(Yicai) Jan. 7 -- Shares of WuXi Biologics dropped after the global open-access biologics tech platform spun off from Chinese biotech firm WuXi AppTec in 2017 said its unit plans to sell its vaccine plant in Ireland to US pharmaceutical giant Merck Sharp & Dohme for around USD500 million.

WuXi Biologics [HKG: 2269] fell 4.2 percent to HKD15.90 (USD2.05) a share as of lunch break in Hong Kong today, after earlier tumbling by as much as 5.5 percent.

WuXi Vaccines' plant fully supports the business growth strategy of its partner MSD, WuXi Biologics said yesterday. The transaction will help MSD better integrate vaccine manufacturing into its global production network, while the unit can improve its asset efficiency and profitability by focusing on its base in China's Suzhou to provide contract development and manufacturing services, it added.

The deal will likely be completed in the first half of this year amid customary closing conditions, WuXi Biologics noted, adding that it will not affect the biopharmaceutical factory in Ireland and the vaccine plant in Suzhou.

The proceeds from the transaction can be used to enhance WuXi Biologics' global network to serve customers better and repurchase shares, according to Chris Chen, chief executive of WuXi Biologics and chairman of WuXi Vaccines.

The deal is based on a strategic evaluation and serves customers' business needs, WuXi Biologics told Yicai. The factory was built to produce exclusive WuXi Vaccines' jabs for MSD in Ireland as part of a long-term contract, it added, without disclosing the jabs' type.

On Dec. 24, WuXi AppTec said it will sell its cell and gene therapy subsidiaries -- Philadelphia-based WuXi Advanced Therapies and Oxford Genetics -- to US private equity firm Altaris in a retreat from non-core businesses for the Chinese company named in the proposed US Biosecure Act. The deals will likely be completed in the first six months of this year, subject to regulatory approval, it added.

WuXi AppTec and WuXi Biologics are two independent companies, with Li Ge as their chairman. WuXi Vaccines is a contract development and manufacturing organization focused on human jabs and prophylactic antibodies.

New Jersey-based MSD is one of the four biggest vaccine producers worldwide. Its main product is a human papillomavirus vaccine.

Editor: Martin Kadiev