GSK, BMS Ink $1.5 Billion HIV Drug Deal

GlaxoSmithKline’s global HIV business, ViiV Healthcare, has reached two separate agreements with Bristol-Myers Squibb, one to acquire its late-stage HIV R&D assets and a second to acquire Bristol-Myers Squibb's portfolio of preclinical and discovery stage HIV research assets. The late-stage asset purchase comprises an upfront payment of $317 million, followed by development and first commercial sale milestones of up to $518 million and tiered royalties on sales. The purchase of preclinical and discovery stage research assets comprises an upfront payment of $33 million, followed by development and first commercial sales milestones of up to $587 million, and further consideration contingent on future sales performance. Once products are approved and commercialized, ViiV Healthcare will pay tiered royalties. Additionally, ViiV Healthcare will pay sales-based milestone payments of up to $750 million for each of the clinical assets and up to $700 million for each of the discovery and pre-clinical programs.

Under the terms agreed in the two transactions, ViiV Healthcare will acquire: late-stage assets, including fostemsavir (BMS-663068), an attachment inhibitor, currently in Phase III development for heavily treatment experienced patients. Fostemsavir has received a breakthrough therapy designation from the US Food and Drug Administration and is expected to be filed for regulatory approval in 2018. The second late=stage asset is a maturation inhibitor (BMS-955176), currently in Phase IIb development for both treatment-naive and treatment experienced patients. A back-up maturation inhibitor candidate (BMS-986173) is also included in the purchase.

Assets in preclinical and discovery phases of development including a novel biologic (BMS-986197) with a triple mechanism of action, a further maturation inhibitor, an allosteric integrase inhibitor, and a capsid inhibitor. Approximately twenty Bristol-Myers Squibb employees are being offered the opportunity to transfer to ViiV Healthcare.

Established in 2009, ViiV Healthcare is a specialist global HIV company, majority owned by GSK, with Pfizer and Shionogi as other shareholders.

These transactions are consistent with the evolution of Bristol-Myers Squibb's strategic focus, including the decision to discontinue its discovery efforts in virology announced in June 2015.

Completion of the deal is expected during the first half of 2016, subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

ViiV Healthcare will manage and resource the acquired development programs and Bristol-Myers Squibb will continue to provide, at ViiV Healthcare's expense, certain research and development support during a transitional period.

The agreements with ViiV Healthcare do not impact Bristol-Myers Squibb's marketed HIV medicines, including Reyataz, Evotaz, Sustiva and Atripla.

Source: GlaxoSmithKline and Bristol-Myers Squibb

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