Glaxo and Pfizer pool AIDS drugs

By Ben Hirschler

LONDON (Reuters) - GlaxoSmithKline and Pfizer (PFE.N), two leading developers of AIDS drugs, are merging their HIV operations into a new company that will hold nearly a fifth of the market for treatments against the virus.

Glaxo (GSK.L) will initially have an 85 percent stake in the joint venture and Pfizer 15 percent, reflecting Glaxo's stronger position in marketed products, although this could change according to future sales and product development.

The tie-up underlines a growing trend by big pharmaceutical companies to collaborate in the costly and risky process of developing new medicines.

Leerink Swann analyst Seamus Fernandez said the partnership showed "creative thinking" by Pfizer, whose laboratories have produced few big-selling medicines over the past decade.

Pfizer said it plans to provide the venture at least the amount of money it now spends on HIV research and development.

The partners said on Thursday the new business would be stronger and broader in scope than either company's individually, and would hold a 19 percent share of the growing market for HIV/AIDS treatments.

"Both companies are facing some pressures in the HIV area," said Morningstar analyst Damien Conover. Pfizer's "Selzentry is not doing as well as it probably could if it had more resources behind it ... (GSK is) getting hit pretty hard from Gilead (GILD.O) and Bristol (BMY.N)."

The new company will have 11 marketed products -- including Glaxo's top-sellers Combivir and Epzicom -- which together generated sales of 1.6 billion pounds last year, plus a pipeline of six new medicines, of which four are in mid-stage Phase II development.