GSK, Novartis Product Exchange Completed

GlaxoSmithKline (GSK) and Novartis have announced that a multi-billion-dollar, 3-pronged deal to exchange and share various operations has been completed.

The deal includes the transfer of GSK’s oncology business to Novartis for $16 billion. In addition, GSK has acquired Novartis’ global, non-flu vaccines business for $5.25 billion; and the two companies have created a ‘Consumer Healthcare’ joint venture in which GSK has a majority control and equity interest of 63.5%.

“Completion of this transaction represents a major step forward in the group’s strategy to create a stronger and more balanced set of businesses across pharmaceuticals, consumer healthcare, and vaccines,” said Andrew Witty, GSK CEO.

Through the oncology acquisition, Novartis has assumed control of a portfolio of FDA approved cancer therapies, including dabrafenib (Tafinlar), trametinib (Mekinist), pazopanib (Votrient), lapatinib (Tykerb), and ofatumumab (Arzerra). Additionally, the company has received eltrombopag (Promacta), which is currently approved as a treatment for chronic hepatitis C, idiopathic thrombocytopenia, and severe aplastic anemia.

GSK made $1.5 billion of the exchange contingent upon results from the phase III COMBI-d trial exploring the combination of dabrafenib and trametinib in comparison with dabrafenib and placebo for patients with metastatic melanoma.

The importance of the ongoing trial meeting certain conditions was re-emphasized in the closure announcement by GSK; however, the company stated, “Following the positive results from this study announced on 6 February 2015, GSK believes these conditions will be satisfied.”

Early last year the FDA granted the combination of dabrafenib and trametinib an accelerated approval, based on an improvement in overall response rates (ORR) with combination compared with single-agent dabrafenib for patients with BRAF-mutated melanoma. Each agent was approved as a monotherapy for patients with advanced BRAF-mutated melanoma in May 2013 along with a companion diagnostic. The approval of the agents in combination marked the first for a targeted therapy combination in advanced melanoma.

Last month, GSK reported overall survival (OS) results from COMBI-d showing a statistically significant reduction in the risk of death (HR=0.71; P = .011) for a combination of dabrafenib and trametinib compared to dabrafenib monotherapy. In an analysis presented at the 2014 ASCO Annual Meeting, median PFS was 9.3 and 8.8 months in the combination and dabrafenib monotherapy arms, respectively.

Final data from the COMBI-d study will be submitted to the FDA for review, GSK noted. The completion of the study is a post-marketing requirement for the FDA’s accelerated approval of the agent.

At the time, Patrick Vallance, president of Pharmaceuticals R&D at GSK, said the results were evidence of “the scientific rationale for combining MEK and BRAF inhibitors and underscore the potential of the combination of dabrafenib and trametinib in the treatment of BRAF V600 mutation-positive metastatic melanoma.”

As part of the deal, the European Commission (EC) required that Novartis divest in the BRAF inhibitor encorafenib and the MEK inhibitor binimetinib. Novartis committed to return rights for binimetinib and encorafenib to Array Biopharma, the original developer of the two drugs, along with an upfront payment of $85 million.

"With the close of the Novartis-GSK transaction, Array now owns both binimetinib and encorafenib, two innovative oncology products in phase III, with plans for regulatory submissions in 2016," Ron Squarer, CEO of Array, said in a statement.

In further remarks following the completion of the transaction between the companies, Witty said GSK would “now be focused on rapidly implementing our integration plans to realize the growth and synergy opportunities we see in the new Consumer Healthcare and Vaccines businesses.”

GSK said the net after-tax value of the transaction with Novartis was estimated at $7.8 billion. The company said transaction proceeds will be used to fund a $6.1 billion capital return to shareholders.