Sector News

EU clears plans by drugmakers GSK and Novartis to trade assets

January 29, 2015
Life sciences
(Reuters) – The European Commission on Wednesday approved a plan by Novartis (NOVN.VX) and GlaxoSmithKline (GSK.L) to trade more than $20 billion worth of assets, part of a reshaping of the drug industry at a time of healthcare spending cuts and more competition.
 
The companies agreed last April to the transaction that includes GSK buying Novartis’ vaccines business, Novartis purchasing GSK’s cancer drugs, and the two groups tying up in consumer healthcare.
 
The Swiss drugmaker will buy London-based GSK’s oncology products for $14.5 billion plus another $1.5 billion that depends on the results of a trial in melanoma.
 
The Commission said its approval was conditional on the divestment of two of Novartis’s cancer treatments – LGX818, a B-Raf inhibitor, and MEK162, an MEK inhibitor.
 
B-Raf inhibitors and MEK inhibitors are therapies that block cell proliferation, responsible for tumour growth and progression, and can be used to treat a number of different cancers.
 
The Commission said it had concerns that the transaction would have reduced competition and innovation for these products, but that the commitments address these concerns.
 
GSK is buying Novartis’ vaccines, excluding influenza, for $5.25 billion plus potential milestone payments of up to $1.8 billion and ongoing royalties. The companies also will form a joint venture in consumer healthcare.
 
“The decision is conditional upon the divestiture of assets in the vaccines and consumer health businesses,” the Commission, which acts as the EU’s anti-trust watchdog, said in a statement.
 
GSK has committed to divest one meningitis vaccine, grant a worldwide licence of another and offer further concessions in Germany and Italy, the Commission said.
 
The Commission had concerns the deal would hurt competition on developing meningitis and diphtheria tetanus vaccines, as well as products to stop smoking and to treat colds and pain.
 
GSK said that in Europe and Turkey, it had agreed to sell its NiQuitin products that help stop smoking and its Coldrex cold and flu products. In Sweden, it would sell its Panodil pain management, as well as its Nezeril/Nasin cold and flu products.
 
Novartis will sell its cold sore business in Europe.
 
GSK said it planned to complete the transactions with Novartis during the first six months of this year.
 
(Reporting by Philip Blenkinsop and Robin Emmott, editing by David Evans)

Join the discussion!

Your email address will not be published. Required fields are marked *

Related News

November 22, 2020

Belgium is ‘European biotech leader’ for 3rd year in a row

Life sciences

Belgian companies account for just under a quarter (24%) of the total stock market value of all public biotech companies in Europe.

November 22, 2020

J&J, following BMS, pledges $100M to address racism and health inequities

Life sciences

Johnson & Johnson is re-upping its commitment to addressing health inequities as the pandemic lays bare long-standing divisions.

November 22, 2020

Sanofi sponsors Parkinson’s Foundation’s genetic study with $1M for free testing

Life sciences

It’s estimated that 10% to 15% of people with Parkinson’s have a genetic form of the disease and Sanofi Genzyme is backing a new study to help find those people.

Send this to a friend