Glaxo's Corixa deal a shot in the arm for vaccines
Tue May 3, 2005 05:01 AM ET
By Ben Hirschler, European Pharmaceuticals Correspondent
LONDON, May 3 (Reuters) - GlaxoSmithKline Plc's (GSK.L: Quote, Profile, Research) $300 million planned acquisition of Corixa Corp. (CRXA) underlines the British-based group's growing confidence in vaccines as a future driver of growth, industry analysts said on Tuesday.
"The acquisition is a bullish signal for the vaccine portfolio," analysts at CIBC wrote in a note.
Europe's biggest drugmaker said at the weekend it was paying a 48 percent premium to the prevailing share price for the Seattle-based biotechnology firm to get exclusive access to its know-how and manufacturing facilities.
The main prize is Corixa's MPL compound -- a derivative of the lipid A molecule found in certain bacteria -- which is used in several GSK vaccines, including potential blockbuster Cervarix, a treatment to prevent cervical cancer.
"For the Cervarix bulls, the deal would appear to confirm GSK's faith in the project, and the acquisition appears an inexpensive option if Cervarix is successful," said David Beadle of UBS in a note.
Shares in GSK, which were boosted last week by an earlier-than-expected deal with U.S. regulators over a problem plant in Puerto Rico and strong quarterly results, added 1.8 percent to 13.35 pounds by 0845 GMT in a firmer London market.
The acquisition will save GSK development milestones and royalties which had been payable to Corixa for use of MPL in Cervarix and other vaccines.
MPL is an adjuvant that is added to vaccines to improve patients' immune response. Analysts believe it could be an important element in the future commercial success of Cervarix, since GSK hopes it will reduce the need for booster shots.
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Cervarix, which is designed to prevent cervical cancer by fighting the human papillomavirus (HPV) responsible for most cases of the disease, faces competition from Merck & Co. Inc.'s (MRK.N: Quote, Profile, Research) rival shot Gardasil.
Both vaccines are expected to reach the market in the next year or two.
Credit Suisse First Boston recently forecast that peak sales of Cervarix could reach $4 billion a year.
Although most analysts have more conservative forecasts, the product is viewed as a blockbuster in GSK's pipeline and one that should transform the importance of vaccines in the group's portfolio.
GSK already vies for the top position in the global vaccine business with Sanofi-Aventis SA (SASY.PA: Quote, Profile, Research) , but the division has traditionally been relatively low-growth.
Vaccines generated sales of 1.2 billion pounds ($2.28 billion) for GSK in 2004, out of total pharmaceutical sales of 17.2 billion.
GSK plans to capitalise on current interest in vaccines by focusing on Cervarix, along with five or six other new vaccines slated for launch by 2010, at a focused research seminar for investors on June 30.
The Corixa deal will add to GSK's long-term vaccine pipeline by contributing candidate products against tuberculosis and experimental shots designed to improve the body's immune response to various cancers.
GSK already owns 8 percent of Corixa and has collaborated on a number of projects with the U.S. firm, including non-Hodgkin's lymphoma drug Bexxar, which was developed by Corixa... |
