Business, / By Sta

Novo mesto - The Novo mesto-based pharma company Krka and its Chinese partner Ningbo Menovo Pharmaceutical have set up a joint venture Ningbo Krka Menovo Pharmaceutical. Krka holds a 60% stake in the new company. Its initial capital will total EUR 30m and it will be led by a three-member board of directors.

According to Krka, the initial capital will be used to finance development, purchase land and build production capabilities for sterile drug dosage products.

The end products in the form of tablets and capsules will be manufactured by Ningbo Menovo Pharmaceutical under a long-term contract.

Krka expects the first mayor sales results in China in some three years.

The joint venture will also make products for Europe and other Krka's market, the drug-maker said as it presented its nine-month results earlier this week.

Krka, which signed the deal with Ningbo Menovo Pharmaceutical on Wednesday, will have two representatives in the three-member board of directors, one of whom will chair the board.

The joint venture now awaits clearance from the Chinese authorities. The first tranche of the subscribed capital is planned for January next year.

The company will first focus on the registration of Krka's products in China.

Krka has been striving to penetrate to the Chinese market for a while. Several options were contemplated and in the summer the company was preparing to take over a small development-oriented company but then abandoned the idea.

Krka has been cooperating with Ningbo Menovo Pharmaceutical for years; it has been holding minority stakes in its companies Anhui Menovo Pharmaceutical and Zhejiang Menovo Pharmaceutical since 2008.