GSK, Pfizer to merge HIV businesses into a new company

17 April 2009

GlaxoSmithKline plc and Pfizer Inc, two of the world's biggest pharmaceutical companies, will combine their HIV drugs businesses into a new company, GSK has said.

The new HIV-focused company will sell the 11 existing drugs produced by the two firms and also undertake research and development of new HIV drugs and formulations, including the six new drugs already in the pipeline, GSK said in a statement.

The new company will do contract research for GSK and Pfizer and also invest in HIV-related R&D activities at GSK and Pfizer, as per the alliance agreement. The new firm will also have exclusive rights of first negotiation on all products.

The two companies together hold a fifth of the global market for HIV drugs, with annual sales of about 1.6 billion pounds (1.8 billion euros, $2.4 billion), UK-based GSK said.

The new company will initially be controlled 85 per cent by GSK and 15 per cent by Pfizer. The deal will marginally dilute GSK earnings in the first two years but will benefit GSK shareholders in the longer term, group CEO Andrew Witty said.

The company will be restructured  with the achievement of specific sales and regulatory milestones, he added.