ViiV to Acquire Rights to HIV Drugs Created With Shionogi

GlaxoSmithKline Plc (GSK)’s ViiV Healthcare Ltd. agreed to buy the rights to HIV treatments the unit has developed with Shionogi & Co., giving the Japanese drugmaker a 10 percent stake in ViiV as the companies prepare to seek approval of the most advanced medicine from the collaboration.

Shionogi will get royalties in the “high teens” from sales of HIV drugs known as integrase inhibitors, including the experimental dolutegravir, Glaxo said in a statement today. ViiV, also owned by Pfizer Inc. (PFE), will book all sales and incur the remaining research, development and commercialization costs.

Dolutegravir may challenge the world’s best-selling AIDS medicine, made by Gilead Sciences Inc. (GILD) The drug, combined with one of ViiV’s older treatments, reduced the HIV virus to undetectable levels in more people than Gilead’s Atripla in a clinical trial released last July. The medicine will be submitted for approval by the end of the year, Glaxo said.

“We’re all excited about the data from the registration studies completed in 2012,” ViiV Chairman David Redfern said in a phone interview. “For ViiV, this gives us a lot of simplicity to the execution” of bringing dolutegravir to market.

After the transaction, Glaxo will own 76.5 percent of ViiV and Pfizer 13.5 percent. If dolutegravir is approved in the U.S. and Europe, Glaxo will be entitled to an extra 1.8 percent.

The new arrangement doesn’t change the possibility that ViiV may offer shares to the public, said Redfern, also the chief strategy officer of Glaxo.

“We retain optionality on what to do with ViiV,” he said. “We will continue to look at it.”

To contact the reporter on this story: Makiko Kitamura in London at mkitamura1@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net