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New GSK-Pfizer HIV Merged Company
  "One of the goals will be to develop new fixed-dose combination therapies, using existing and novel medicines."
"Witty, who is a sceptic of multimillion-dollar mergers among drugs firms, suggested that the tie-up could be an example of how collaboration could work elsewhere. "It's not necessarily a template but it will apply elsewhere," he said. "This structure is a good example of the way we want to create value and generate efficiency in our business." He pledged that the new company would adopt "enlightened mindsets" towards the pricing and availability of HIV drugs in sub-Saharan Africa and other developing countries."
"The new venture is an attempt by the world's two biggest drug companies to replicate the energy and drive of a small biotech. Witty calls it an opportunity to “create a specialist company…with real independence that will have the flexibility to do other deals and license in other products just as a specialist biotech would." "
"the deal offers access to Pfizer's portfolio of new medicines in clinical development. While Pfizer gets the benefit of GSK's strong marketing in distribution in HIV."
"The move marks a way for the two companies to pool efforts in a therapeutic area with tough scientific challenges that has come under intense pricing pressure and in which they have been outstripped commercially by rivals led byGilead, the US biotech company. Others such as Roche of Switzerland have pulled out of HIV research."
"Andrew Witty, GSK's chief executive, said: "This reinvigorates GSK's presence as one of the largest companies operating in the field [of HIV]"
"Gbola Amusa, pharmaceuticals analyst with UBS, the investment bank, in London, said the move could herald a wave of collaborative transactions leading to company break ups and sales: "We'll look back in a few years and highlight this deal as being industry-shifting." "
"Both companies are facing some pressures in the HIV area," said Morningstar analyst Damien Conover. "(Pfizer's) Selzentry is not doing as well as it probably could if it had more resources behind it ... GSK are getting hit pretty hard from Gilead and Bristol."
"Deutsche Bank analysts said the deal made sense for both sides, with Pfizer's new drug Selzentry filling a gap in Glaxo's portfolio as older compounds come off patent, while Pfizer benefits from Glaxo's greater global HIV distribution."
"The transaction is the latest sign of deal making in the pharmaceutical industry, which is trying to cope with a revenue decline from patented products and difficulties developing new drugs"......"Such arrangements aren't unprecedented, though: In 2007, AstraZeneca PLC and Bristol-Myers Squibb Co. struck a partnership to develop and market two diabetes drugs."

April 16, 2009
GlaxoSmithKline, Pfizer to create HIV company
Last Updated:April 16, 2009 13:57
GlaxoSmithKline and Pfizer announced Thursday that the drugmakers agreed to combine their HIV-drug segments into a new company focused on the research, development and commercialisation of HIV medicines. GlaxoSmithKline CEO Andrew Witty stated that "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."
At the closing of the transaction, expected in the fourth quarter, GlaxoSmithKline will control 85 percent of the joint venture and Pfizer will hold 15 percent. According to the terms of the agreement, Pfizer's interest could rise to as much as 30.5 percent in the event that certain sales and regulatory milestones are achieved. Dominique Limet, head of GlaxoSmithKline's Personalised Medicine Strategy, was appointed CEO designate of the combined entity.
The new company will have 11 marketed products, including Combivir (lamivudine/zidovudine), Epzicom/Kivexa (abacavir/lamivudine), and Selzentry/Celsentri (maraviroc), and will hold a 19-percent share of the HIV market. The company will have 6 drugs in its pipeline, including 4 compounds in mid-stage development, as well as 17 molecules at its disposal to develop in fixed-dose combinations as possible new HIV treatments. Based on 2008 results, sales from the combined portfolio reached 1.6 billion pounds ($2.4 billion).
Commenting further on the deal, Witty remarked that "this is a new and unique way of incentivising research success and deciding how to allocate research and development capital." He said the new company is "going to have two parents out there with, I think, a very rapid decision-making mechanism to allow it to be funded for what it needs to do." The executive also explained that the new venture will not include GlaxoSmithKline's vaccine programme. "Who knows down the road whether or not there would be a commercial collaboration opportunity if and when those vaccines make it to market, but they're not currently scheduled to go into this business," Witty noted.
In response to the news, analyst Navid Malik of Matrix Corporate Capital suggested that "GlaxoSmithKline is looking to consolidate its franchise through this tie-up with Pfizer, who are probably looking to exit HIV." In addition, he suggested that "it's quite a dramatic step, for two rival companies to put their pride aside and work together like this. But if they don't there is a good chance that both their HIV businesses will fade away over time." UBS analyst Gbola Amusa said the agreement could lead to more partnerships that result in company break ups and sales, and speculated that "we'll look back in a few years and highlight this deal as being industry-shifting."
Reference Articles
Glaxo, Pfizer to merge HIV-drug units in new company - (Bloomberg)
GSK and Pfizer create new HIV company - (BusinessWeek)
Glaxo and Pfizer to merge HIV portfolios - (Financial Times)
Glaxo and Pfizer pool AIDS drugs in new company - (Forex)
GlaxoSmithKline and Pfizer announce innovative agreement to create a new world-leading, specialist HIV company - (GlaxoSmithKline)
GSK joins forces with Pfizer to develop HIV/AIDS drugs - (The Guardian)
GlaxoSmithKline, Pfizer to combine HIV businesses (free preview) - (The Wall Street Journal)
Glaxo, Pfizer in HIV-drug unit tie-up: report - (
Glaxo and Pfizer create HIV drug company - (Toronto Star)
GlaxoSmithKline, Pfizer target HIV with new company - (Triangle Business Journal)
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