Will the Modern American seeking her fortune in China irritate Washington?
While relations between China and the United States are far from florid, the pharmaceutical company Moderna has signed an agreement with Beijing for the research, development and production of mRNA-based drugs intended exclusively for the Chinese people. All the details
Despite the climate of tension between the United States and China, the pharmaceutical company Moderna has signed an agreement with Beijing for the research, development and production of mRNA-based drugs that will not be exported but will be used exclusively in China.
THE AGREEMENT
Moderna reported that a memorandum of understanding and territorial collaboration agreement to work on mRNA-based drug research, development and manufacturing opportunities in China were signed on Wednesday.
"The medicines produced under this deal will be for Chinese people only … and will not be exported," a spokesman told Reuters , but declined to comment on the extent of the deal or provide further details.
"These agreements –he explained – are focused on strengthening health security, targeting unmet needs and contributing to the ecosystem of medical solutions available to patients in China".
THE MEETING BETWEEN BANCEL AND THE CHINESE AUTHORITIES
Confirmation of the strategic cooperation agreement with Moderna also came from Shanghai, China's financial hub, after authorities, including Shanghai Communist Party secretary Chen Jining, met with the company's CEO on Wednesday. Stephane Bancel.
“We hope to accelerate the realization of Moderna's projects… and to promote the landing of more advanced technologies and innovative products in Shanghai,” said Chen.
The move, Quartz notes, marks a major investment in the country, "even as relations between Washington and Beijing continue to sour" over issues ranging from national security to heavy reliance on Chinese supply chains. Indeed, the Biden administration has taken severe measures to diversify investment and trade from China.
HOW MUCH MODERN BETS ON CHINA
Chinese news agency Yicai says the Massachusetts-based pharmaceutical company is ready to make its first investment in China, which could be worth around $1 billion. The company has not confirmed this figure.
Moderna, which registered a legal entity in the country last year, had no presence in mainland China before. In 2022 it opened an office in Hong Kong as part of an expansion in Asia and already in May it had declared that it was "looking for opportunities in China".
WHAT TO DO AFTER THE ANTI-COVID VACCINE?
The expansion into mainland China comes as the company's revenue growth is slowing sharply due to declining global demand for the COVID-19 vaccine, Moderna's only approved product to date.
In fact, the pharmaceutical company, writes Reuters , "in February it forecast a possible net loss for 2023, calling it a transition year before it begins to record sales of experimental vaccines for respiratory syncytial virus (RSV) and influenza".
These vaccines, based on the same mRNA platform as the anti-Covid vaccine, have not yet received approval.
STRENGTHS (AND WEAKNESSES) IN INVESTING IN CHINA
But Moderna is not the only one looking to the East. Indeed, China is a market that attracts several Big Pharmas due to its large and aging population, as well as with a growing prevalence of chronic diseases, which are making it resemble many Western countries.
China's Commerce Ministry said on Wednesday that it held a meeting with some of the world's leading drugmakers to discuss their business operations in the country, according toCNBC . These include Pfizer, AstraZeneca, Novo Nordisk, Merck, Sanofi and GE HealthCare Technologies. However, it is not known whether Moderna also participated.
However, there is a but. The Chinese market, highlights Quartz , "also presents risks and uncertainties". AstraZeneca, listed on the UK stock exchange, for example, wrote the Financial Times a few days ago, is reportedly considering the possibility of spinning off its activities in China to isolate the multinational from geopolitical tensions. The company, however, has denied the report.
Not only. Another challenge is the protection of intellectual property. Last year, in fact, Moderna had to refuse Beijing's requests to hand over the intellectual property that underpins its anti-Covid vaccines. This derailed discussions for the sale of Moderna's mRNA vaccines in the country.
BEIJING'S PLANS FOR THE BIOTECHNOLOGY INDUSTRY
Finally, for China, biotechnology is a strategic industry with profound implications for national security, and Beijing has disclosed its intentions to build an advanced domestic biotechnology supply chain, from raw materials to drugs to the most innovative medical equipment. , with the aim of overcoming Western competitors.
For Quartz , China will open its doors to foreign companies "only if this is to the advantage of local operators", as happened for the automotive industry, where "new foreign operators find themselves having to deal with domestic competitors capturing market share at home and expanding into new markets abroad”.
And it is not excluded that a similar scenario also occurs in the biotechnology sector.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/sanita/lamericana-moderna-che-cerca-fortuna-in-cina-irritera-washington/ on Fri, 07 Jul 2023 11:49:45 +0000.