AstraZeneca reached a licensing deal with Chinese firm BioKangtai to help provide its adenovirus vector-based COVID-19 vaccine candidate, created by the University of Oxford, to China, AstraZeneca said in a social media post on Thursday. The pair will also explore the possibility of producing the vaccine for other markets.

Under the pact, AZ grants exclusive clinical development, production and commercialization rights to the vaccine in China to BioKangtai, which will in return reserve enough capacity to make at least 100 million doses of the shot by the end of 2020 and expand to 200 million doses per year by the end of 2021. Financial terms were not disclosed

China is developing several vaccine candidates of its own, although the deal suggests that Chinese leaders and scientists believe that the domestic market could benefit from more vaccine options. The country is following in the footsteps of nations like the U.S., which earlier in the year pledged $1.2 billion to secure at least 300 million doses of AstraZeneca’s vaccine.

Co-developed by AstraZeneca and the University of Oxford, the experimental vaccine AZD1222 is among the world’s most advanced vaccine candidates, and is being tested in late-stage, or Phase 3, studies in the U.K., Brazil, and South Africa. Moderna Inc. And competitor Pfizer Inc. both launched Phase 3 U.S. studies of their vaccine candidates in late July, as did China’s drugmakers Sinovac Biotech Ltd. and China National Biotec Group Co.

It could not be determined how the agreement with Kangtai came together. AstraZeneca said it was the only multinational pharmaceutical company to send a representative to a business forum with Chinese President Xi Jinping in late July. Mr. Xi “hopes we can overcome challenges amid the epidemic and to be our best selves,” Wang Lei, AstraZeneca’s executive vice president, said in an interview with state-run China Central Television after the forum.

Kangtai, one of the world’s major producers of the hepatitis B vaccine, has previously said it will invest one billion yuan ($143.8 million) to build a manufacturing plant for Covid-19 vaccines with a capacity of 100 million doses a year. It has been earmarked by authorities as an emergency health project and is expected to be completed as early as the end of August.

Todd Horwitz Chief Strategist
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