June 22, 2015
By Alex Keown and Riley McDermid, BioSpace.com Breaking News Staff
LONDON – GlaxoSmithKline is divesting itself of two meningitis drugs to Pfizer Ireland Pharmaceuticals, a subsidiary of Pfizer Inc. , for about $130 million, in order to satisfy antitrust concerns connected with GSK’s acquisition of Novartis AG ’ vaccine business.
As part of the transaction, GSK acquired Novartis’s vaccines business, which included meningitis vaccines Menveo and Bexsero. To satisfy regulatory clearances as part of the transaction, GSK agreed to divest its legacy meningitis vaccines Nimenrix and Mencevax, which are sold outside the United States and achieved combined global sales in 2014 of $53.7 million, the company announced this morning. The sale of the two meningitis drugs is expected to garner $130 million for GlaxoSmithKline.
Nimenrix is a single-dose meningococcal conjugated vaccine designed to protect against Neisseria meningitidis, an uncommon but highly contagious and potentially life-threatening disease. The drug is approved for sale in 61 countries outside of the U.S.
Mencevax is a single-dose meningococcal unconjugated polysaccharide vaccine used to control outbreaks of meningococcal infection and for travelers to countries where the disease is endemic or highly epidemic. The drug is currently approved for sale in 79 countries outside the U.S.
GlaxoSmithKline completed its nearly $20 billion asset swap with Swiss drugmaker Novartis AG (NVS), which will boost its vaccines and consumer healthcare divisions earlier this year. When reporting first quarter earnings today, GSK said it would reduce a planned return to investors by about one-fourth of what was expected from the Novartis deal. The company said it will give shareholders about $1.5 billion in a special dividend in the fourth quarter.
Last year Pfizer acquired two meningitis vaccines, NeisVac-C and Trumenba, to protect against erogroup B meningococcal disease in individuals 10 through 25 years of age, from Baxter International , The Wall Street Journal reported. Susan Silbermann, president of Pfizer Vaccines, told the Journal the acquisition of the two vaccines from GlaxoSmithKline “will allow us to more completely respond to meningococcal disease outbreaks.”
Seeking Alpha reported Pfizer said it does not expect the sale to have a significant impact on its financial predictions for 2015. The sale is expected to be completed later this year.
Glaxo’s stock was up slightly in morning sales today, trading at $43.07.
Pfizer’s stock was trending a little high this morning as well, trading at $34.42.
GlaxoSmithKline’s deal with Pfizer comes on the heels of talks the London-based pharmaceutical company was ripe for acquisition by Roche and Johnson & Johnson . Glaxo has been hampered by lagging sales in Europe and the United States.
Although the company reported a 5 percent growth in emerging markets, sales in Europe were flat and in the U.S. sales were down about 10 percent as the result of formulary and contract changes to asthma drug Advair. Glaxo is under pressure to develop new drugs that aren’t threatened by generics. Rumors were swirling this month that Swiss-based Roche and U.S.-based Johnson & Johnson are eying the U.K. company for approximately $143 billion. Last month there was buzz that Pfizer was considering acquiring Glaxo, a year after it failed to acquire AstraZeneca PLC . Just this month over a third of respondents in a poll conducted by BioSpace believe that AstraZeneca PLC (AZN) could be in the running to acquire struggling GlaxoSmithKline (GSK).
Pfizer was speculated to be considering the deal in order to “unlock access to its balance sheet and improve its tax situation,” according to an analyst following the situation. Gregg Gilbert, a biotech analyst at Deutsche Bank , wrote in a note to investors “Introducing PfizerKline” that he thinks a deal would be “materially accretive” for both companies. Gilbert estimated that a bid priced at $29.86 a share, via half stock and half cash, which would push up Pfizer’s earnings per share by 10 percent to 16 percent beginning in 2016.
While Glaxo has had its share of troubles, the company has had some positive news, including backing the launch of several startup biotech firms, including three announced yesterday. Glaxo and investment firm Avalon Ventures provided $30 million to the three companies to advance their work in developing new treatments for heart disease, cancer and certain genetic disorders.
In March, the United Kingdom officially became the first country in the world to offer a vaccine for meningitis B after to infants covered under its national health system, after reaching a hard-fought deal with GlaxoSmithKline (GSK).
Britain will now be able to offer Glaxo’s Bexsero vaccine, formerly part of Novartis AG (NVS)’ vaccine portfolio under its massive asset swap earlier this year. Neither partner disclosed the cost of the program, but Nikki Yates, general manager of GSK in Britain, said it offered “fair value” to British health regulators.
Under the terms of the new program, children will start receiving Bexsero when they are two months old, followed by two additional “booster” doses. Meningitis causes severe neck pain after a bacterial infection of the lining surrounding the brain and spinal cord begins affecting the immune system.
As Rumors Swirl About GlaxoSmithKline Bid, Who Could Suitors Be?
Rumors are swirling that Swiss-based Roche and U.S.-based Johnson & Johnson are eying the U.K. company for approximately $143 billion. But Roche and J&J aren’t the only companies though who have been thought could go after the elephant that is Glaxo.
Last month there was buzz that Pfizer Inc. was considering acquiring Glaxo, a year after it failed to acquire AstraZeneca PLC . Just this month over a third of respondents in a poll conducted by BioSpace believe that AstraZeneca PLC could be in the running to acquire struggling GlaxoSmithKline (GSK).
So BioSpace wants to ask our readers again what they predict for this new dealmaking bonanza. Will Glaxo go—and if so, to whom?
