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GlaxoSmithKline and Pfizer Inc announced innovative agreement that they would create a 'new-world HIV focused specialist' company ('Newco')
  GSK and Pfizer have also established a website for all interested parties.
"Creates a new focused HIV business with the independence and sustainability to deliver significant improvements in treatment, access and shareholder value - Renews focus on HIV with industry-leading pipeline to deliver more new HIV treatments"
Reuters, AP: The tie-up underlines a growing trend by big pharmaceutical companies to collaborate in the costly and risky process of developing new medicines. The new company does not include HCV, both company's HCV drug development programs remain separate, for now. The partners said the new business would be more sustainable and broader in scope than either company's individually. It will include 11 already marketed products -- including Glaxo's top-sellers, Combivir and Epzicom -- that together generated sales of 1.6 billion pounds ($2.4 billion) last year, plus a pipeline of six new medicines, of which four are in mid-stage Phase II development. "At the core of this specialist business is a broad portfolio of products and pipeline assets, which can be more effectively leveraged through the new company's strong revenue base and dedicated research capability," said Glaxo Chief Executive Andrew Witty. One of the goals will be to develop new fixed-dose combination therapies using existing and novel medicines. Fixed-dose tablets are important in providing more convenient treatments for fighting HIV infection. An estimated 33 million people globally are infected with the AIDS virus, most of them living in Africa and other developing countries. ($1=.6732 Pound). "With the strength of the companies' current HIV products, as well as the complementary fit of Pfizer's HIV pipeline and GSK's global distribution capabilities, the new company is well positioned to bring new and improved medicines to patients with more speed and efficiency," Kindler added. The company will have a pipeline of 6 innovative and targeted medicines, including 4 compounds in phase II development. Altogether, the new company will have 17 molecules at its disposal to develop in fixed-dose combinations as possible new HIV treatments. The new company will contract research and development services directly from Glaxo and Pfizer to develop new medicines.
Bloomberg: One of Glaxo's best-selling HIV medicines, Combivir, will lose patent protection in 2012 and Pfizer, which agreed to buy U.S. rival Wyeth this year, may look to exit the market for HIV medicines in the future, said Navid Malik, an analyst at Matrix Corporate Capital in London.
“Glaxo is looking to consolidate its franchise through this tie-up with Pfizer, who are probably looking to exit HIV,” Malik said.
Andrew Witty, Chief Executive Officer, GSK said: "Today marks a definitive step by GSK to renew our focus and deliver more medicines, more efficiently, to people living with HIV/AIDS. At the core of this specialist business is a broad portfolio of products and pipeline assets, which can be more effectively leveraged through the new company's strong revenue base and dedicated research capability. HIV remains a global threat with increasing incidence and viral resistance. This new company will be better placed to meet these challenges and improve access to treatments."
Glaxo sees small near-term EPS hit from HIV deal __LONDON, April 16 (Reuters) - GlaxoSmithKline Plc (GSK.L) said on Thursday its HIV/AIDS deal with Pfizer Inc (PFE.N) would result in marginal near-term earnings per share dilution of approximately 1 to 2 percent in 2010 and 1 percent in 2011.
This dilution would reverse as the two groups' new joint venture company pipeline started to generate sales, it added.
The transaction is expected to be neutral to Pfizer's earnings in 2009 and slightly accretive in 2010 and 2011.
GlaxoSmithKline, Pfizer to Combine HIV Businesses
(WSJ) Drug giants GlaxoSmithKline Plc and Pfizer Inc. said they are combining their HIV-drug businesses into a new company that could be worth as much as 5 billion ($7.5 billion).
The deal marks a rare moment of cooperation between pharmaceutical rivals. Glaxo is a big seller of HIV drugs, but its products are relatively old and aren't growing as much as the company would like. Glaxo's pipeline of HIV drugs in development is also relatively weak. Pfizer has a large pipeline of HIV drugs in development but not many products on the market. The companies hope that by combining their products and research, they will cut costs and create a broader business with better potential for long-term growth.
The combined business had sales of 1.6 billion last year and operating profit of 870 million, the companies said. Analysts typically value such businesses at two to three times sales, which would give the new company a value of roughly 4 billion to 5 billion.
The joint venture is the latest sign of a flurry of deal-making in the pharmaceutical industry, which is trying to cope with a steep drop in revenue from patented products. In a separate move, Pfizer is in the process of combining with Wyeth in a $68 billion deal that will further dilute the contribution of its HIV business to the combined company's results.
For Glaxo, the new deal offers an opportunity to strip out a business that is a drag on its sales growth. Glaxo had HIV sales of 1.5 billion last year, up 5% from 2007. Glaxo's total sales grew 7% to 24.4 billion.
The deal allows Pfizer to increase its stake in the joint venture to 30.5% if enough of its experimental HIV drugs make it to market. If Pfizer's experimental products don't reach the market, Pfizer's share will drop to 9%, the companies said.
The companies said they expect annual, pretax cost savings of up to 60 million from the deal by 2011.
Dominique Limet, currently a senior vice president at Glaxo, will be chief executive of the new joint venture.
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