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Shionogi and ViiV strike new HIV deal

Published on 30/10/12 at 10:52am
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HIV specialist firm ViiV Healthcare has announced a new deal with Japan’s Shionogi on a promising new treatment.

ViiV Healthcare was established in 2009 as a joint venture between GlaxoSmithKline and Pfizer, with GSK holding an 85% stake and Pfizer taking a 15% share.

Now Shionogi will gain a 10% share in ViiV in exchange for handing over rights to the drug, integrase inhibitor dolutegravir and other early-stage drugs in the same class.

Dolutegravir is a single pill which is aimed at replacing the current triple-drug combination Atripla in treating treatment-naïve HIV patients. Gilead’s Atripla currently earns around $3 billion in annual revenues, and analysts think dolutegravir’s more convenient dosing could help it earn $5 billion a year in peak sales.

Shionogi will also receive royalty on net sales of the integrase inhibitor portfolio averaging in the high teens. For a defined period post-launch, as the franchise is becoming established, the royalty applies to sales above certain minimum thresholds; after that period, the royalty applies to all sales. 

Shionogi will have representation on the ViiV board, and will, for a defined period, continue to have ongoing involvement in formulating the development and commercialisation plans for the integrase inhibitor portfolio.

The companies say the new deal will help them advance the integrase inhibitor portfolio most effectively and efficiently, while maximising the potential long-term value of the assets.  By acquiring full rights to the integrase inhibitor portfolio, ViiV will be able to streamline R&D and commercial operations in order to maximise sales growth and shareholder returns. 

In addition to the direct benefits of the deal, Shinogi says it will also allow it to release financial, operational, and R&D resources to support its other pipeline products.

The new arrangement will see GSK hold 76.5 per cent, Pfizer: 13.5% and Shionogi: 10 per cent. Should dolutegravir be approved in the US and EU, GSK would be entitled to 1.8% additional equity. This will be an adjustment between GSK and Pfizer and will not dilute Shionogi.

David Redfern, chairman of the Board, ViiV Healthcare stated: “The Shinogi-ViiV Healthcare joint venture has been extremely productive, with the first integrase inhibitor, dolutegravir, scheduled to commence filings before the end of the year. Both ViiV Healthcare and Shinogi believe that now is the right time to simplify and evolve their existing arrangement.  In doing so, we will deepen the relationship as shareholders and at Board level. We will also unlock synergies through simplifying processes and avoiding duplication. We believe this new agreement will create long-term value for ViiV Healthcare and its shareholders.”

The new three-way partnerships builds on the original premise of ViiV, which was to overcome the R&D and commercial problems of discovering new HIV treatments. New advances in the field, where much treatment is now genericised, have become harder and harder to achieve. Pooling resources helps the companies remain in the high profile and ethically important field – which could also prove lucrative if the combination pays off.

Dr Dominique Limet, chief executive of ViiV said: “Our key priority when we established ViiV Healthcare was to build a successful and sustainable business to deliver advances in treatment and care for people living with HIV and today’s agreement is a crucial milestone in delivering on that commitment.”

Isao Teshirogi, president and chief executive of Shionogi stated: “The new deal perfectly aligns with the strategic goals and capabilities of both companies. Shionogi are able to secure a continued revenue stream from the integrase inhibitor portfolio as well as a stake in ViiV Healthcare itself, and will be able to contribute to the future direction of these compounds which we know very well and continue to be excited about.

“In parallel, we now have increased flexibility in our ability to dedicate resources to the global development of our internal development pipeline.”

Andrew McConaghie

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