GSK to sell two vaccines in $1.1 billion deal to focus on newer treatments

(Reuters) – GlaxoSmithKline will sell two travel vaccines to Bavarian Nordic for up to 955 million euros ($1.1 billion), the British firm said on Monday, as it looks to bolster its push into the lucrative cancer drug market.

The sale of anti-rabies treatment Rabipur and Encepur, used for the prevention of tick-borne encephalitis, to the Denmark-based biotechnology firm includes an upfront payment of 301 million euros and milestone payments of up to 495 million euros.

Chief Executive Officer Emma Walmsley has been pushing for a leaner structure since she took over in 2017 by spinning off or selling units to focus on reinvigorating GSK’s pharmaceuticals business. It staged a comeback into cancer treatments with a $5.1 billion buyout of U.S. drugmaker Tesaro in December last year.

“This agreement with Bavarian Nordic will enable us to commit greater resources to our key growth assets and to our R&D pipeline,” Roger Connor, president of Global Vaccines at GSK said.

GSK, which is preparing to separate its consumer-facing products and drugs businesses, acquired the vaccines from Novartis in 2015 as part of a broad asset-swap here in which GSK sold its oncology business to the Swiss drugmaker.

The drugmaker reported revenue of 5.89 billion pounds ($7.61 billion) from its vaccines segment in 2018.

London-listed GSK said that both vaccines will continue to be manufactured at its Marburg site in Germany until full production is transferred to Bavarian Nordic within five years.