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Glaxo signs €1.5 bln vaccine deal with Brazil

GlaxoSmithKline Plc sealed a €1.5 billion ($2.2 billion) deal with Brazil guaranteeing sales of its pneumococcal vaccine for 10 years, the company said.

Glaxo, the world's second-biggest drugmaker, said it will receive a starting price for Synflorix, a vaccine aimed at preventing pneumonia and meningitis, of €11.50 per treatment, falling to €5 in future years when Brazilian health foundation Fiocruz starts making the product itself.

The vaccine price is a significant discount to the €30 to €40 that these vaccines usually cost in Europe, because of the period of the deal.

The agreement is a landmark as most drugs are sold over far shorter periods and have a more uncertain pricing structure. It is part of Glaxo's strategy to build its presence in key emerging markets using innovative agreements.

“What we're seeing out of Glaxo is the willingness to do more deals in more territories to expand distribution and increase revenues, and in particular in emerging markets,” said Damian McNeela, an analyst at brokerage Panmure Gordon.

Glaxo announced the partnership earlier this month, but did not mention the value of the deal. (Reuters)