Chongqing Zhifei Biological Products Co., Ltd.

The deal is expected to close in the fourth quarter and will not weigh on UCB’s 2024 financial guidance, the company explained in a release. Restructuring seems to be the name of the game for many large drugmakers these days, and Belgium-based UCB is no exception.Early Monday, UCB revealed that it’s selling off its mature neurology and allergy business in mainland China to local healthcare asset manager CBC Group and Abu Dhabi-based investment firm Mubadala. UCB is in line to receive $680 million from the transaction, which covers the seizure drugs Keppra and Vimpat, Neupro for Parkinson’s disease and restless leg syndrome, and the allergy meds Zyrtec and Xyzal. UCB is also pawning off a manufacturing site in the city of Zhuhai in China’s Guangdong Province as part of the divestment deal, the company said in a release.  UCB says the deal will help more patients benefit from the company’s past innovations, noting that CBC and Mubadala are partnering to develop and operate a “new leading neurology” company at scale in China leveraging UCB’s drug portfolio and factory. "In the short term, UCB is exploring the launch of novel medicines in immunology, neurology, and rare diseases in China," the company’s CEO, Jean-Christophe Tellier, said in a statement. “Building on our 28-year presence in the country, we are committed to driving patient outcomes through continued collaboration with local partners and fostering innovation.” The deal is expected to close in the fourth quarter and will not weigh on UCB’s 2024 financial guidance, the company added. UCB’s divestment follows a similar trend in which large pharmas have recently opted to enlist local partners to help commercialize their medicines in China. Pfizer in November inked a deal with Keyuan Pharma, granting the Shanghai drugmaker exclusive Chinese rights to distribute and promote its pneumococcal vaccine Prevenar 13, which goes by the name Prevnar 13 in the United States. Prior to that, GSK tapped Chongqing Zhifei Biological Products—the China marketer of Merck’s HPV short Gardasil—to distribute its shingles vaccine Shingrix in the country. Biogen and Sanofi have also reworked parts of their China businesses in recent months. Leveraging local partners in China has been on the upswing lately, partly because “there is increasing pricing and competitive pressure in the market, especially for mature products, leaving reduced [return on investment] for in-house commercial resources,” Justin Wang, head of L.E.K Consulting’s China practice, told Fierce Pharma last year.  Meanwhile, certain drugmakers—especially in the U.S.—are considering shying away from Chinese partners in the wake of the BIOSECURE Act, which aims to block certain Chinese biotech equipment and service providers from the U.S. market over national security concerns. Among U.S.-based life sciences companies, confidence in working with Chinese companies has plunged, according to a L.E.K. survey released earlier this summer. The issue is less pronounced with companies outside the U.S., where L.E.K. reported a milder decrease in confidence levels.

GSK CEO Emma Walmsley said she’s confident that, for its RSV vaccine, 2025 “will be a year of growth, and that peak-year sales is secure.” The whole respiratory syncytial virus (RSV) vaccine field took a beating when the Centers for Disease Control and Prevention’s (CDC's) immunization committee doled out a limited recommendation last month. And it’s showing in GSK’s forecast for 2024.GSK on Wednesday took its 2024 vaccine sales projection down by a notch. Rather than high single- to low double-digit percent growth, the British pharma now expects vaccine sales to increase by low- to mid-single-digit percent this year at constant exchange rates.The company’s flagship shingles vaccine Shingrix disappointed in the second quarter. After driving continued growth, Shingrix posted a surprise 5.5% decline year over year during the three months, with its 832 million pounds sterling ($1.07 billion) haul falling 17.9% behind analysts’ expectations.The U.S. market turned out to be the main drag with sales down by 36%. GSK attributed the poor performance to channel inventory reductions, changes in retail vaccine prioritization thanks to new ways pharmacies process reimbursements from payers, and challenges in reaching additional consumers given Shingrix’s already high 37% penetration within its recommended population in the U.S.Based on the second-quarter dip, GSK doesn’t expect Shingrix to grow in 2024. But GSK said Shingrix was not the force driving the lower guidance for vaccines—the “pharmacy structural element” was a one-time shift, and physicians’ enthusiasm remains strong, GSK’s chief commercial officer, Luke Miels, told investors Wednesday during the company’s second-quarter earnings call.Instead, the reduced projection reflects the CDC’s revised recommendations for RSV vaccinations. Back in June, the CDC’s Advisory Committee on Immunization Practices (ACIP) voted to limit its policy in the 60-to-74 age group to those with underlying medical conditions that could predispose them to more severe RSV disease, while delaying a decision on the 50-to-59 group despite the FDA’s approval for GSK’s Arexvy earlier, leaving the strongest backing only for people 75 and older.The restrictions shocked the industry as RSV vaccine developers saw their stock prices tumble at the news. Airfinity, a London-based health analytics company, has slashed the RSV market value for seniors in the U.S. from $4.7 billion to $1.7 billion in 2030. But GSK CEO Emma Walmsley, during a Wednesday press conference, said she’s confident that “[20]25 will be a year of growth, and that peak-year sales is secure.” GSK has put Arexvy’s peak annual sales at 3 billion pounds.The new policy comes as RSV vaccines are entering only their second season. GSK’s Arexvy has been competing with Pfizer’s Abrysvo, and Moderna is joining the race with newly FDA-approved mRESVIA.Walmsley pointed out that Arexvy’s 90%-plus efficacy in high-risk individuals is the strongest among existing shots, and that the latest ACIP recommendation has put GSK in a good position.Based on existing contracts, GSK foresees Arexvy will retain market leadership during the 2024-25 season, Miels said. But he declined to offer the exact number of Arexvy’s share. In the previous season, GSK won two-thirds of the market against Pfizer.During Pfizer’s second-quarter call Tuesday, U.S. commercial chief Aamir Malik said the New York pharma has “significantly strengthened” its contracting position for Abrysvo this coming season. He also pointed to the shot’s current needle-free reconstitution kit that doesn’t require to be frozen and thawed.“I will also remind you that there’s many healthcare providers and pharmacies that prefer simplifying their vaccine management by having one vaccine for both older adults and maternal, which only Abrysvo can offer,” Malik said. For GSK’s part, Miels noted that contracts for vaccines are typically constructed for pediatric and adult populations separately. What really counts, Miels said, “is the systems are willing to concentrate on single vaccines and separate them out more vigorously versus push them together.”While GSK has maintained its long-term projection, which Miels said assumes that a booster is required, predicting Arexvy’s third-quarter performance may be difficult, because the CDC has not clarified the criteria for “high-risk” for the 60-to-74 age group.“I think ACIP is going to be very conservative about broader coverage until they’ve got complete clarity in terms of benefit risk,” Miels said.The ACIP has demanded more data, including real-world evidence from surveillance databases, to support RSV vaccines’ benefit-risk profile. GSK has two studies that will assess Arexvy’s efficacy, immunogenicity and safety over three RSV seasons, the company’s R&D chief, Tony Wood, Ph.D., said on the investor call.“We want to see what this product looks like at three years because that is going to have a huge impact on pricing, durability, et cetera, which are all the things—and particularly in European contracts—that payers concentrate on,” Miels said.Beyond Europe and the U.S., GSK has also had “some initial discussions” in China with its newly signed Shingrix partner Chongqing Zhifei Biologics around Arexvy, and the British drugmaker “would very much like to expand the collaboration to include RSV,” Miels said.Despite weaker vaccines performance, GSK still dialed up its full-year guidance for the entire group as its long-acting HIV offerings, new launches in oncology and the COPD inhaler Trelegy continued to perform better than expected. The company now expects sales excluding COVID products to rise between 7% to 9% at unchanged exchange rates, compared with previously between 5% to 7%.

Merck shares dropped almost 10% Tuesday after the company disclosed a significant step down in shipments of its Gardasil vaccine to providers in China during the second quarter.Gardasil, designed to prevent infection with human papillomavirus, is Mercks second-best selling medicine, after the blockbuster cancer drug Keytruda. In the second quarter, overall sales of the Gardasil franchise reached $2.48 billion, little changed from the year-earlier period. Analysts had expected revenue of about $2.7 billion for the product in the quarter, according to Leerink Partners.Even though Merck expects revenue from Gardasil to keep increasing and reach $11 billion by 2030, investors zeroed in on the disclosure about China as a worrying sign. The Chinese market is critical for Gardasil, accounting for 60% to 70% of all sales outside the U.S. Merck was already bracing for a competitor to enter the Chinese market next year.The shipment drop by Mercks Chinese partner Zhifei in the second quarter was surprising and a meaningful departure from previous trends, CEO Robert Davis told analysts on a conference call Tuesday. We believe there could be multiple factors that may be contributing to this dynamic, and were working closely with our partner to try to tease out what exactly is happening.Davis pointed to an anti-bribery drive in China that is affecting the overall market for medical products as healthcare providers and government agencies put more guardrails in place. In addition, Zhifei scaled back its promotional efforts for the HPV vaccine as it broadened its portfolio. Merck is already working with Zhifei to counteract that, Davis said.Unless shipments increase to places providing vaccinations in China, Merck may ship less than the total contracted doses for 2024, the company told investors in a presentation accompanying its earnings report. The 2024 contract already contained less doses than were shipped in 2023.Still, Davis stressed that Merck continues to see a very attractive opportunity for Gardasil in the Chinese market. There are more than 120 million eligible women in China who have yet to be vaccinated against HPV, a leading cause of cervical cancer. And Merck hopes to expand sales to the male population in the country as well.In addition, some of the dynamics affecting Gardasil sales are also affecting the HPV market as a whole, Davis said. Merck hasnt seen a reduction in market share; Gardasils portion may actually be increasing, he said.We dont believe this step down, therefore, represents any change in the competitive dynamic, and Gardasil remains by far the market leader, Davis said.Though concerns about the Chinese market are warranted, analysts said Tuesdays sell-off likely went too far. Outside of Gardasil, Merck provided a solid second quarter financial update with positive updates to its pipeline and new products, Leerink Partners analyst Daina Graybosch wrote in a note to investors.Overall, the Gardasil issue is likely to be more temporary than the selloff would suggest, Evercore ISI analyst Umer Raffat wrote to clients. The stock is oversold here, he said. Shares of the company were little changed early Wednesday. '