GlaxoSmithKline will reap $300 million up-front and ultimately could receive up to $734 million in milestone payments from the sale of an experimental multiple sclerosis drug to Novartis.
GSK, a London-based company that is one of the Triangle’s largest employers, also would receive royalty payments of up to 12 percent of sales if Novartis, which is headquartered in Switzerland, succeeds in bringing the drug to market.
Novartis previously acquired the rights to the GSK drug ofatumumab as a cancer treatment, part of a $20 billion asset swap between the two companies that was completed earlier this year. The deal announced Friday gives Novartis all remaining rights to the drug, which GSK has been testing as a multiple sclerosis treatment. Novartis sells ofatumumab as a cancer drug under the brand name Arzerra.
GSK will receive its $300 million up-front payment when the deal closes, which is expected to happen before the end of the year. It also would receive $200 million when Novartis initiates a Phase 3 study of the drug to treat multiple sclerosis and up to $534 million upon achievement of additional, unspecified milestones.
David Redfern, chief strategy officer at GSK, said in a statement that selling off the remaining rights to ofatumumab would benefit shareholders.
GSK is in the midst of a restructuring triggered by several years of eroding revenue and its dependence on its top-selling drug, the asthma medication Advair, whose sales are declining.
GSK has about 4,200 workers in the Triangle, down from about 5,000 a year ago after largely eliminating its research-and-development operations here.
Novartis has an MS drug, Gilenya, which last year generated about $2.5 billion in sales, making it the company’s No. 2 drug, according to Bloomberg News. But with Gilenya set to lose its patent protection as soon as 2019, the company is looking ahead.
But analysts told Bloomberg the timetable for getting ofatumumab to market as a multiple sclerosis treatment lags a competing treatment being developed by Roche.
Fabian Wenner, an analyst at Kepler Cheuvreux in Zurich, was dismissive of ofatumumab’s potential.
“It’s a joke,” Wenner said. “Patients either want better convenience than the old drugs or they want better efficacy, and ofatumumab is offering neither of those things. The chances of this being successful in MS and generating any sales are zero in my view.”
But Novartis trumpeted that a Phase 2a study found that ofatumumab “demonstrated significant reduction of up to 90 percent in the cumulative number of new brain lesions in patients with MS between weeks 4-12 in the study. No unexpected safety findings were reported in the study.”