Publish Date : 30-Oct-2012
ViiV Healthcare Ltd and Shionogi & Co., Ltd. today announced that they have entered into an agreement substantially revising their integrase inhibitor relationship. Under the new agreement, ViiV Healthcare will acquire the exclusive global rights to the Shionogi-ViiV Healthcare LLC joint venture assets. The assets include the investigational medicine dolutegravir and other early stage integrase inhibitor compounds.
In the new relationship, Shionogi will receive a royalty on net sales of the integrase inhibitor portfolio averaging in the high teens. For a defined period post-launch, as the franchise is becoming established, the royalty applies to sales above certain minimum thresholds; after that period, the royalty applies to all sales. Shionogi will also become a 10% shareholder in ViiV Healthcare and will be entitled to a proportional share of ordinary dividends paid. Shionogi will be entitled to representation on the ViiV Healthcare Board, and will, for a defined period, continue to have ongoing involvement in the formulation of the development and commercialization plans for the integrase inhibitor portfolio. The deal is effective on 31 October 2012 and replaces the existing joint venture agreement between ViiV Healthcare and Shionogi.
The transaction is well aligned with both companies’ mutual goal to advance the integrase inhibitor portfolio most effectively and efficiently, while maximising the full potential long-term value of the assets. ViiV Healthcare will acquire exclusive development and commercialization rights to the integrase inhibitor portfolio. This will enable streamlining of R&D and commercial operations in order to maximise sales growth and shareholder returns. For Shionogi, the revised relationship offers the value of a royalty stream augmented by a shareholding in ViiV Healthcare itself, while releasing financial, operational, and R&D resources to support its other pipeline products in global development.
ViiV Healthcare was established in 2009 as a speciality HIV company between GlaxoSmithKline and Pfizer, with an 85%, 15% equity split respectively. Post transaction, equity positions in ViiV Healthcare are GSK: 76.5%, Pfizer: 13.5% and Shionogi: 10%. Should dolutegravir be approved in the US and EU, GSK would be entitled to 1.8% additional equity. This will be an adjustment between GSK and Pfizer and will not dilute Shionogi. In addition GSK, Pfizer and Shionogi will continue to each be entitled to certain preferred ordinary dividends on the products they contributed to ViiV Healthcare (including the integrase inhibitors). David Redfern, Chairman of the Board, ViiV Healthcare stated: “The Shionogi-ViiV Healthcare joint venture has been extremely productive, with the first integrase inhibitor, dolutegravir, scheduled to commence filings before the end of the year.
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