By setting up the HIV focused company, which is yet to be named, GlaxoSmithKline (GSK) and Pfizer are hoping to realise savings and help their businesses prosper in a therapeutic area with scientific and pricing difficulties.
GSK’s CEO Andrew Witty, a vocal mega-merger sceptic, said that the business model of the HIV company could apply elsewhere, suggesting further collaborations are a possibility.
The idea is that by sharing the risks and development costs and uniting the companies’ respective portfolios Big Pharma could economically pursue otherwise costly or niche therapeutic areas.
Jeff Kindler, CEO of Pfizer, said: “By combining Pfizer’s and GSK’s complementary strengths and capabilities, we are creating a new global leader in HIV and reaffirming our ongoing commitment to the treatment of the disease.
“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.”
Details of the business model
GSK will initially control 85 per cent of the company, although this could shift to between 69.5 per cent and 91 per cent depending on what milestones are achieved, and is expecting to realise savings of £60m ($89m) a year by 2011.
The combined company will have a portfolio of 11 marketed products, including Pfizer’s recently launched Selzentry (maraviroc) that could benefit from GSK’s distribution network and achieve greater sales.
In addition the company will have a pipeline of six medicines in clinical development, four of which are in Phase II, a 19 per cent share of the HIV market and gross assets of £250m.