GlaxoSmithKline has sold a multiple sclerosis drug to rival Novartis for around $1bn.
Novartis will pay an initial $300m for the remaining rights to Ofatumumab having earlier acquired to rights to the treatment for oncology indications. A further $200m will be paid after the start of a phase 3 trial for multiple sclerosis, with another $534m due once a series of milestones are passed.
Glaxo said the payments made as part of the transaction will be counted as core turnover, since they related to the sale of assets in development. Milestone payments will be in addition to its current guidance for this year’s core earnings per share to fall at a percentage rate in the high teens.
The news has sent Glaxo’s shares down 16.5p or more than 1% to £13.54. But David Redfern, chief strategy officer, said:
[This transaction crystallises] significant additional value for GSK shareholders. We continue to focus on progressing our pipeline in core therapy areas including HIV, oncology, vaccines, cardiovascular, immuno-inflammation and respiratory diseases.
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.
