GSK gets less from Zhifei shingles vaccine deal; to work on RSV

By Yadarisa Shabong

(Reuters) – China’s Zhifei will pay GSK about 2.3 billion pounds ($2.9 billion) for the exclusive rights to distribute GSK’s shingles vaccine in China, the British drugmaker said on Thursday, less than previously agreed, although the deal was extended.

The deal now also includes exclusive rights for China’s largest vaccine maker to explore a collaboration for GSK’s respiratory syncytial virus (RSV) vaccine, Arexvy, in China, the world’s second-largest pharmaceutical market, for an initial period of 10 years.

GSK’s vaccine business was hit by declining sales of shingles vaccine Shingrix in the United States and China, as well as weaker-than-expected third quarter RSV sales in the United States.

“This revised agreement with Zhifei puts our collaboration on a sustainable footing and addresses challenges in the macro environment in the near term,” GSK Chief Commercial Officer Luke Miels said in a statement.

GSK CEO Emma Walmsley’s bet on Arexvy has faltered in recent months after the U.S. health agency narrowed the age recommendation for RSV vaccine use, shifting the recommendation to adults under 60.

Sales of Arexvy and Shingrix fell in the third quarter, missing market expectations.

GSK shares, hit by vaccine weakness, fell 0.3% at 0819 GMT.

GSK last year signed a £2.5 billion exclusive rights deal for Zhifei to import and distribute Shingrix for three years until 2026.

Thursday’s revised agreement includes an extension of that agreement until 2034, but with a total potential value for GSK of £2.3 billion over the period 2024-2029.

According to GSK, the previously agreed minimum purchase quantities no longer apply.

The possible cooperation in the commercialization of Arexvy in China is subject to the regulatory approval of the vaccine in the Asian country.

($1 = 0.7852 pounds)

(Reporting by Yadarisa Shabong in Bengaluru. Editing by Rashmi Aich and Mark Potter)