GSK antes up Viiv stake, grabs control of potential HIV blockbuster
Eyeing an upcoming bout with Gilead for market share in the rich HIV market, GlaxoSmithKline has executed a deal that will give it a much bigger stake in a promising late-stage drug and a portfolio of follow-up treatments. GSK ($GSK) and its minority partner Pfizer ($PFE) are each giving up a portion of their equity in Viiv Healthcare to Shionogi in exchange for a controlling interest in dolutegravir, a late-stage integrase inhibitor that has demonstrated success at barring HIV from penetrating cells.
In place of their pact to split profits on the potential blockbuster evenly, Shionogi will now own 10% of Viiv, which GSK officials tell Reuters will in turn give the pharma giant close to a two-thirds interest in dolutegravir.
GSK is clearly pumped about dolutegravir's commercial potential. In a head-to-head study that reported out in July, the treatment blocked all signs of the virus in 88% of patients after 48 weeks, compared to 81% for Gilead's ($GILD) Atripla. The data persuaded JP Morgan to raise the chances of regulatory success to a certainty, opening the door to a new drug worth close to $5 billion a year. The developers expect to file for approvals before the end of this year.
GSK and Pfizer set up Viiv three years ago, with both committing HIV/AIDS assets and splitting ownership 85% and 15%. After the deal goes through Glaxo will own 76.5% of the joint venture with Pfizer at 13.5%. Shionogi's 10% will be augmented with a double-digit royalty stream if the HIV treatment is approved.
The deal gives the Japanese pharma company rights to "a continued revenue stream from the integrase inhibitor portfolio as well as a stake in ViiV Healthcare itself, and will be able to contribute to the future direction of these compounds which we know very well and continue to be excited about," says Shionogi CEO Isao Teshirogi. "In parallel, we now have increased flexibility in our ability to dedicate resources to the global development of our internal development pipeline."
At some point, analysts think that Viiv will be spun out into an independent company, offering a direct challenge to Gilead, which has a commanding position in the AIDS field.
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