Glaxo Reaches $2.2 Billion Dementia Drug Deal With Alector – Yahoo Finance

https://finance.yahoo.com/news/glaxo-reaches-2-2-billion-115216388.html


0

(Bloomberg) — GlaxoSmithKline Plc agreed to pay U.S. biotech Alector Inc. as much as $2.2 billion to develop therapies targeting diseases such as Parkinson’s and Alzheimer’s, the latest step by the U.K. pharmaceutical giant to rebuild its drug pipeline.

Alector will receive $700 million upfront from Glaxo, and up to $1.5 billion in the future if the treatments prove successful, the companies said Friday. They will co-develop and commercialize two monoclonal antibodies, one of which is in late-stage trials to tackle a form of dementia.

The shares of Alector rose as much as 93% in New York trading, while Glaxo was little changed in London.

The therapies are part of an emerging field of research that tries to use the body’s own immune system to fight neurodegenerative diseases. In this case, scientists are seeking to increase levels of a protein in the brain called progranulin, which helps regulate the immune response and affects the survival of neurons.

Chief Executive Officer Emma Walmsley is embarking on a long-planned transformation of the drugmaker that includes spinning off Glaxo’s consumer health unit, paring the dividend and increasing the number of promising treatments in development. Walmsley and her executives set out details of the strategy for the first time last week.

Elliott Critique

She’s also facing pressure from activist investor Elliott Investment Management, which laid out recommendations in an open letter Thursday to improve returns, including beefing up the pharma expertise in its top ranks. In a response Friday, Glaxo said the board “fully supports” Walmsley’s actions and expects a “step-change in performance and long-term shareholder value” after the company splits next year.

Moody’s Investors Service changed its outlook for Glaxo from negative to stable Friday in response to the details provided on its strategy. The ratings company cited the dividend cut and proceeds Glaxo will gain from the demerger of the consumer arm, which could go toward reducing debt and funding its pension deficit.

Elliott’s Call for Leadership Change Steps Up Glaxo Pressure

The Alector agreement follows a cancer deal with iTeos Therapeutics Inc. last month worth a potential $2.1 billion to develop an immune therapy being tested against advanced solid tumors. Glaxo also struck an accord with U.S. biotech Halozyme Therapeutics Inc. in June worth as much as $740 million, giving the company access to technology that could enable longer dosing intervals for HIV drugs.

Scientists have struggled for decades to find treatments for brain diseases like Alzheimer’s, leading a number of companies to abandon their efforts. Yet the U.S. approved an Alzheimer’s drug from Biogen Inc. last month, despite questions over its effectiveness. Now drugmakers such as Eli Lilly & Co. are looking to follow suit with their treatments.

(Updates Moody’s rating change in seventh paragraph)

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.


Like it? Share with your friends!

0

0 Comments

Your email address will not be published. Required fields are marked *

Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube, Vimeo or Vine Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format