[Ip-health] GlaxoSmithKline, Pfizer Formally Launch ViiV Healthcare

[Temina Madon]

GlaxoSmithKline, Pfizer Formally Launch Company To Develop New HIV
Treatments
Tuesday, November 03, 2009
http://globalhealth.kff.org/Daily-Reports/2009/November/03/GH-110309-
GSK-Pfizer.aspx

Pharmaceutical companies GlaxoSmithKline (GSK) and Pfizer on Tuesday
formally launched ViiV Healthcare, a company focused on the
development of new HIV treatments, Dow Jones Newswires/SmartMoney.com
reports (11/3).

"GSK was at the forefront of breakthroughs in HIV and AIDS treatments
in the late 1980s and 1990s with anti-virals such as Retrovir, Epivir
and Combivir, which slow the effects of the illness. However, new
innovations have proved difficult to find despite the virus still
killing 5,000 people every day," the Telegraph reports. "The deal
will Pfizer allows the research and development of potential new
drugs while also meeting investors' concerns by sharing the risk."

The Telegraph continues, "AIDS charities have welcomed the link-up
but said it was 'essential' that the dilution of competition does not
drive up prices and lead to a 'disinvestment' of R&D in the long
term." The article includes details about the increasing pressure GSK
has been under by AIDS charities to create a patent pool of HIV
treatments in order to drive treatment costs down (Ruddick, 10/31).

Reuters/Forbes examines how the "pooling" of the companies' HIV/AIDS
businesses may lead to new directions in HIV research. "Our intent is
to look at what we can do with the portfolio we get from Pfizer and
Glaxo to build new combinations which will completely transform the
way we treat HIV," said Dominique Limet, chief executive of ViiV
Healthcare (Hirschler, 11/3).


Reuters INTERVIEW-New Glaxo, Pfizer company battles Gilead in HIV
11.03.09, 3:00 AM ET
United Kingdom - By Ben Hirschler

LONDON, Nov 3 (Reuters) - GlaxoSmithKline, working alongside Pfizer
in an unusual collaboration, aims to regain pole position in the HIV
drugs market after being outflanked by Californian upstart Gilead.

The two drugmakers are pooling their HIV/AIDS businesses into a new
company majority-owned by Glaxo called ViiV Healthcare, which was
formally launched on Tuesday.

The tie-up, first announced in April, should reinvigorate sales in a
"challenging" market sector, said Dominique Limet, the former Glaxo
head of personalised medicine who has been appointed chief executive
of the new company.

Some drugmakers, including Roche of Switzerland, have stopped
researching new HIV drugs in the face of growing pricing pressures
and the difficulties of coming up with commercially viable new
medicines.

Glaxo has been struggling. Although its scientists developed the
world's first AIDS drug -- AZT -- the British group's products are
relatively old and have been losing ground to Gilead's newer and more
convenient tablets.

Pfizer is a much smaller player in HIV but it has a relatively young
portfolio, including the novel drug Selzentry.

"Selzentry will be a key driver and lever for our growth," It will
allow us to maintain our competitiveness and stabilise, hopefully,
over time our market share in front of Gilead," Limet told Reuters.

With pro forma sales last year of 1.6 billion pounds ($2.6 billion),
ViiV has a 19 percent share of the global HIV drugs market, while
Gilead has 31 percent.

Closing that gap will take a new drive to develop drugs that better
address the needs of patients with HIV -- a condition that has
changed from a life-threatening illness into a chronic disease thanks
to advances in treatment.

NEW DRUG COMBINATIONS
Yet while HIV therapy has come a long way, even people in developed
countries with access to the best care live, on average, 10 years
less than those without the virus.

"Our intent is to look at what we can do with the portfolio we get
from Pfizer and Glaxo to build new combinations which will completely
transform the way we treat HIV," Limet said.

By collaborating in this tricky area of medicine Glaxo and Pfizer
believe they can trim costs, improve research and increase their
combined sales reach.

ViiV has 10 marketed medicines and seven in development, including
five in mid-stage Phase II clinical trials.

Glaxo is the dominant partner in ViiV, reflecting its stronger market
position, and has an initial 85 percent stake in the new group, while
Pfizer holds 15 percent.

The British-based drugmaker's stake could rise to as high as 91
percent or fall to as low as 69.5 percent, depending on the success
of drugs from the two contributing businesses in development.

For the time being there are no plans to spin off ViiV completely and
the group's dedicated staff of around 500 staff will work closely
with employees inside Glaxo and Pfizer, who will provide R&D and
manufacturing services.

In the long term, though, industry analysts believe a flotation could
make sense for a company that might be worth $7.5 billion, assuming a
valuation of three times sales.

"We have to combine two portfolios, set up the right strategy for
developing new (drug) combinations, become more attractive -- then it
will be up to the shareholders to decide what to do next," Limet
said. ($1=3D.6110 pounds) (Editing by Greg Mahlich)


Telegraph
Glaxo-Pfizer tie-up opens new era in Aids battle
By Graham Ruddick, City Reporter
Published: 7:35PM GMT 31 Oct 2009

GlaxoSmithKline (GSK) will herald the beginning of a new era in the
fight against HIV and Aids this week when it launches a new company
with Pfizer.

The historic tie-up with its American rival involves 11 products with
global sales of =A31.6bn pooled into one London-based company.

Dominique Limet, head of personalised medicine strategy at GSK, will
take charge of the business and on Tuesday morning will unveil his
strategic priorities and vision.

GSK was at the forefront of breakthroughs in HIV and Aids treatments
in the late 1980s and 1990s with anti-virals such as Retrovir, Epivir
and Combivir, which slow the effects of the illness. However, new
innovations have proved difficult to find despite the virus still
killing 5,000 people every day.

The deal will Pfizer allows the research and development of potential
new drugs while also meeting investors' concerns by sharing the risk.
The new company will be funded with =A3250m of working capital. Aids
charities have welcomed the link-up but said it was "essential" that
the dilution of competition does not drive up prices and lead to a
"disinvestment" of R&D in the long term.

Mr Limet is expected to deal with such issues on Tuesday, as well as
announcing the name of the company. Julian Heslop, the GSK finance
director, is acting as chairman.

When the agreement was initially announced in April, Andrew Witty,
the GSK chief executive, said it "absolutely restates GSK's ambition
to be a leader in this field".

He added: "To be blunt, I think one of the finest qualities of the
pharmaceutical industry is the transformation of an incredibly
frightening, infectious disease into something which is, to some
large degree, manageable. There are many challenges around access and
those are things we have to face up to, which I make no bones about,
and I intend to continue to do that."

GSK has been under pressure to create a patent pool of its HIV
products with Unitaid, the charity which aims to provide access to
cheaper medicines, in order to help the treatment of the illness for
children in Africa. However, GSK has adopted not-for-profit pricing
in developing countries and created a new fund with access to =A350m
for children in Africa. Aspen Pharmacare, in which GSK acquired a
16pc stake in May, has a royalty-free licence to develop a cheaper,
generic version of GSK's HIV treatment Abacavir.

The new GSK/HIV company will take 19pc of the global market share.
This will be behind market leader Gilead, the fast-growing US group
which has combined medicines into a single pill.

GSK will hold 85pc of the equity and Pfizer 15pc, although this could
increase to 30.5pc depending on the success of six drugs in the US
company's pipeline.

The scale and co-operation involved in the deal is unique in the
pharmaceutical industry. Pfizer is the biggest drug company in the
world and GSK the third.

The HIV market is worth $12bn (=A37.36bn) globally and is expected to
grow 10pc a year until the end of 2012. GSK's HIV products represent
7pc of its annual =A320.3bn of sales.

Analysts gave the deal a positive reception because it combines GSK's
ageing drug portfolio, which includes many drugs set to lose patent
protection, with Pfizer's young and developing portfolio, which
includes new treatment Selzentry. The partnership has been secured as
the companies seek to overcome some of their leading products coming
off patent and facing generic competition.

Pfizer has chosen to meet that challenge by acquiring rival Wyeth in
a $68bn deal.However, Mr Witty has shunned mega mergers in favour of
a series of bolt-on acquisitions and partnerships. For example, GSK
acquired skincare specialist Stiefel for $3.6bn.

When he presented third- quarter results last week, Mr Witty said the
"dynamics of GSK's business are changing". Less than 30pc of sales
came from the "white pill/Western markets" compared to 38pc in the
third quarter last year.

The company is diversifying away from a focus on blockbuster drugs
and seeking to fund R&D in different ways, such as linking up with
Pfizer.