Glaxo sells drugs rights to Novartis in $1bn deal

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GlaxoSmithKline has agreed a deal worth up to 1 billion US dollars (£658m) to sell the rights for the use of a drug in a range of illnesses that can include multiple sclerosis.

The deal with Novartis follows a previous series of asset swaps between the two companies that completed earlier this year.

As part of that set of transactions, Novartis had already acquired the rights to use ofatumumab in cancer treatments.

The Swiss firm will now own all rights to the drug, including for treatment of “auto immune” illnesses, which include multiple sclerosis.

Novartis will pay 300 million US dollars (£191m) to UK-based Glaxo on completion of the latest deal.

A further 200 million US dollars (£127m) is linked to the start of a drugs trial with an additional 534m US dollars (£340m) subject to “certain other development milestones”.

Novartis will also pay royalties of up to 12 per cent to Glaxo on any future net sales of the drug for auto-immune treatments.

David Redfern, Chief Strategy Officer at Glaxo, said: “We are pleased to have completed this transaction to divest the remaining rights in ofatumumab, crystallising significant additional value for GSK shareholders.

“We continue to focus on progressing our pipeline in core therapy areas including HIV, oncology, vaccines, cardiovascular, immuno-inflammation and respiratory diseases.

“We believe GSK’s pipeline has significant potential to drive long-term performance for the group.”