ViiV Healthcare, Shionogi amend HIV drug deal, giving GlaxoSmithKline greater interest in dolutegravir

GlaxoSmithKline and Pfizer's joint venture ViiV Healthcare announced Monday the amendment of its agreement with Shionogi covering the experimental HIV drug dolutegravir and other early-stage integrase inhibitors. Under the deal, ViiV will gain exclusive global rights to all assets previously shared with Shionogi.

The companies noted that in return, Shionogi will take a 10 percent stake in ViiV and will gain a seat on the joint venture's board. GlaxoSmithKline chief strategy officer David Redfern said that the revised agreement will give the company an economic interest of between 60 percent and 66 percent in dolutegravir. Through the earlier deal, where income from the drug would have been shared equally between ViiV and Shionogi, analysts estimated that this would have given GlaxoSmithKline approximately a 40 percent interest in dolutegravir, after taking account of Pfizer's minority stake.

"It's an affirmation of our belief in dolutegravir as a potential important medicine in HIV," Redfern remarked, adding "we're taking in house, in this case through ViiV, what we deem to be an important growth asset." Redfern indicated that the revised partnership is expected to dilute GlaxoSmithKline's earnings by around 1 pence a share in 2013 and 2014 but should boost earnings thereafter. After the deal, GlaxoSmithKline will hold a 76.5 percent in the ViiV venture, while Pfizer will hold 13.5 percent.

ViiV and Shionogi recently announced that all late-stage data to support marketing applications for dolutegravir in adults infected with HIV are in house, with filings expected to be made before the end of 2012. Under the new agreement, Shionogi is eligible to receive sales royalties of between 15 percent and 19 percent on dolutegravir, if approved, and future related products.

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