Alliance with Theravance Inc
GlaxoSmithKline PLC
31 March 2004
GlaxoSmithKline And Theravance To Form Strategic Alliance
LONDON, UK and SOUTH SAN FRANCISCO, CA / March 31, 2004 -- GlaxoSmithKline plc
(GSK) and Theravance, Inc., a privately-held pharmaceutical company, announced
today that they have entered into an innovative broad-based strategic alliance
to develop and commercialize novel medicines across a variety of important
therapeutic areas, including bacterial infection, respiratory, urinary
incontinence and gastrointestinal.
Under the terms of the alliance Theravance will receive $129 million, a
significant part of which relates to GSK's purchase of shares to increase its
ownership position in Theravance from approximately 6% to approximately 19%,
with an option for a further extension of GSK ownership in 2007. GSK will also
receive an exclusive option to license potential new medicines from all current
and future programs through August, 2007 on a worldwide basis. The alliance
provides Theravance with a strong global pharmaceutical partner and access to
significant capital to continue its drug discovery and development efforts. This
alliance also builds on the companies' existing collaboration in respiratory
diseases in which a new once-daily treatment for asthma and COPD is currently in
Phase 2 clinical trials.
Commenting on the deal, Dr. Tadataka Yamada, Chairman, R&D, GlaxoSmithKline
said,
"This alliance allows GSK to benefit from the excellent research and discovery
efforts at Theravance and offers us the opportunity to access, for development,
new medicines for patients across a range of therapeutic areas. Our successful
relationship with Theravance in respiratory with long-acting beta agonists gives
us confidence that this new alliance will also yield a very productive
collaboration."
"Our alliance with GSK continues an innovative collaborative approach," said
Rick E Winningham, Chief Executive Officer of Theravance. "By combining the
development and commercialization expertise of GSK with Theravance's unique
ability to discover and develop best-in-class medicines through the application
of our technological insight of multivalency, the two companies can create
medicines that make a difference and improve patient outcomes."
R&D Collaborative Arrangements
In six years, Theravance has applied its unique multivalent small molecule
discovery approach to discover seven potential new medicines, currently in
active development. In addition to the once-daily treatment for asthma and COPD,
these include a treatment for serious infections due to Gram-positive organisms
(currently expected to file in 2006) and a compound in Phase 1 development to
treat overactive bladder. Other compounds in earlier development are targeted at
the treatment of gastrointestinal disorders, bacterial infections and
respiratory disease. Upon accepting a new program, GSK will be responsible for
all development, manufacturing and commercialization activities. Depending on
the success of these new programs, Theravance will receive clinical, regulatory
and commercial milestone payments and significant royalties on sales of
medicines. For successful programs, these milestone payments could range from
$162 million to $240 million per program. Under the alliance, Theravance will
retain its operational independence to continue discovering and developing new
medicines.
Equity and Governance Arrangements
In addition to the R&D collaboration aspects of this alliance, the companies
have agreed to some innovative equity and governance arrangements.
GSK's ownership of Theravance may be increased from 19% to up to 60% in 2007 as
GSK has the right, at its sole discretion, to acquire ("call") in 2007 half of
Theravance's outstanding shares at a significant premium to the price paid by
GSK in connection with this transaction. Alternatively, Theravance's
shareholders, other than GSK, have the right to cause GSK to acquire ("put") up
to half of their outstanding stock in 2007. The put price is set at a premium to
the price paid by GSK in connection with this transaction and guarantees that
value on half the outstanding shares for all shareholders who own Theravance
stock in 2007. Given the maximum number of shares subject to the put, GSK's
maximum obligation would be $525 million. The call and the put will be
structured as transactions directly between Theravance and its shareholders and
will be funded by GSK at the time of occurrence.
If GSK's ownership increases to more than 50% in 2007 as a result of the call or
the put, it will receive a 5 year extension of its exclusive option to
Theravance's product portfolio. GSK will also have certain Board and governance
rights as long as it maintains its ownership in Theravance above 19%.
The companies expect to close on transactions under the Strategic Alliance
Agreement upon receipt of regulatory approval and Theravance stockholder
approval.
Lazard acted as financial advisor to Theravance in connection with this
transaction.
Theravance is a privately-held pharmaceutical company dedicated to utilizing its
proprietary multivalent technology to discover, develop and market best-in-class
medicines for a wide variety of serious medical conditions across a number of
therapeutic areas, including respiratory disease, bacterial infections,
gastrointestinal disorders, overactive bladder and anesthesia. Since its
inception, Theravance has implemented an integrated model of drug discovery and
exploratory development and applied its multivalent insight to create a broad
pipeline across diverse therapeutic areas. For more information, please visit
the company's web site at www.Theravance.com.
GlaxoSmithKline, one of the world's leading research-based pharmaceutical and
healthcare companies, is committed to improving the quality of human life by
enabling people to do more, feel better and live longer. For more information,
please visit the company's web site at www.gsk.com.
Under the safe harbor provisions of the US Private Securities Litigation Reform
Act of 1995, GlaxoSmithKline cautions investors that any forward-looking
statements or projections made by GSK, including those made in this
announcement, are subject to risks and uncertainties that may cause actual
results to differ materially from those projected. Factors that may affect the
Group's operations are described under Risk Factors in the Operating and
Financial Review and Prospects in GlaxoSmithKline's Annual Report on Form 20-F
for 2003.
Theravance and the Theravance logo are registered U.S. trademarks.
Enquiries:
Media enquiries - Theravance: David Brinkley 650-808-3718
GSK:
UK Media enquiries : Martin Sutton (020) 8047 5502
David Mawdsley (020) 8047 5502
Chris Hunter-Ward (020) 8047 5502
US Media enquiries: Nancy Pekarek (215) 751 7709
Mary Anne Rhyne (919) 483 2839
Patricia Seif (215) 751 7709
European Analyst/Investor enquiries: Duncan Learmouth (020) 8047 5540
Anita Kidgell (020) 8047 5542
Philip Thomson (020) 8047 5543
US Analyst/ Investor enquiries: Frank Murdolo (215) 751 7002
Tom Curry (215) 751 5419
This information is provided by RNS
The company news service from the London Stock Exchange
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