In this undated file photo, an ambulance of Shanghai Fosun Pharmaceutical is displayed during the 3rd China International Import Expo in Shanghai. (PHOTO / XINHUA)

Chinese mainland's leading healthcare group Shanghai Fosun Pharmaceutical (Group) Co Ltd has taken a significant step in the production of mRNA-based COVID-19 vaccines by forming a joint venture with German biotechnology firm BioNTech SE.

MRNA vaccines teach human cells how to make a protein, or even just a piece of a protein, that triggers an immune response inside the bodies.

Fosun Pharmaceutical, which is listed on the bourses in Shanghai and the Hong Kong Special Administrative Region (HKSAR), said on Saturday that its subsidiary Fosun Pharmaceutical Industrial has joined hands with BioNTech to set up a joint venture for manufacturing and commercialization of the novel coronavirus vaccine product. The two companies will hold stakes of 50 percent each in the new joint venture.

Under the agreement, Fosun Pharmaceutical Industrial will invest US$100 million in cash and other assets while BioNTech will provide intangible assets which include a license of the relevant manufacturing technology and know-how valued at no more than US$100 million.

Fosun Pharmaceutical Industrial shall provide a manufacturing facility, which has a potential capacity of producing up to 1 billion doses of coronavirus vaccine products every year, according to the announcement.

Under the agreement, Fosun Pharmaceutical Industrial will invest US$100 million in cash and other assets while BioNTech will provide intangible assets which include a license of the relevant manufacturing technology and know-how valued at no more than US$100 million

The joint venture shall engage the affiliate of Fosun Pharmaceutical Industrial as the contract sales organization to provide marketing and sales services for the COVID-19 vaccine product on the mainland.

ALSO READ: Fosun to end BioNTech's vaccine trial, seeks nod for another

Fosun Pharmaceutical saw its share prices surge to its daily limit of 10 percent on the Shanghai Stock Exchange on Monday, while its price in the HKSAR jumped 25.47 percent to HK$62.8 (US$8.1) per share.

Zhao Haichun, an analyst with Sinolink Securities, said Fosun Pharmaceutical has once again taken the upper hand in mRNA industry chain on the mainland by setting up the joint venture. It has also proved the company's professionalism and decision-making power under an international vision.

But given the complexity regarding the materials and production process of mRNA vaccines, the manufacturing facility is more likely to become operational by the end of this year or early next year, said Zhao.

Established in 2008, BioNTech's market cap was estimated at around US$44.37 billion, according to Zacks Investment Research. By March this year, BioNTech had delivered more than 200 million doses of mRNA-based COVID-19 vaccines to more than 65 countries and regions, according to the company's earnings report released in late March. Last year, its total revenue stood at 482.3 million euros (US$586.4 million), while the number was only 108.6 million euros one year earlier.

Nasdaq-listed BioNTech has seen its price spike by more than tenfold since last March. Its price jumped 9.35 percent to close at US$183.71 on Friday.

In March last year, BioNTech entered into an agreement with Fosun Pharmaceutical for the development and commercialization of mRNA-based COVID-19 vaccines on the mainland. Fosun Pharmaceutical also subscribed to US$50 million of BioNTech's ordinary shares under a separate investment agreement.

READ MORE: Fosun, BioNTech find no vaccine safety concerns in initial probe

On April 9, 2020, BioNTech formed an agreement with Pfizer for the research and development of COVID-19 vaccine outside the Fosun territory. BioNTech and Pfizer have signed orders of 1.4 billion doses for delivery this year.