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GSK to pay up to $2.1B for drug license
Wednesday December 20, 11:39 am ET

British pharmaceutical giant GlaxoSmithKline said late Tuesday it has agreed to pay as much as $2.1 billion for the worldwide license to a late-stage leukemia treatment.

The London-based company, which has dual U.S. headquarters in Research Triangle Park and Philadelphia, signed a deal with Danish biotechnology concern Genmab A/S to co-develop and commercialize HuMax-CD20, a fully human antibody used to fight chronic lymphocytic leukemia, the most common form of leukemia in adults in the United States. CLL is a sub-group of non-Hodgkins lymphoma.

HuMax-CD20 is also undergoing phase II clinical trials as a treatment for rheumatoid arthritis.

Under the terms of the contract, GSK will pay a license fee of about $102 million for the treatment and purchase nearly 4.5 million shares of Genmab for about $357 million. GSK has also agreed to may as much as $1.6 billion in milestone payments.

The company said the total value of the deal could top $2.1 billion in the event of "full commercial success," according to a written statement released Tuesday.

In addition, Genmab will be entitled to receive tiered, double-digit royalties on global sales of Humax-CD20.

In exchange, GSK will have an exclusive, worldwide license to sell the treatment. Genmab will be responsible for development costs until 2008, after which the costs will be split evenly between the two companies.

GSK will be solely responsible for the manufacturing and commercialization of the drug.

GSK (NYSE: GSK - News) employs more than 5,600 Triangle workers.

Published December 20, 2006 by the Triangle Business Journal

Interesting stuff!! F13