GlaxoSmithKline to divest rabies, tick-borne encephalitis vaccines
GlaxoSmithKline announced the divestment of travel vaccines Rabipur for the prevention of rabies, and Encepur for the prevention of tick-borne encephalitis, to Bavarian Nordic. The decision to divest these brands, acquired from Novartis in 2015 as part of the acquisition of its vaccines business, supports GSK's strategic intent to increase focus and reinvest in growth assets, innovation and a simplified supply chain in its vaccines business. GSK will receive an upfront payment of approximately EUR301M and will also receive milestone payments of EUR495M and additional proceeds from the sale of inventory over the course of the supply arrangements for a total consideration of up to EUR 955M. The value of inventory at the anticipated closing date is estimated to be EUR 159M. EUR 25M of the total consideration is conditional upon future sales performance of the two vaccines. Milestones are payable upon successful technology transfer, marketing authorization transfers and the fulfillment of GSK's supply commitments until Bavarian Nordic obtains regulatory approval to manufacture the vaccines. To ensure supply continuity both vaccines will continue to be manufactured primarily at GSK's Marburg site in Germany until full production is transferred to Bavarian Nordic. The staged technology transfer is expected to commence in Q1 2020 with completion anticipated within 5 years. No employees or manufacturing facilities are being transferred as part of this transaction. The transaction is expected to close by the end of 2019 and is conditional upon anti-trust approval as well as approval of Bavarian Nordic's rights issue by its shareholders.