Moderna Inc. will push toward producing messenger RNA vaccines for China, seeking a foothold in the world’s second-largest pharmaceutical market even as geopolitical tensions rise.
The Cambridge, Massachusetts-based company signed a memorandum of understanding and land collaboration agreement Wednesday to work toward researching, developing and producing mRNA vaccines in China, according to a statement. The U.S.-based developer of an mRNA vaccine for COVID-19 may invest around $1 billion, local media outlet Yicai reported Tuesday, citing sources it didn’t identify.
Moderna declined to comment on the size of its investment.
Moderna will open its Chinese headquarters in Shanghai’s Minhang District, according to a company spokesperson. The Chinese financial hub is home to the mainland headquarters of several global pharmaceutical companies along with local biotech firms. Moderna will work with the local government to conduct clinical trials and apply to bring products to the market as well as to produce and sell them in China.
A statement Thursday from the Shanghai municipal government said Moderna CEO Stéphane Bancel had signed the agreement with the city the previous day. Bancel traveled to Shanghai in April to oversea implementation of Moderna’s project in China, it said. The government stopped short of mentioning the size of Moderna’s investment.
Any medicines produced under the deal will be only for the Chinese market, targeting unmet needs for patients in the country, and won’t be exported, Moderna said.
The company is under pressure to elevate sales of COVID vaccines after dismal uptake of boosters last year. While Moderna and rival Pfizer Inc. are expecting more people to receive an additional shot this fall, the clamor is unlikely to return to its initial levels. While sales of Moderna’s COVID shot Spikevax are expected to shrink in the rest of the world, China offers a potential new source of growth.
China, meanwhile, hasn’t approved any Western COVID-19 vaccines, inoculating its 1.4 billion population largely with less potent inactivated shots developed by local companies. It only granted emergency use to a homegrown mRNA Covid shot earlier this year, despite domestic drugmakers’ yearslong efforts to develop such shots.
Moderna shares have lost about a third of their value this year.
The investment comes days ahead of a high-profile visit to China by Treasury Secretary Janet Yellen as the U.S. seeks to mend ties and reinstate lines of communication with officials in Beijing. Tensions between the world’s two biggest economies have escalated over a range of issues from national security to a heavy reliance on Chinese supply chains.
Chinese Commerce Minister Wang Wentao also held a Wednesday roundtable with leading global drugmakers including Pfizer Inc. and Merck & Co. to listen to them discuss challenges they face doing business in China, as Beijing ramps up efforts to entice foreign investors to revive a cooling economy.
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(John Liu and John Lauerman contributed to this story.)
