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| Glaxo, Pfizer to merge HIV drug units in challenge to Gilead |
| Bloomberg / London Apr 18, 2009, 00:56 IST |
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GlaxoSmithKline Plc, once the world’s biggest maker of AIDS drugs, will form a new company with rival Pfizer Inc to increase its share of the $12.3 billion HIV market now dominated by Gilead Sciences Inc.
Glaxo’s sales and research experience will be combined with Pfizer’s pipeline to give the new company control of almost 20 per cent of the market for treating the deadly virus. The new company will have 11 drugs and 6 experimental compounds, the companies said today in a statement.
London-based Glaxo, which sells Combivir and Epzicom for HIV, made history in 1987 when its predecessor company, Burroughs Wellcome, developed a drug that stopped the virus from replicating in cells. The British drugmaker has since lost ground to Gilead after the Foster City, California-based company invented therapies that combine medicines in a single pill, making treatment more convenient for patients who take multiple drugs each day to fight the AIDS virus.
“We continue expect Gilead to remain a step ahead of the competition and view the new company as another example of a pharma merger driven by weakness,” M Ian Somaiya, an analyst at Thomas Weisel Partners, wrote in a note to clients.
Gilead products made up the bulk of the $7.2 billion in US sales of AIDS drugs last year. The world’s top-selling AIDS treatment, Gilead’s two-drug combination pill Truvada, had a 33 per cent revenue increase last year to $2.11 billion. The company’s Atripla, a pill mixing three medicines, rose 74 per cent to $1.57 billion. Combivir had global sales of 433 million pounds ($645 million) last year, while Epzicom revenue was 442 million pounds.
Combivir and Epzicom “are suboptimal compared to Gilead’s combination pill Truvada and in our opinion will be relegated to alternate status irrespective of which drugs they are combined with,” Somaiya said.
Glaxo’s shares rose 11 pence, or 1.1 per cent, to 1,035 pence in London trading. The stock has dropped 19 per cent this year. Pfizer fell 12 cents, or 0.9 per cent, to $13.74 at 11.37 am in New York Stock Exchange composite trading. Gilead fell 3 cents to $44.51 on the Nasdaq Stock Market.
An estimated 33 million people were living with HIV last year, according to UNAIDS, which coordinates the United Nations’ response to the disease.
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