that halting this project would not have a substantial impact on its current operations, financial health, or future strategic plans. It emphasized that no actual investments had been made into the joint venture at this point.
Moving forward, Kangtai will focus on optimizing its internal and external resources, strengthening its global presence, and pursuing sustainable and steady growth.
Earlier last year, the company revealed plans to form a 50:50 joint venture with the international firm in the Beijing Economic-Technological Development Area. This collaboration aimed to develop innovative vaccines, including the investigational combination shot IVX-A12 for respiratory syncytial virus and human metapneumovirus, targeting the Chinese market. The facility would have marked the first vaccine manufacturing base in China for the international partner.
Despite the absence of approved vaccines for RSV or hMPV in China, and a lack of effective antiviral drugs, demand for certain pediatric vaccines has slowed amid declining birth rates. Additionally, the adult vaccination sector remains in its nascent stages, requiring ongoing development and adaptation, industry experts noted.
Data from the China Chamber of Commerce for Import and Export of Medicines and Health Products showed a decline in vaccine batches issued and imports last year. Many multinational pharmaceutical companies operating in China scaled back or temporarily suspended vaccine imports to manage existing inventories.
Kangtai projected a sharp decrease in net profit for last year, estimating a drop of 64 to 76 percent, to between CNY 49 million and CNY 73 million (USD 7.1 million to USD 10.5 million).
Meanwhile, the international pharmaceutical giant continues to bolster its investments in China, announcing on Jan. 29 a plan to invest over USD 15 billion over the next five years to expand production facilities and research capabilities across the country.
As of 1:45 p.m. today, Kangtai’s stock traded at CNY 15.53 (USD 2.24), a slight decline of 0.3 percent in Shenzhen.
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