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im not sure £250m will be enough for ATC!little fatties will be...

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    im not sure £250m will be enough for ATC!
    little fatties will be driving a nice car this xmas!


    Glaxo-Pfizer tie-up opens new era in Aids battle
    GlaxoSmithKline (GSK) will herald the beginning of a new era in the fight against HIV and Aids this week when it launches a new company with Pfizer.


    By Graham Ruddick, City Reporter
    Published: 7:35PM GMT 31 Oct 2009

    GlaxoSmithKline

    The historic tie-up with its American rival involves 11 products with global sales of £1.6bn pooled into one London-based company.

    Dominique Limet, head of personalised medicine strategy at GSK, will take charge of the business and on Tuesday morning will unveil his strategic priorities and vision.

    GSK was at the forefront of breakthroughs in HIV and Aids treatments in the late 1980s and 1990s with anti-virals such as Retrovir, Epivir and Combivir, which slow the effects of the illness. However, new innovations have proved difficult to find despite the virus still killing 5,000 people every day.

    The deal will Pfizer allows the research and development of potential new drugs while also meeting investors' concerns by sharing the risk. The new company will be funded with £250m of working capital. Aids charities have welcomed the link-up but said it was "essential" that the dilution of competition does not drive up prices and lead to a "disinvestment" of R&D in the long term.

    Mr Limet is expected to deal with such issues on Tuesday, as well as announcing the name of the company. Julian Heslop, the GSK finance director, is acting as chairman.

    When the agreement was initially announced in April, Andrew Witty, the GSK chief executive, said it "absolutely restates GSK's ambition to be a leader in this field".

    He added: "To be blunt, I think one of the finest qualities of the pharmaceutical industry is the transformation of an incredibly frightening, infectious disease into something which is, to some large degree, manageable. There are many challenges around access and those are things we have to face up to, which I make no bones about, and I intend to continue to do that."

    GSK has been under pressure to create a patent pool of its HIV products with Unitaid, the charity which aims to provide access to cheaper medicines, in order to help the treatment of the illness for children in Africa. However, GSK has adopted not-for-profit pricing in developing countries and created a new fund with access to £50m for children in Africa. Aspen Pharmacare, in which GSK acquired a 16pc stake in May, has a royalty-free licence to develop a cheaper, generic version of GSK's HIV treatment Abacavir.

    The new GSK/HIV company will take 19pc of the global market share. This will be behind market leader Gilead, the fast-growing US group which has combined medicines into a single pill.

    GSK will hold 85pc of the equity and Pfizer 15pc, although this could increase to 30.5pc depending on the success of six drugs in the US company's pipeline.

    The scale and co-operation involved in the deal is unique in the pharmaceutical industry. Pfizer is the biggest drug company in the world and GSK the third.

    The HIV market is worth $12bn (£7.36bn) globally and is expected to grow 10pc a year until the end of 2012. GSK's HIV products represent 7pc of its annual £20.3bn of sales.

    Analysts gave the deal a positive reception because it combines GSK's ageing drug portfolio, which includes many drugs set to lose patent protection, with Pfizer's young and developing portfolio, which includes new treatment Selzentry. The partnership has been secured as the companies seek to overcome some of their leading products coming off patent and facing generic competition.

    Pfizer has chosen to meet that challenge by acquiring rival Wyeth in a $68bn deal.However, Mr Witty has shunned mega mergers in favour of a series of bolt-on acquisitions and partnerships. For example, GSK acquired skincare specialist Stiefel for $3.6bn.

    When he presented third- quarter results last week, Mr Witty said the "dynamics of GSK's business are changing". Less than 30pc of sales came from the "white pill/Western markets" compared to 38pc in the third quarter last year.

    The company is diversifying away from a focus on blockbuster drugs and seeking to fund R&D in different ways, such as linking up with Pfizer.
 
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