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GSK acquires Corixa for €233m

02-May-2005

GlaxoSmithKline has announced plans to acquire the Corixa Corporation, which represents an important strategic deal for GSK's vaccines division, GSK Bio. The division is the only major vaccine maker with active R&D programs for HIV, malaria, and TB and are currently in late development for vaccines against rotavirus and strepto pneumonia.

GSK's latest deal is an attempt to further bolster its standing within the vaccine market that according to the UK giants should reach an overall value of £10 billion by 2010.

Under the terms of the agreement, GSK will acquire all scientific and business programs, activities and all related rights of Corixa. More significantly GSK will acquire Corixa's manufacturing facility in the US, which produces Monophosphoryl Lipid A (MPL), a novel adjuvant contained in many of the vaccines in GSK's pipeline.

In purchasing Corixa, GSK will no longer incur royalties and other costs under the existing agreements in place between GSK and Corixa nor will GSK incur royalties on future sales of their vaccines containing MPL.

MPL, a vaccine adjuvant from Corixa, is a key component in many of the adjuvant systems used in the future vaccine pipeline of GSK Biologicals. MPL is a component in GSK Bio's new hepatitis B vaccine, Fendrix, which in February this year received regulatory approval from Europe's CHMP. MPL is also included in the adjuvant system used in GSK Bio's candidate malaria vaccine.

This is not the first time the two companies have crossed paths. GSK's relationship with Corixa Corporation also included a collaboration with GSK's pharmaceuticals division on Bexxar, a therapeutic regimen for cancer indications. In December 2004 GSK acquired full marketing and development rights for Bexxar worldwide from Corixa.

Other GSK Bio vaccines under development with MPL include a candidate prophylactic vaccine against cervical cancer caused by HPV, a candidate prophylactic vaccine against herpes simplex and a number of prophylactic vaccines specifically designed for infections in seniors such as varicella zoster and the flu virus. In addition MPL is a key component in the adjuvant system GSK Bio is testing in a number of its investigational cancer immunotherapeutic vaccine approaches for the treatment of breast, lung, melanoma or prostate cancers.

In addition, GSK will also acquire assets related to a candidate prophylactic tuberculosis vaccine and to a portfolio of candidate immunotherapeutic cancer vaccines, being developed by GSK Biologicals and which contain antigens discovered by Corixa pursuant to a 1998 multi-field vaccine discovery collaboration between the parties.

As a result of the acquisition, GSK will no longer be required to pay royalties related to these antigens. Corixa's portfolio also includes other compounds such as TLR4 agonists and antagonists.

Jean Stephenne, president of GSK Biologicals, said: "MPL is an important component in our vaccines under development, including Cervarix, our candidate vaccine targeting infection with the Human Papilloma Virus (HPV), a leading cause of cervical cancer."

"In addition, this also represents the next step in progressing GSK's promising tuberculosis vaccine approach and its cancer immunotherapeutics, as Corixa and GSK have together developed considerable expertise in these areas over the years."

The financial details of the acquisition mean the shareholders of Corixa are entitled to receive $4.40 (€3.40) per common share, representing a total value of approximately $300 million (€233 million). GSK currently own approximately 8 per cent of the outstanding Corixa shares and additional holders of approximately 11 per cent of the shares have agreed to vote their shares in favour of the transaction. The transaction is expected to close in the third quarter of this year.

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