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The Massachusetts-based biotech company signed a memorandum of understanding and a related land collaboration deal to develop drugs that will “be exclusively for the Chinese people” and won’t “be exported,” a Moderna spokesperson told CNBC.
Chinese media outlet Yicai first reported on Tuesday that Moderna was slated to make its first investment in China that could be worth around $1 billion, citing unnamed sources. The outlet also reported that Moderna CEO Stéphane Bancel was visiting Shanghai.
The Moderna spokesperson did not confirm the report or comment on the size of the deal.
“These agreements are focused on strengthening health security by targeting unmet needs and contributing to the ecosystem of medical solutions available to patients in China,” the spokesperson said.
Moderna is trying to capitalize on the success of its Covid vaccine, which uses a platform called mRNA to teach human cells to produce an immune response against a virus.
Moderna has several contracts to export or locally manufacture Covid jabs for countries such as Japan, Canada, Australia and Kenya. The deal disclosed Wednesday is the company’s first agreement with China.
It’s also the first deal to involve developing mRNA medicines overall, not just Covid shots.
Moderna in May said it was keen to sell its mRNA Covid vaccine to China after registering a legal entity in the world’s second-largest economy.
But the company and other U.S.-based companies have so far been shut out from the Chinese market.
Beijing has repeatedly insisted on using Chinese-made Covid vaccines for its population, even though their shots are seen as less effective than jabs from Moderna and New York-based Pfizer.
The country has also struggled to develop mRNA technology at home during the pandemic. China only approved its first mRNA shot earlier this year.
Separately on Wednesday, China’s Ministry of Commerce said it held a meeting with some of the world’s leading drugmakers to discuss their business operations in the country.
Moderna’s deal comes as tensions between the U.S. and China rise over issues ranging from national security to a heavy reliance on Chinese supply chains. The Biden administration has taken aggressive measures to diversify away from China in investment and trade.