Bristol-Myers flips its HIV pipeline to GlaxoSmithKline’s ViiV in a $3B deal

23 Dec 2015 | Author: | No comments yet »

Europe’s Pharma Sector Is Finishing 2015 With a Deal Flurry.

The deal is the third eye-catching one of the week in Europe, allowing the sector to end the year with a flurry after being overshadowed this year by a frenzy of merger and acquisition activity in the U.S.. LONDON – British pharmaceutical company GlaxoSmithKline said it would buy HIV drugs at different stages of development from U.S. rival Bristol-Myers Squibb in a deal which would boost its ViiV Healthcare unit. Under the agreement, GlaxoSmithKline, the British drug maker, would pay $317 million for the late-stage H.I.V. drugs that the New York-based Bristol-Myers has been developing, and it would make an additional payment of up to $518 million depending on sales and development milestones. GSK said the acquisitions would provide ViiV Healthcare, its HIV unit in which Pfizer and Shionogi are junior partners, with new opportunities for growth. The U.K.’s largest drugmaker may also give $518 million plus royalties if the late-stage medicines reach certain milestones, and $587 million in additional payments for the early-stage drugs if they meet targets.

It used to dominate the market but ViiV’s 2014 sales of 1.5 billion pounds ($2.3 billion) were less than a quarter of the HIV revenue generated by market leader Gilead Sciences . ViiV will pay an initial $317 million to buy late-stage HIV drug candidates from Bristol-Myers, including a phase III development treatment fostemsavir, plus $33 million for its preclinical assets.

GSK’s deal falls into both categories: HIV treatments are already one of its biggest revenue generators, and buying the BMS portfolio (through its majority-owned unit ViiV) will cement its place as the second-biggest player in the segment behind Gilead Sciences GILD -0.59% . The transactions for the two sets of assets are likely to be completed in the first half of next year. “The agreements with ViiV Healthcare now put the development of these potentially first-in-class compounds into the hands of a global specialist company exclusively dedicated to finding new medicines for people living with HIV,” said Chief Scientific Officer Francis Cuss.

AstraZeneca was also part of a big deal with France’s Sanofi SA SNYNF 2.87% in November that gave each company access to over 200,000 patents from their respective intellectual property libraries, with the aim of bringing down the cost of researching new drugs. The late-stage assets acquired by Glaxo included fostemsavir, a medicine for difficult-to-treat patients that has breakthrough therapy designation from the U.S. But it made its biggest deal of the post-Viehbacher era earlier this week when it swapped some $25 billion worth of assets with Germany’s Boehringer Ingelheim AG.

That deal will make Sanofi the world’s biggest consumer healthcare specialist, while making the German company a global force in the animal health business.

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