Shares of healthcare major GlaxoSmithKline (NYSE:GSK) are ticking higher today after the company announced an exclusive agreement with China’s Chongqing Zhifei Biological Products (Zhifei) to co-promote Shingrix, GSK’s shingles vaccine, in China.
The partnership is for an initial period of three years and can be extended by mutual agreement. Zhifei is the largest vaccine company in China by revenue, and this strategic move is expected to substantially boost the availability of Shingrix in the country.
Shingles are caused by the same virus that causes chickenpox, and the risk of developing shingles rises with age. In clinical studies, Shingrix has demonstrated 100% efficacy in preventing shingles in Chinese adults aged 50 and over.
Zhifei has over 30,000 vaccination points across China, and the deal also includes an option to extend the partnership to include GSK’s RSV vaccine Arexvy. Under the transaction, Zhifei has agreed to purchase £2.5 billion worth of Shingrix over the three-year period. Impressively, GSK aims to double the worldwide sales for Shingrix to over £4 billion by 2026.
Is GSK a Good Stock to Buy Now?
Despite broader market gyrations, GSK shares have steadily ticked 27.5% higher over the past year. A price-to-earnings multiple of 4.2 indicates the stock still has room for a valuation multiple expansion.
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