(Yicai) Oct. 9 -- Shares in Chongqing Zhifei Biological Products surged by the exchange-imposed limit today after the Chinese vaccine maker and distributor said it has secured the exclusive right to distribute UK pharmaceutical giant GSK’s recombinant herpes zoster vaccine on the mainland in a deal involving over CNY20 billion (USD2.7 billion) worth of jabs.

Zhifei’s share price [SHE:300122] surged 20 percent to close at CNY58.40 (USD8), giving it a market capitalization of CNY140 billion (USD19.2 billion).

Zhifei has agreed to buy at least CNY20 billion (USD2.7 billion) of the vaccine over the next three years, the Chongqing-based firm said yesterday, citing the agreement penned with London-based GSK and GSK’s Hong Kong unit which runs up to Dec. 31, 2026. Around CNY3.4 billion (USD472.7 million) worth should be bought next year, CNY6.8 billion in 2025 and CNY10.3 billion (USD1.4 billion) in 2026.

GSK will also be given priority to become an exclusive partner of Zhifei in developing and selling any respiratory syncytial virus vaccines for the elderly within the territories of their partnership.

This is not the first time that Zhifei has teamed up with an international pharmaceutical giant. It has also been exclusive distributor for US pharma giant Merck Sharp & Dohme’s vaccines on the mainland since 2011.

In January, Zhifei extended the deal to sell and promote five of New Jersey-based Merck’s vaccines, including those for the human papillovarius and pentavalent rotavirus, until the end of 2026 in a contract involving over CNY100 billion (USD13.7 billion) worth of jabs.

Zhifei was set up by Jiang Rensheng and Liu Junhui in 1995 and the vast majority of its revenue, at over 90 percent, comes from its distribution business, with self-developed products accounting for less than 10 percent. However, its sister firm Walvax Technology, which was formed by Liu, mainly focusses on developing its own vaccines.

Zhifei logged a 14 percent jump in net profit in the first half from the same period last year to CNY4.2 billion (USD576.2 million), while revenue surged 33 percent to CNY24.4 billion (USD3.3 billion).

Editor: Kim Taylor