UK drug giant GlaxoSmithKline has splashed out around $1.65 billion for privately-held US group Reliant Pharmaceuticals, thereby gaining access to the latter’s heart disease drug Lovaza.
Reliant, which focuses on the development of speciality medicines for cardiovascular illnes
ses, has enjoyed solid growth in sales during the last year, generating $341 million in the nine months to September 30, up 62% over the year-ago period.
But GSK’s interest in the firm was likely spiked by Reliant’s flagship drug, the omega 3-based Lovaza (omega-3-acid ethyl esters; form
erly known as Omacor) which, since its launch at the end of 2005 for the control of triglycerides, is steadily growing in popularity.
The drug pulled in net sales of $206 million during the nine-month period, marking an increase of 115% from the same period in 2006 and, according to the comp
any, currently holds a 10% share of the non-statin segment of the US cardiovascular sector. The market generated revenues of around $2.2 billion last year, but GSK points out that it is expected to grow by at least 20% annually, and that “there is significant opportunity for future growth of Lovaz
a in this market segment”.
Strategic fit
“The addition of Lovaza to the GSK portfolio adds a new driver of sales growth in the US business. It represents a strong strategic fit, complementing Coreg CR, a leading treatment for heart failure and hypertension, and adds to our growi
ng profile in the cardiovascular disease area,” said Chris Viehbacher, President, US Pharmaceuticals, GSK, explaining the group’s strategy behind the deal.
The company expects the move, which is still subject to all the customary closing conditions, to be accretive to its earnings from next year (excluding integration costs), but that its value will snowball thereafter. But investors seemed unmoved by the deal’s potential; shares in the company closed down nine pence at £11.60 on the London Stock Exchange following the announcement. By Selina McKee
