Novartis ($NVS) is paying GlaxoSmithKline ($GSK) as much as $1 billion for the rights to a mid-stage multiple sclerosis treatment, betting it can develop an heir to the blockbuster Gilenya, soon to lose patent protection.
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After completion of the transaction announced today, Novartis Pharma will own rights to ofatumumab in all indications. Ofatumumab now joins the Phase III BAF312 in Novartis’ MS pipeline, which also includes secukinumab, an interleukin-17 inhibitor already approved to treat psoriasis.
The FTSE 100-listed drugmaker said Novartis Pharma AG had previously acquired the oncology indications for ofatumumab as part of the three-party transaction that Glaxo and Novartis carried out earlier this year.
The Novartis transaction involved Glaxo trading its oncology franchise for the Swiss company’s vaccines business and forming a joint venture on consumer health care, thereby reducing Glaxo’s reliance on innovative medicines. “We believe GSK’s pipeline has significant potential to drive long-term performance for the Group and will be profiling it further at our R&D event in November”.
“Novartis is pleased to further reinforce our commitment to neuroscience and to add an exciting new treatment to our strong MS portfolio”, David Epstein, head of Novartis Pharmaceuticals, said in a statement. Roche’s drug should reach the market in 2016 as Novartis banks on GlaxoSmithKline plc (ADR) (NYSE:GSK) unveiling ofatumumab not later than two tears after, according to Kepler Cheuvreux analyst Fabian Wenner. GSK will also be eligible for payments of up to $534 million contingent on the achievement of certain other development milestones, taking the total amount of the deal to a little over $1 billion.
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The deal is subject to regulatory conditions and is expected to complete by the end of 2015.
