GSK to receive upfront payment of approximately EUR301 million (£259m) and milestone payments for a total consideration of up to EUR955 million (£822m).
GlaxoSmithKline plc (LSE/NYSE: GSK) today announced the divestment of travel vaccines Rabipur (tradename Rabavert in the US) for the prevention of rabies, and Encepur for the prevention of tick-borne encephalitis, to Bavarian Nordic.
The decision to divest these brands, acquired from Novartis in 2015 as part of the acquisition of its vaccines business, supports GSK’s strategic intent to increase focus and reinvest in growth assets, innovation and a simplified supply chain in its vaccines business.
Roger Connor, President, Global Vaccines at GSK, said: “This agreement with Bavarian Nordic will enable us to commit greater resources to our key growth assets and to our R&D pipeline, while also ensuring the continued supply of these important and successful vaccines.”
GSK will receive an upfront payment of approximately EUR301 million (£259m) and will also receive milestone payments of EUR495 million and additional proceeds from the sale of inventory over the course of the supply arrangements for a total consideration of up to EUR 955m. The value of inventory at the anticipated closing date is estimated to be EUR 159 million. EUR 25m (£22m) of the total consideration is conditional upon future sales performance of the two vaccines. Milestones are payable upon successful technology transfer, marketing authorisation transfers and the fulfilment of GSK’s supply commitments until Bavarian Nordic obtains regulatory approval to manufacture the vaccines.
To ensure supply continuity both vaccines will continue to be manufactured primarily at GSK’s Marburg site in Germany until full production is transferred to Bavarian Nordic. The staged technology transfer is expected to commence in Q1 2020 with completion anticipated within 5 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 anti-trust approval as well as approval of Bavarian Nordic’s rights issue by its shareholders.
About Rabipur (Tradename Rabavert in US and Canada)
Rabipur is a well-established life-saving vaccine (rabies virus causes acute invariable fatal disease) with 30 years of market experience supported by extensive clinical and safety evidence and WHO pre-qualification. It is indicated both in persons bitten by suspect animals (PEP[1]) and non-immune subjects at risk of rabies (PrEP[2]).
About Encepur
Encepur is indicated for active immunization of high-risk populations against tick-borne encephalitis (TBE). It has unique dosing flexibility supported by proven efficacy and long-term persistence data.
About Bavarian Nordic
Bavarian Nordic is a Denmark-based, fully-integrated biotechnology company specializing in the research, development and manufacture of active cancer immunotherapies and vaccines for infectious diseases.
Cautionary statement regarding forward-looking statements
GSK cautions investors that any forward-looking statements or projections made by GSK, including those made in this announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Such factors include, but are not limited to, those described under Item 3.D 'Principal risks and uncertainties' in the company's Annual Report on Form 20-F for 2018.
References
[1] Post-Exposure Prophylaxis, i.e., after known or possible exposure to rabies virus
[2] Pre-exposure Prophylaxis, i.e., administered before possible exposure to rabies virus
