US biotech Moderna strikes deal to develop mRNA drugs in China

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US drugmaker Moderna has struck a deal to make messenger RNA drugs for use in China, despite the tensions between Washington and Beijing.

The biotech said on Wednesday that it had reached an agreement with authorities in Beijing to research, develop and manufacture drugs that would “not be exported”.

“Any medicines produced under this agreement will be exclusively for the Chinese people — who face many of the same health challenges that affect other communities around the world,” the company said in a statement.

Drugmakers remain interested in expanding in China, which faces an ageing population, higher rates of chronic diseases and health concerns stemming from an increasingly westernised diet. The Chinese government has also sped up the approval process for innovative medicines, making it an even more attractive market.

“With this announcement, we are taking further steps to deliver on our mission of creating the greatest possible impact to people through mRNA medicines,” the company said.

New York-listed Moderna was one of the biggest winners from the coronavirus pandemic after developing its vaccine. It was among a number of international pharmaceutical groups pushing for Beijing to buy their vaccines.

The Financial Times reported last year that the company had refused a request from Chinese authorities to hand over the core intellectual property behind its vaccine, co-developed with the US government, leading to a collapse in negotiations.

Last October, one individual close to the Moderna team in Greater China said the company had “given up” on its previous efforts to access the Chinese market.

Based in Cambridge, Massachusetts, Moderna is trying to build on the success of its vaccine, which used a platform based on a genetic code called mRNA to teach the body’s immune system to respond to the virus. It is now using the code to develop other treatments including for cancer.

Moderna declined to comment on reports in Chinese media that the mRNA deal was worth $1bn, or on the specific drugs it is aiming to develop in China.

While western drugmakers are pursuing their ambitions in China, Beijing’s tensions with many western governments has prompted some to draw up contingency plans in the event their businesses in China are caught in the crosshairs.

AstraZeneca has drawn up plans to break out its China business and to list it in Hong Kong amid mounting geopolitical tensions.