GlaxoSmithKline (GSK) has been working on streamlining operations. In sync with that, the pharma major has decided to amend its 2012 Fabry disease agreement with Amicus Therapeutics (FOLD).
Last year, the companies had entered into an agreement to co-develop Fabry disease candidate, migalastat HCl. The agreement had vested Glaxo with the rights to commercialize migalastat HCl outside the U.S.
The companies amended the agreement a few days ago, by virtue of which Amicus will have the sole worldwide rights to develop and commercialize migalastat HCl (both as monotherapy and in combination with enzyme replacement therapy/ERT) for Fabry disease.
Complete 12- and 24-month data from the phase III study on migalastat HCl monotherapy for Fabry disease is expected in the first half of 2014.
Although Glaxo will not receive any upfront payment, the company is eligible to receive regulatory and commercial milestone payments. Glaxo will receive royalties (single-digit for migalastat HCl in combination with ERT and mid-teens for the monotherapy) depending on the sales of the drug in eight ex-U.S. major markets.
Glaxo will make equity investment of $3 million through private placement in public equity transaction in Amicus.
Apart from giving up its rights to migalastat HCl, Glaxo has also divested a portion of its holding in Aspen Pharmacare Holdings Limited. The net proceeds from the transaction, expected to be approximately £425 million, will not have an impact on Glaxo’s 2013 core earnings.
Glaxo will continue to hold 12.4% (56.5 million shares) of the issued share capital of Aspen. The company will use the proceeds from the divestment for general corporate purposes.
Glaxo, a large cap pharma company, carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the large cap pharma space are Bayer (BAYRY) and Johnson & Johnson (JNJ). Both carry a Zacks Rank #2 (Buy).
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