In their two-decade history collaborating, GSK andHGS have worked together on several compounds. The pair's two major projects,both of which are in late-stage development, are darapladib, indicated for thetreatment of atherosclerosis, and albiglutide, indicated for the treatment oftype 2 diabetes. GSK and HGS are also jointly marketing Benlysta, indicated forlupus, in a 50/50 profit-share scenario.
According to Witty, the transaction is well alignedwith GSK's long-term strategy of delivering sustainable growth, simplifyingGSK's business model, enhancing R&D returns and deploying capital withdiscipline. Through complete ownership of Benlysta, albiglutide and darapladib,GSK can simplify and optimize R&D, commercial and manufacturing operationsto advance these products most effectively and efficiently while securing thefull potential long-term value of the assets.
GSK anticpates at least $200 million in costsynergies to be fully realized by 2015 and expects the transaction to beaccretive to core earnings beginning in 2013.
"After a thorough analysis of strategicalternatives, HGS has determined that a combination with GSK is the best courseof action for our company and the best way to maximize value for ourstockholders," said H. Thomas Watkins, president and CEO of HGS. "HGS has had along and productive working relationship with GSK, and together we will beuniquely positioned to achieve the full potential of Benlysta and otherproducts in our pipeline for the benefit of those battling serious diseasearound the world. … We look forward to working with GSK to ensure a seamlesstransition for all of our stakeholders."
