Pressure: GSK boss Emma Walmsley
GSK has snapped up another pharma business as it shifts focus towards medicines and vaccines ahead of the planned split from its consumer arm.
The FTSE 100 drugs giant agreed to buy Boston-based Affinivax for up to £2.6billion.
Affinivax is developing a vaccine to combat pneumococcal diseases which include pneumonia and meningitis as well as milder illnesses such as sinusitis which can cause headaches and a runny nose.
GSK will pay £1.7billion upfront as well as additional payments worth £954million if the pneumococcal vaccine succeeds in clinical trials. The deal is expected to be completed in the third quarter of this year.
Hal Barron, GSK’s chief scientific officer, said the deal to buy Affinivax ‘further strengthens’ the company’s pipeline of vaccines.
Steven Brugger, boss of Affinivax, said the tie-up would enable ‘continued advances’ for the company’s technology and improve its existing vaccines. GSK shares rose 0.3 per cent, or 4.6p, to 1732.6p following news of the deal.
The purchase is the largest deal for GSK since a three-part transaction in 2014 when it sold its oncology business to Novartis while also buying the Swiss firm’s vaccines division and combining their consumer health segments into a joint venture.
It also follows the acquisition of cancer drug developer Sierra Oncology, which GSK snapped for £1.5billionn in April.
Max Herrmann, healthcare analyst at investment bank Stifel, said the purchase of Affinivax was ‘a decent deal’ and would allow GSK to access the multi-billion pound market for pneumococcal vaccines.
He added it would provide ‘a competitive advantage’ for the firm as it considered ‘the next stage’ of its development pipeline beyond its current best-selling shingles vaccine, Shingrix.
GSK boss Emma Walmsley is preparing to shift the firm’s focus squarely towards medicine after it demerges its consumer health arm next month into a business called Haleon.
She has come under increasing pressure from shareholders, including activist investor Elliott Management, to improve its medicine pipeline and hit growth targets once the split is completed.
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