Zurich: Swiss drugmaker Novartis AG is buying an 85% stake in Chinese vaccines company Zhejiang Tianyuan Bio-Pharmaceutical for $125 million to boost its presence in the fast-growing market.

Emerging markets are a sweet spot for companies such as Novartis, which said earlier this week it was investing $1.25 billion in research facilities in China. Novartis said on Wednesday the acquisition was part of a strategic initiative to build a vaccines industry leader in China and expand its limited presence in this booming market segment.

Drugmakers’ traditional model is under threat from looming loss of patents giving them exclusivity on some big sellers, and companies are keen to diversify away from the core business of prescription medicines into areas such as vaccines.

Novartis, the maker of high blood pressure drug Diovan, said privately owned Tianyuan offered a range of marketed vaccine products in China and research and development projects focused on various preventable viral and bacterial diseases.

Tianyuan had more than doubled its net sales to approximately $25 million in 2008 compared with 2006, Novartis said.

The deal still required government and regulatory approvals in China.