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The transaction is anticipated to close by the end of 2019.
GlaxoSmithKline (GSK) announced it was divesting its vaccines Rabipur (Rabavert) for protection against rabies, and Encepur for the prevention of tick-borne encephalitis, to Bavarian Nordic for up to $1.1 billion.
According to an Oct. 21, 2019 press release, the decision was based on GSK’s plan to focus on and reinvest in growth assets, innovation, and a simplified supply chain in its vaccines business.
GSK will receive EUR 301 million (US$335 million) up front along with milestone payments of EUR 495 million (US$551 million) and proceeds from the sale of inventory over the course of the supply arrangements for a total of up to EUR 955 million (US$1.06 billion), according to the release. Depending on the future sales and performance of the vaccines, EUR 25 million (US$27 million) of the total amount is conditional.
Bavarian Nordic plans to use the vaccines to create an infectious disease franchise along with its recently approved smallpox and monkeypox vaccine Jynneos, which is manufactured using the same technology as the two acquired vaccines.
“This truly transformative acquisition pulls forward our vision to be a profitable independent vaccine company,” added Paul Chaplin, president and CEO of Bavarian Nordic, in the press release. “The addition of these two established and proven commercial products, together with Jynneos has created a leading infectious disease franchise that will drive sustained profits and growth in the years ahead, supporting future product launches or product acquisitions.”
“This agreement with Bavarian Nordic will enable us to commit greater resources to our key growth assets and to our R&D pipeline, while also ensuring the continued supply of these important and successful vaccines,” added Roger Connor, president, Global Vaccines at GSK, in the press release.
The vaccines will continue to be manufactured at GSK’s Germany location until production is transferred to Bavarian Nordic in five years. The transaction is anticipated to close by the end of 2019.