(Yicai Global) Dec. 23 -- Chinese vaccine developer and seller Chongqing Zhifei Biological Products will renew its sales agency agreement with US global pharma giant Merck Sharp & Dohme -- called Merck in the US and Canada -- that started from 2011. The company will buy at least CNY31.5 billion (USD4.8 billion) of its shots in the next two and a half years.

The firm will thus remain the exclusive agent for procurement and sales of the US drug developer’s four vaccines in the Chinese mainland. 

The four inoculants Zhifei Biological distributes are jabs for the human papillomavirus, the duovirus, pneumonia and hepatitis A, the Chongqing-based company said in a statement after yesterday’s signing. 

Its shares [SHE:300122] closed up 1.41 percent today at CNY153.59 (USD23.40) after falling back from a 3 percent morning rise on the news.

HPV Highest

The base value of the HPV inoculants to be bought is projected at about CNY10.3 billion (USD1.6 billion) next year, while those for 2022 and the first half of 2023 are a respective CNY11.6 billion and CNY6.3 billion, the most among all types, the statement said, adding the base purchase amount and corresponding supplies can be upped based on specific circumstances.

Zhifei Biological has imported, promoted and sold MSD’s vaccines in the Chinese mainland since April 2011. It procured about CNY3.1 billion worth in 2018. This grew to around CNY6.1 billion last year and some CNY7.2 billion in the first three quarters, per the statement. 

The two parties’ agreement ensures the basic supplies of its subject items and will boost the company’s future business revenue and profits, the statement explained, adding the contract is for base purchase values, and is thus not a purchase order per se and does not constitute a commitment to performing beyond such amounts. 

Editor: Ben Armour, Xiao Yi