GSK share price in focus as pharmco sells auto-immune drug

This deal gives the company the rest of the rights to this treatment, which is under development to treat relapsing multiple sclerosis and other types of autoimmune conditions.

GlaxoSmithKline PLC on Friday said it has signed an agreement with a subsidiary of Swiss peer Novartis AG to sell its rights to ofatumumab for auto-immune indications, including multiple sclerosis.

Novartis would pay GSK $300 million up front to buy the compound and another $200 million would be payable after the start of a phase III study in MS by Novartis. It would then make payments up to as much as $534 million over that, but that depends on whether targets in development are reached.

The deal follows the completion of the three-way multibillion dollar transaction between GSK and Novartis, which saw the two pharma giants swap certain assets and create a joint venture in consumer healthcare.

Novartis will also pay royalties of as much as 12 percent to Glaxo on any future net sales of ofatumumab for autoimmune conditions.

Novartis’ MS portfolio also includes the strong-selling Gilenya (fingolimod), investigational treatments BAF312 and CJM112, and Glatopa – a generic version of Teva’s Copaxone (glatiramer acetate).

“We continue to focus on progressing our pipeline in core therapy areas including HIV, oncology, vaccines, cardiovascular, immuno-inflammation and respiratory diseases”, Redfern said in a statement.

Novartis already has an MS treatment called Gilenya, which was the company’s second-biggest seller a year ago , with sales of $2.5 billion. Novartis had previously bought the rights to the drug as a cancer treatment, for which it is marketed as Arzerra.

The drug would compete with Roche’s experimental medicine ocrelizumab, which succeeded in reducing the relapses and disability progression associated with multiple sclerosis in two late-stage studies announced in June.

Both companies said that they expected the deal to be completed before the end of 2015.

Others have been criticized for the high prices of new medications as well.