Vectura sets up JV, Kinnovata, for new respiratory business in China

UK-based developer of inhaled therapies Vectura (LSE: VEC) saw its shares rise 4.8% to 96.93 pence in morning trading (May 13), after it revealed that it has established Tianjin Kinnovata Pharmaceutical Company in China with two partners; Tianjin KingYork Group Company, a leading Chinese pharmaceutical company and specialist manufacturer of corticosteroid based products, and Zendex Bio Strategy, a private equity investor based in Hong Kong.

Kinnovata will develop, manufacture and commercialize respiratory products for the rapidly growing domestic Chinese and other regional markets in Asia. This new company will initially exploit Vectura’s Clickhaler and Duohaler dry powder inhaler (DPI) technology platforms to address current unmet needs in the Asian asthma and chronic obstructive pulmonary disease (COPD) markets. Recent estimates suggest the overall incidence of asthma in China is about 2.0%; a patient population of more than 25 million people. COPD is an even bigger challenge, with around 42 million people suffering in China, and forecasts estimate that this number will increase to nearly 56 million by 2021.

Despite government-led health care initiatives in recent years, there remains a pressing need for more affordable inhaled products in China. Both asthma and COPD are expected to increase significantly over the next 20 years, in part driven by population growth, increasing urbanization and an ageing population coupled to the extremely high smoking rates among Chinese adults, especially men (approximately 75% of male adults in China are either current or former smokers).