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Modern On Wednesday, the company announced that it had reached an agreement with Chinese officials to research, develop and manufacture messenger RNA drugs in the country, despite rising tensions between the US and China.
The Massachusetts-based biotech signed a memorandum of understanding and related land cooperation agreement to develop drugs that will be “exclusively for the Chinese people” and not “exported,” a Moderna spokesperson told CNBC.
Chinese media outlet Yicai first reported on Tuesday, citing unnamed sources, that Moderna is set to make its first investment in China, worth about $1 billion. The outlet also reported that Moderna CEO Stéphane Bancel was visiting Shanghai.
The Moderna spokesman didn’t confirm the report or comment on the scope of the deal.
“These agreements focus on strengthening health security by targeting unmet needs and contributing to the ecosystem of medical solutions available to patients in China,” the spokesman said.
Moderna is trying to capitalize on the success of its Covid vaccine, which uses a platform called mRNA to teach human cells to mount an immune response against a virus.
Moderna has multiple contracts to export or locally manufacture Covid vaccines for countries including Japan, Canada, Australia and Kenya. The deal, announced on Wednesday, is the company’s first deal with China.
It’s also the first deal to include development of mRNA drugs overall, rather than just Covid vaccines.
Moderna announced in May that it was interested in selling its mRNA Covid vaccine to China after registering a legal entity in the world’s second largest economy.
But the company and other US-based companies have so far been barred from the Chinese market.
Beijing has repeatedly insisted on using Chinese-made Covid vaccines for its population, even though their shots are considered less effective than Moderna and New York shots Pfizer.
The country has also struggled to develop mRNA technology domestically during the pandemic. China only approved its first mRNA vaccine earlier this year.
Separately, China’s Commerce Ministry said on Wednesday that it held a meeting with some of the world’s top drugmakers to discuss their business operations in the country.
This contains Pfizer, AstraZeneca, Novo Nordisk, Merck, Sanofi And GE HealthCare Technologies. It’s unclear if Moderna was included in the roundtable discussion.
Moderna’s deal comes at a time when tensions are rising between the US and China over issues ranging from national security to a heavy reliance on Chinese supply chains. The Biden administration has taken aggressive measures to diversify investment and trade away from China.