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

Bristol-Myers Squibb ($BMY) is getting out of HIV R&D, selling its pipeline to the GlaxoSmithKline ($GSK)-controlled ViiV Healthcare in a transaction worth as much as $3 billion.

Under the agreement, ViiV is paying $317 million up front for Bristol-Myers' two late-stage assets, including the Phase III fostemsavir, which has received the FDA's breakthrough therapy designation. And ViiV is trading $33 million for the early-phase pipeline, bringing in preclinical and discovery-stage assets with novel mechanisms of action. Bristol-Myers is due as much as $1.1 billion more tied to development milestones, and the company is in line for as much as $1.5 billion more in tiered royalties on future sales.

ViiV, which is minority owned by Pfizer ($PFE) and Shionogi, expects to close the buyout in the first half of next year. Bristol-Myers' on-the-market HIV therapies--Reyataz, Evotaz, Sustiva and the Gilead Sciences ($GILD)-partnered Atripla--are not part of the transaction.

The deal marks a major move for ViiV as it climbs the ranks of HIV drug developers. The company, formed in 2009, has scored two FDA approvals in the ensuing years and now contends with market leaders Gilead and Johnson & Johnson ($JNJ) in the HIV space. GSK this year considered taking the company public and cashing out on its controlling stake but, facing pressure from analysts and investors, decided to keep ViiV as is.

Now, picking up Bristol-Myers' assets, the company has assembled a pipeline it believes will fuel its future growth. Fostemsavir, which is designed to block HIV's access to immune cells, is in line for regulatory filings by 2018, ViiV said, and BMS-986173, which interrupts the viral maturation process, is in the midst of Phase IIb studies. The two treatments join a promising project that combines J&J's Edurant with ViiV's investigational cabotegravir, an every-other-month cocktail that charted impressive results in a Phase IIb study this year with pivotal trials planned for 2016.

For Bristol-Myers, the deal ends nearly three decades of R&D in the field, putting the future of "potentially first-in-class compounds into the hands of a global specialist company exclusively dedicated to finding new medicines for people living with HIV," Chief Scientific Officer Francis Cuss said in a statement. In recent years, the company has shifted its focus to cancer, blazing a trail with the immunotherapy Opdivo, and has made strides in hepatitis C.

- read GSK's statement
- here's Bristol-Myers' announcement