VaxGen to set up JV in South Korea

VaxGen of the USA and a group of South Korean investors have announcedthe formation of a joint venture which will invest approximately $120 million to build and operate a facility in Incheon, South Korea, to manufacture VaxGen's AIDS vaccine, AIDSVAX. The JV, to be called Celltrion, will also fund construction of a smaller facility in South San Francisco, California. The South Korean investors participating in the JV are Nexol Corp, Korea Tobacco & Ginseng Corp, and J Stephen & Co Ventures.

Under the terms of the deal, VaxGen will provide mammalian cell culture technology and biologics production expertise to Celltrion, but no cash, in exchange for a 44% interest in the JV. The South Korean backers will provide the funding necessary to design and construct both facilities and to validate and operate the Incheon unit. In its first phase of development, the latter facility is expected to be capable of producing up to 200 million doses of AIDSVAX per year, while the US plant could produce up to 10 million doses more. Celltrion expects to complete construction of the Korean unit by the end of 2003.

Lance Gordon, Vaxgen's chief executive, said the JV "builds extraordinary value" for the firm and its South Korean partners, claiming that "Celltrion supports our goal of expediting the approval and commercial introduction of AIDSVAX, if it proves safe and effective, about a year from now."