Novartis to buy 85% stake in Chinese flu-vaccine producer

Nov. 4, 2009 (China Knowledge) - Novartis AG, the world's third-largest pharmaceutical company, said yesterday that it has reached an agreement with Zhejiang Tianyuan Bio-Pharmaceutical, one of the largest private makers of influenza vaccines in China, to buy an 85% stake in the Chinese firm.

The Swiss company did not disclose any financial details of the deal, which is still subject to Chinese regulatory approval.

The acquisition is expected to help Novartis expand in China, which is the world's third-largest vaccine market and has an annual sales volume of US$1 billion. The company, which currently has influenza and rabies vaccine operations in China, said it would invest an additional US$1 billion in its research and development center in Shanghai over the next five years.

In 2008, Novartis's Chinese business grew 30% year on year, generating sales revenue of RMB 4 billion. The company aims to make China one of its three largest markets within five years.

Zhejiang Tianyuan is mainly engaged in the production and sales of vaccines in China and is one of the eight Chinese firms that have obtained permission to manufacture the A influenza vaccine in the country. The company's sales revenue was US$25 million last year.