The partners made the announcement Thursday morning before markets opened in New York.
The deal allows the two companies to merge their strengths in the HIV drugs business - Glaxo is a big seller of HIV treatments but its products are relatively old and its pipeline of future drugs is also relatively weak. Pfizer, on the other hand, has a significant store of drugs in development but few products on the market.
“Today marks a definitive step by GSK to renew our focus and deliver more medicines, more efficiently, to people living with HIV/AIDS,” said GSK Chief Executive Officer Andrew Witty. “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. HIV remains a global threat with increasing incidence and viral resistance. This new company will be better placed to meet these challenges and improve access to treatments.”
London-based Glaxo, which maintains its U.S. headquarters in Research Triangle Park and employs some 5,000 people in the Triangle area, will initially hold an 85 percent equity interest in the new company, with New York-based Pfizer holding the remaining 15 percent.
The two companies said that the new business "will be more sustainable and broader in scope than either company's individually," adding that it will hold a 19 percent share of the growing market.
The new company will have a broad product portfolio of 11 marketed products including market-leading therapies such as Combivir, Kivexa and Selzentry/Celsentri. Based on 2008 results, the combined portfolio generates sales of around 1.6 billion pounds ($2.4 billion).
The companies said revenues at that level will provide the new company with financial stability and support investment in its pipeline.
"By combining Pfizer's and GlaxoSmithKline'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," said Pfizer Chief Executive Officer Jeff Kindler in a joint statement issued to the London Stock Exchange.
"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," Kindler added.
The company will have a pipeline of 6 innovative and targeted medicines, including 4 compounds in phase II development. Altogether, the new company will have 17 molecules at its disposal to develop in fixed-dose combinations as possible new HIV treatments.
The new company will contract research and development services directly from Glaxo and Pfizer to develop new medicines.
GSK’s Dominique Limet will be the CEO of the new venture. He currently is senior vice president and head of GSK’s Personalized Medicine Strategy.
Other board members of the new venture are:
- Julian Heslop, chief financial officer, GSK and chairman of the new HIV company
- Cees Heiman, regional president, Specialty Care Business Unit, Europe, Pfizer
- Zhi Hong, SVP and head of Infectious Diseases CEDD, GSK
- Abbas Hussain, president Emerging Markets, GSK
- Duncan Learmouth, SVP Corporate Communications & Community Partnerships, GSK
- Martin Mackay, president, Global Research & Development, Pfizer
- Ian McCubbin, SVP Strategy, Logistics and External Supply, GSK
- Ellen Strahlman, SVP and Chief Medical Officer, GSK