Merck will form a joint venture with Sinopharm, cooperating on vaccines for diseases like human papillomavirus in China. Human papillomavirus, or HPV, is a sexually transmitted disease that causes most cases of cervical cancer. Merck makes Gardasil, one of two vaccines approved to prevent HPV.
The companies will discuss teaming up to sell Merck's drugs in the country, Merck said. The companies did not disclose terms of their agreement.
Merck, based in Whitehouse Station, N.J., is the world's second-largest drugmaker by revenue. It said doing more business in emerging pharmaceutical markets like China is a key part of its strategy.
In premarket trading, Merck shares rose 39 cents to $35.66.