By Roxanne Liu and Ludwig Burger
BEIJING/FRANKFURT (Reuters) - Shenzhen Kangtai Biological Products (SZ:300601) will produce AstraZeneca Plc's (L:AZN) potential COVID-19 vaccine in mainland China, the British drugmaker said on Thursday, its first deal to supply one of the world's most populous countries.
The deal underscores Astra's frontrunner position in a global race to deliver an effective vaccine, given that Chinese ventures are leading at least eight of the 26 global vaccine development projects currently testing on humans.
Under the agreement Shenzhen Kangtai, one of China's top vaccine makers, will ensure it has annual production capacity of at least 100 million doses of the experimental shot AZD1222, which AstraZeneca co-developed with researchers at Oxford University, by the end of this year, AstraZeneca said.
The Shenzhen-based company must have capacity to produce at least 200 million doses by the end of next year as part of the exclusive framework agreement, its statement on the Chinese social media site WeChat said.
The two companies will also explore the possibility of cooperation on the vaccine candidate in other markets, AstraZeneca said.
They did not respond to requests for further comment.
There are no approved vaccines for COVID-19, the highly contagious respiratory illness caused by the coronavirus.
AstraZeneca has signed manufacturing deals globally including the United States, Britain, South Korea and Brazil, resulting in a target to make more than 2 billion doses of the vaccine.
For China, this marks another major deal to secure access to a COVID-19 vaccine developed by a foreign company as the country's other potential shots under development enter late stage of human trials.
Other collaborations between Chinese and Western players include a tie-up between Germany's BioNTech (O:BNTX) and Fosun (SS:600196) (HK:2196), as well as one between Inovio Pharma (O:INO) and Beijing Advaccine Biotechnology.
The scramble for treatments and vaccines to curb the pandemic has boosted global pharmaceutical companies' shares, particularly those in China.
Shenzhen Kangtai's market value has surged almost 90% to about $20 billion over the past month, with shares hitting all-time highs on Tuesday. The Shenzhen-listed stock was down 10% on Thursday.
In 2019, the company, whose main products are vaccines for Hepatitis B, flu and measles and rubella, reported net profits of 574.5 million yuan ($82.68 million) on revenue of 1.94 billion.
(This story corrects profit figure in final paragraph)