British drug giant GlaxoSmithKline is joining forces with American rival Pfizer to lock down some 20% of the drug market for HIV/AIDS. That should help put the 2 companies on the map in an area that has been thoroughly dominated in recent years by the rising star, Gilead.
The tie-up calls for GSK to hold 85% of the JV, which will be based in London and be run by Dominique Limet, currently of GSK.
It will have working capital of about $370 million.
The UN estimates that 33 million people worldwide carry HIV.
Raymond James analyst Eric Le Berrigaud was bullish on the move, especially given GSK’s tottering position in this market.
“In having access to Pfizer’s research and development [of AIDS treatment], Glaxo will try to mitigate the downward trend of its HIV/AIDS sales as its patents start expiring over the next five years,” Le Berrigaud told Forbes.
Glaxo’s current sales in HIV/AIDS have topped out at $2.2 billion, but they are likely to drop by 60% or more by 2014 due to patent expirations of old standbys Retrovir, Epivir and Ziagen.
The deal “could perhaps add another half billion [to Glaxo’s sales],” estimated Le Berrigaud.
Gilead has been on a tear in recent years, due to its trio of HIV drugs, all of which leverage tenofovir, which is prescribed in one form or another for 80% of new HIV patients in the US, and nearly that many in the EU.
HHS guidelines recommend that Gilead’s drugs be used as backbone therapy for HIV/AIDS, in part because they can be taken once daily which helps improve compliance.