Pfizer has signed an agreement with the Chinese biopharmaceutical company Zhejiang Hisun Pharmaceuticals with the objective of establishing a $545-million joint venture to develop and commercialize branded generic medicines in both China and the global market. The agreement that was signed is a framework agreement that Pfizer described as an “important milestone” in the formation of a joint venture between the companies.

The agreement builds on a memorandum of understanding that the companies signed in June 2011 on their intention to establish a joint venture.

According to the framework agreement, the potential joint venture will be called Hisun Pharmaceuticals Co. Hisun will own 51% and Pfizer will own 49%, and the aggregate and registered capital will be $295 million and $250 million respectively. The companies will be focusing on the potential for manufacturing cooperation, broader commercialization of medicines through local and global sales and marketing infrastructures, and the R&D of off-patent medicines. After the joint venture has been formed, both companies will be able to contribute selected existing products, manufacturing sites, cash, and other relevant assets.

Pfizer believes that generic medicines represent one of the fastest growth segments in the global pharmaceutical market. In China, branded generics account for 60% of the domestic market and the country is expected to become the world’s second largest pharmaceutical market by 2015.

The framework agreement was signed at the Sino–US Economy & Trade Forum held in Los Angeles late last week during the US visit of China’s vice-president Xi Jinping. The US Secretary of Commerce, John Bryson, as well as other senior officials from the Chinese and US governments attended the event.