Sinovac will make $8.8 million cash contribution, Dalian Jin Gang will contribute assets worth $22.5 million.!--h2>
Sinovac Biotech inked a joint venture (JV) agreement to establish Sinovac Dalian Vaccine Technology. The JV will research, develop, produce, and commercialize human-use vaccines. Sinovac will contribute its expertise and experience in developing and commercializing world-class vaccines; Dalian Jin Gang Group will contribute its land-use rights, manufacturing facilities, and established operating infrastructure.
Sinovac Biotech will make an initial cash contribution of 60 million RMB ($8.8 million). Dalian Jin Gang Group’s asset contribution, inclusive of its manufacturing facilities, production lines, and land-use rights, has an appraised value of 140 million RMB ($22.5 million). Equity interest is divided 30% and 70% between Sinovac and Dalian, respectively. Sinovac will increase its equity shares to 55% in exchange for a cash contribution of 50 million RMB ($7.5 million), on or before December 31, 2010.
According to Weidong Yin, chairman, president, and CEO of Sinovac, the JV provides a “highly efficient platform to expand our manufacturing capacity, diversify our production capabilities, and increase our operational scale. By leveraging the favorable investment environment, Dalian's relatively low operating cost, and its existing facilities, this JV enables Sinovac to cost-effectively establish manufacturing platforms for live attenuated vaccines and vero cell cultured vaccines, thus adding another important manufacturing site for Sinovac's vaccine products.
Sinovac representatives will assume key positions at the JV including chairman, GM, head of R&D, and financial director. Sinovac Dalian will be headquartered in Dalian, Liaoning Province. The campus currently contains two vaccine production lines—one for the vero cell cultured vaccines and one for live attenuated vaccines—and has capacity to house approximately six different production lines.
Sinovac Dalian's development pipeline is expected to be composed of vaccines for rabies, mumps, varicella, and rubella. The Dalian-based facility has a designed annual manufacturing capacity of 20 million doses of vero cell cultured vaccines and 20 million doses of live attenuated vaccines.