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GSK establishes strategic link with Theravance

Published on 20/05/04 at 10:54am

GlaxoSmithKline has paid $129 million to a small US biotech company for a three-year worldwide licensing option on all the drug candidates in its research programme.

GSK will have the pick of products from San Francisco-based Theravance's current and future research, which concentrates on multivalency programmes, but the biotech will be left alone to conduct its research.

Formerly known as Advanced Medicine, Theravance was founded in 1996 and employs 250 people. It currently has seven potential new drugs in development. Its multivalency approach to drug design uses existing drugs as a starting point with the aim of increasing the efficacy and safety of the end product.

A multivalent drug comprises two or more drug components, each joined by a linking element, which can bind simultaneously to multiple sites on a biological target. Potential multivalent targets represent a majority of all known drug targets, including ion channels, receptors, enzymes, and macromolecular structures.

Rather than simply acquiring Theravance to gain its R&D capabilities, GSK has instead increased its existing 6% shareholding in the company to 19%, with an option to further extend its ownership in the biotech when the current deal ends in August 2007.

Among the new drugs GSK may decide to develop and commercialise under the deal is Telavancin, an antibiotic that Theravance is currently testing in phase II clinical trials.

Telavancin is being developed to treat serious infections due to Gram-positive bacteria, and is expected to be filed for approval in 2006. One Gram-positive bacterium is the methicillin-resistant strain of Staphylococcus aureus, better known as the 'superbug' MRSA. Telavancin is in phase I development for the treatment of MRSA pneumonia.

The companies are already collaborating on a once-daily treatment for asthma and chronic obstructive pulmonary disease and GSK may also exercise an option on a phase I compound to treat overactive bladder.

When it decides to take one of Theravance's drug candidates, GSK will be responsible for all development, manufacturing and commercialisation costs and activities. It will also make clinical, regulatory and commercial milestone payments of between $162 million and $240 million to Theravance, depending on the programme's success, as well as "significant" royalties on sales of the finished products.

GSK has a further option to increase its holding in Theravance to 60%, in 2007 while other shareholders in the company can compel GSK to buy up to half of their outstanding stock.

This clause could see GSK making future payments of up to $525 million for more Theravance stock. If GSK does increase its stake to over 50% it will receive a five-year extension of its option to Theravance's product portfolio.



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