GlaxoSmithKline and Pfizer create spin-off to develop new combination drugs.
GlaxoSmithKline (GSK) and Pfizer plan to merge their HIV drug divisions in an unusual move designed to shore up their poor market positions. The marriage will create a new company, yet to be named, which will use the existing research and market portfolios of the parent companies to develop new combination drugs, the mainstay of HIV treatment.
"The fact that GSK needs a partner reflects its weakness in this market," says Holger Rovini, an analyst at consultancy Datamonitor Healthcare in London. Although London-based GSK has a much greater share of the anti-HIV drug market than Pfizer, its drugs are nearing patent expiration and sales are slowing. Pfizer, based in New York, has a smaller market presence, but owns a healthier pipeline of candidate HIV drugs.
The venture will start with a 19% share of the US$12.3-billion global HIV treatment market and a pool of 17 drug entities — including six new molecules — to trawl for new combinations. It will carry out HIV drug discovery by contracting out from GSK and Pfizer's in-house research and development arms, and will be able to negotiate exclusive rights to any new HIV-related compounds developed by either company. The venture will also be free to seek out its own research and licensing deals from other companies.
A key benefit for the parent companies is that they will share the risk of pipeline drugs failing and get ready access to new compounds. GSK will own 85% of the shares in the new company, with Pfizer taking the remaining 15%. Profits from fruitful combinations would be shared as company stock, with a weighting applied depending on which parent company provided the active compounds.
The new company will be hoping to create a drug combination to rival the blockbuster anti-HIV combination Atripla, created by teaming two drugs made by Gilead Sciences of Foster City, California, with efavirenz, a compound owned by New York-based Bristol–Myers Squibb. Approved by the US Food and Drug Administration in 2006, Atripla marked the first time that anti-HIV drugs owned by different companies had been united into a single product. The combination helped to push Gilead's worldwide sales of HIV drugs to US$4.3 billion last year, almost double GSK's HIV drug sales of $2.4 billion.
The GSK–Pfizer venture reinforces the importance of sharing intellectual property to tackle HIV, says Ellen 't Hoen, a senior adviser on intellectual property at UNITAID, an international drug-purchase facility hosted by the World Health Organization in Geneva, Switzerland. 't Hoen is leading UNITAID's plan to launch a 'patent pool' by the end of this year that would allow multiple companies to license their anti-HIV drugs in return for royalties. This initiative would speed up the development of new antiretroviral combinations, she says, by providing access to a broader range of drugs than the GSK–Pfizer alliance affords.
Last year, Swiss company Roche abandoned its HIV research altogether, but GSK has denied speculation that the new venture is a prelude to its HIV division being sold off. "Both GSK and Pfizer are focused on building a business that has a profitable and sustainable long-term future," says Janet Morgan, director of UK science communications at GSK. "This transaction is about creating a stronger combined business, not about an 'exit strategy'."