GSK To Divest Two Vaccines to Bavarian Nordic for $1 Billion-Plus
GlaxoSmithKline (GSK) is divesting its two vaccines to Bavarian Nordic, a Kvistgaard, Denmark-based company, in a deal worth more than $1 billion.
The two vaccines being divested are Rabavert/Rabipur for preventing rabies and Encepur for precenting tick-borne encephalitis. GSK had acquired these brands from Novartis in 2015 as part of its acquisition of Novartis’ vaccines business (excluding influenza vaccines). GSK says it is divesting the brands to increase its focus in its vaccines business by reinvesting in growth assets, innovation, and a simplified supply chain.
Under the deal, GSK will receive an upfront payment of approximately EUR 301 million ($336 million), milestone payments of EUR 495 million ($552 million) and additional proceeds from the sale of inventory over the course of the supply arrangements for a total consideration of up to EUR 955 million ($1 billion).
The value of inventory at the anticipated closing date is estimated to be EUR 159 million ($177 million). EUR 25 million ($28 million) of the total consideration is conditional upon future sales performance of the two vaccines. Milestones are payable upon successful technology transfer, marketing-authorization transfers, and the fulfilment of GSK’s supply commitments until Bavarian Nordic obtains regulatory approval to manufacture the vaccines.
GSK says both vaccines will continue to be manufactured primarily at GSK’s site in Marburg, Germany until full production is transferred to Bavarian Nordic. The staged technology transfer is expected to begin in the first quarter of 2020 with completion anticipated within five years.
No employees or manufacturing facilities are being transferred as part of this transaction. The transaction is expected to close by the end of 2019 and is conditional upon antitrust approval as well as approval of Bavarian Nordic’s rights issue by its shareholders.