GSK buys Reliant for cardiovascular drugs
$1.65bn in a bid to improve its cardiovascular therapy portfolio.
The UK drug giant is going through a restructuring effort as it aims to buffer the effect of generic competition and the sudden lacklustre performance of diabetes drug Avandia (rosiglitazone) following health scares earlier this year. Last month, the company announced its 'Operational Excellence' restructuring programme which would include plant closures, streamlining production processes, and anticipated job cuts, which have speculated to be in the thousands. The scheme is designed to achieve savings of up to £700m ($1.4bn) by 2010. The latest acquisition move sees the company looking at expanding further into the lucrative cardiovascular market, which, according to a report this year by URCH Publishing, is expected to be worth $116.3 billion in 2010. GSK was classed as one of the 'top 10' cardiovascular companies in 2005, and according to report author Steve Seget the company is "forecast to grow [its] cardiovascular sales at a double-digit annual growth rate over the next five years". The purchase of Reliant, a privately held specialty pharmaceutical company focused on cardiovascular therapies, pushes GSK along that road. Along with US-based Reliant, GSK takes on the blossoming drug Lovaza (omega-3-acid ethyl esters). Reliant licensed the US rights to Lovaza from Pronova BioPharma, and since its launch in 2005 Lovaza, formerly known as Omacor, has shown strong growth and market presence. A treatment for patients with high levels of triglycerides, which increases the risk of coronary heart disease, Lovaza brought in net sales of $206m in the nine months ending September 30, 2007 - an increase of 115 per cent over the first nine months of 2006. In the US, the drug has a 10 per cent market share in the $2.2bn non-statin dyslipidemia segment of the US cardiovascular market. With this segment expected to grow in excess of 20 per cent a year, "GSK believes there is significant opportunity for future growth of Lovaza in this market segment", the company said in a statement. GSK US pharmaceuticals president Chris Viehbacher said: "The addition of Lovaza to the GSK portfolio adds a new driver of sales growth in the US business. It represents a strong strategic fit, complementing Coreg CR, a leading treatment for heart failure and hypertension, and adds to our growing profile in the cardiovascular disease area." In addition to Lovaza, Reliant also markets three other in-licensed cardiovascular products - high blood pressure treatments DynaCirc CR (isradipine) and InnoPran XL (propanolol HCL) and abnormal heart rhythm and arrhythmia treatment Rythmol SR (propafenone). Lovaza is the only prescription omega-3 drug approved by the US Food and Drug Administration for the treatment of very high triglycerides. Rights to the drug in other markets have been licensed by Pronova to several other companies. The acquisition is still subject to approval by the US Federal Trade Commission and is expected to conclude before the end of the year. As a result of the acquisition, biotechnology company Alkermes is to receive $174m for its stake in Reliant, which it will use to repurchase shares of common stock.