GlaxoSmithKline PLC GSK to divest ofatumumab - auto-immune indications (7117W)
August 21 2015 - 1:00AM
UK Regulatory
TIDMGSK
RNS Number : 7117W
GlaxoSmithKline PLC
21 August 2015
Issued: Friday 21 August 2015, London UK - LSE announcement
GSK to divest ofatumumab for auto-immune indications to Novartis
for up to $1 billion plus royalties
GlaxoSmithKline plc (LSE/NYSE: GSK) today announced an agreement
with Novartis Pharma AG ("Novartis Pharma"), a subsidiary of
Novartis AG, to divest its rights in ofatumumab for auto-immune
indications, including multiple sclerosis.
Novartis Pharma previously acquired the oncology indications for
ofatumumab (Arzerra) as part of the major three-part transaction
between GSK and Novartis that completed earlier this year. After
completion of the transaction announced today, Novartis Pharma will
own rights to ofatumumab in all indications.
The consideration payable by Novartis Pharma to GSK may reach up
to $1,034 million and comprises a series of milestone payments as
follows:
-- $300 million payable at closing;
-- $200 million payable subject to the start of a phase III
study in relapsing remitting multiple sclerosis by Novartis;
-- further contingent payments of up to $534 million payable on
the achievement of certain other development milestones.
Novartis Pharma will also pay royalties of up to 12 per cent to
GSK on any future net sales of ofatumumab in auto-immune
indications.
David Redfern, Chief Strategy Officer at GSK, said: "We are
pleased to have completed this transaction to divest the remaining
rights in ofatumumab, crystallising significant additional value
for GSK shareholders. We continue to focus on progressing our
pipeline in core therapy areas including HIV, oncology, vaccines,
cardiovascular, immuno-inflammation and respiratory diseases. We
believe GSK's pipeline has significant potential to drive long-term
performance for the Group and will be profiling it further at our
R&D event in November."
This agreement with Novartis Pharma is subject to the expiry of
any waiting period under the US Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and other customary closing conditions.
The transaction is expected to complete by the end of 2015.
As this transaction relates to the divestment of assets in
development, payments made to GSK as part of the transaction will
be recorded as core turnover. Any milestone payments received by
the Group in 2015 will be incremental to the company's current
guidance for the year for core EPS to decline at a high teen
percentage rate (CER).
Novartis Pharma is deemed, under Listing Rule 11.1.4R, to be a
related party of GSK as a result of holdings of the Novartis group
in GlaxoSmithKline Consumer Healthcare Holdings Limited.
The divestment is a smaller related party transaction under
Listing Rule 11.1.10R (1) and has been agreed following a
confirmation from GSK's sponsor that the terms of the sale are fair
and reasonable as far as GSK's shareholders are concerned.
GSK - one of the world's leading research-based pharmaceutical
and healthcare companies - is committed to improving the quality of
human life by enabling people to do more, feel better and live
longer. For further information please visit www.gsk.com.
GSK enquiries:
UK Media enquiries: David Mawdsley +44 (0) 20 (London)
8047 5502
Simon Steel +44 (0) 20 (London)
8047 5502
David Daley +44 (0) 20 (London)
8047 5502
US Media enquiries: Sarah Alspach +1 202 715 (Washington,
1048 DC)
Sarah Spencer +1 215 751 (Philadelphia)
3335
Jenni Ligday +1 202 715 (Washington,
1049 DC)
Analyst/Investor Ziba Shamsi +44 (0) 20 (London)
enquiries: 8047 5543
Tom Curry + 1 215 751 (Philadelphia)
5419
Gary Davies +44 (0) 20 (London)
8047 5503
James Dodwell +44 (0) 20 (London)
8047 2406
Jeff McLaughlin +1 215 751 (Philadelphia)
7002
Cautionary statement regarding forward-looking
statements
GSK cautions investors that any forward-looking
statements or projections made by GSK, including
those made in this announcement, are subject
to risks and uncertainties that may cause actual
results to differ materially from those projected.
Such factors include, but are not limited to,
those described under Item 3.D 'Risk factors'
in the company's Annual Report on Form 20-F for
2014.
Registered in England & Wales:
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Registered Office:
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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