(Yicai) Feb. 9 -- China’s Kangtai Biological Products said it has called off a planned roughly USD400 million vaccine joint venture with AstraZeneca in Beijing, citing severe market shifts and the risk of an industry downturn.

Ending the project will not have a material impact on Kangtai's existing business, financial position, or operating performance, nor will it affect the Shenzhen-based company’s long-term development plans, it said on Feb. 6. The vaccine maker pointed out that it had not made any actual investment in the JV.

Kangtai added that it will continue to integrate internal and external resources, further strengthen its international business footprint, and pursue sustained and high-quality development.

The company’s shares [SHE: 300601] closed 0.5 percent lower at CNY15.49 (USD2.24) apiece in Shenzhen today. The stock has gained 4.9 percent since the end of last year.

Last March, Kangtai unveiled plans to establish a 50:50 joint venture with AstraZeneca in the Beijing Economic-Technological Development Area to develop innovative vaccines for the Chinese market, including AstraZeneca’s investigational combination jab IVX-A12 targeting respiratory syncytial virus and human metapneumovirus.

The venture was slated to become the UK-Swedish drugmaker’s first vaccine production base in China.

While no RSV nor hMPV vaccines have been approved yet in China and effective antiviral drugs remain unavailable, demand for certain pediatric jabs has slowed as the birth rate continues to decline, industry insiders said. At the same time, the adult market for inoculations has yet to fully develop, leaving the broader vaccine sector in a period of painful transformation, they added.

China's batch release and imports of vaccines both fell last year, according to data from the China Chamber of Commerce for Import and Export of Medicines and Health Products. Multinational pharmaceutical firms with business in the country largely responded by cutting back or suspending imports to work through existing inventories.

Kangtai said it expects net profit to have plunged 64 percent to 76 percent to between CNY49 million and CNY73 million (USD7.1 million and USD10.5 million) last year.

AstraZeneca continues to increase its investment in China. On Jan. 29, the Cambridge-based firm said it plans to invest more than USD15 billion over the next five years to expand its drug manufacturing, research, and development footprint in the country.

Editor: Martin Kadiev