Pfizer has taken another step towards forming a joint venture with Zhejiang Hisun Pharmaceutical to market generic drugs in China.
The US-based pharma firm has now signed a framework agreement with Hisun to develop, manufacture and commercialise generic pharmaceutical products in both China and the rest of the world.
Pfizer described the latest move as an 'important milestone' in the formation of the joint venture, which is to be named Hisun Pfizer Pharmaceutical Co., Ltd.
The new company will receive a total of $295m in initial investment, with Hisun to own 51 per cent of the joint venture, while Pfizer will control the remaining 49 per cent.
Pfizer said that either company could contribute existing generic products to be manufactured and marketed by the new company, and that their existing manufacturing sites would also be available for its use.
The agreement, which was signed at the China-US Economic Trade Forum in Los Angeles, follows a memorandum of understanding signed between the two companies in June 2011, confirming their intention to establish the joint venture.
That deal came only two months after a similar agreement with Shanghai Pharmaceuticals Co that involved selling and distributing an unnamed Pfizer product in China and strengthening their existing co-promotion deal for Pfizer's Prevenar.
The Chinese generics market is expected to be an area of 'huge potential', and analysts Frost & Sullivan expect it to see major growth up to 2017.
Other companies to have increased investment in the Chinese generics market in recent months include AstraZeneca, which announced a deal to acquire Guangdong BeiKang Pharmaceutical Company in December, 2011.