UK’s GlaxoSmithKline (GSK) and US-headquartered Pfizer, the world’s two biggest drug companies, announced yesterday that they are forming a new venture to develop and market HIV treatments.

GSK will own 85 per cent of the new company, which will be based in London, and Pfizer will own 15 per cent, although this may change later.

The new company will be named when the deal closes, anticipated to be in the fourth quarter of this year, and will be dedicated to the research, development and commercialisation of HIV medicines, particularly those that improve adherence and overcome resistance to the virus, said a joint statement from the two parent companies.

The new HIV business will have 19 per cent of the growing market in HIV drugs and GSK and Pfizer believe it will be more sustainable and broader in scope than either of them could be individually.

GSK’s Chief Executive Officer, Andrew Witty said the new company is an opportunity for GSK to renew its “focus and deliver more medicines, more efficiently to people living with HIV/AIDS“.

Pfizer’s Chief Executive Officer, Jeff Kindler agreed that together the two companies could reach more patients and achieve more, stressing the “complementary fit of Pfizer’s HIV pipeline and GSK’s global distribution capabilities”, as well as the strength of their current HIV products.

The new company will have a portfolio of 11 marketed products, including market leaders such as Combivir, Kivexa and Selzentry/Celsentri. Based on interim results for 2008, the portfolio generated about £1.6 ($2.4) billion in sales. The company will also have 6 more molecules in its pipeline, including 4 compounds in phase II development.

“Altogether, the new company will have 17 molecules at its disposal to develop in fixed-dose combinations as possible new HIV treatments,” said the joint statement.

On the research front, the new company is covered by a new Research Alliance Agreement with GSK and Pfizer so that both parent companies can continue to carry out discovery research and development into HIV drugs that the new company will invest in and have exclusive first negotiation rights for, as it will for any new HIV drug developed by either parent company.

The full portfolio of 11 drugs comprises: Agenerase, Combivir, Epivir/3TC, Epzicom/Kivexa, Lexiva/Telzir, Rescriptor, Retrovir/AZT, Selzentry/Celsentri, Trizivir, Viracept and Ziagen.

The new company will continue with not for profit pricing for HIV drugs for those countries most in need and will increase research into treatments for children living with HIV. It will also continue to invest in Positive Action, a GSK programme that covers 63 countries and focuses on HIV prevention, tackling stigma and discrimination and increasing treatment literacy.

GSK’s current Head of Personalized Medicine Strategy, Dominique Limet will be the Chief Executive Officer Designate of the new company and a member of its Board. Limet is a trained physician and has held a number of senior roles within GSK.

According to a news report by the Associated Press, the new venture reflects two rising trends in the industry. Companies are cutting costs and focusing research into narrower niches, and once “ardent competitors” are joining forces to share risks and reduce costs of new drug development.

Sources: hivfutures.com, Associated Press.

Written by: Catharine Paddock, PhD