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GSK to sell 2 vaccines to Bavarian Nordic for €301M up front


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GSK to sell 2 vaccines to Bavarian Nordic for €301M up front

GlaxoSmithKline PLC agreed to sell its two travel vaccines Rabipur and Encepur to Denmark's Bavarian Nordic A/S for €301 million in cash up front.

Rabipur, marketed as Rabavert in the U.S., is used to prevent rabies, while Encepur is a vaccine against European tick-borne encephalitis, an infectious disease involving the central nervous system. The two vaccines were added to GSK's portfolio when it acquired Novartis AG's vaccine business in 2015.

According to Bavarian Nordic, Rabipur and Encepur have combined annual sales of about €175 million.

U.K.-based GlaxoSmithKline said it will receive up to €955 million from the sale. In addition to the up-front payment by Bavarian Nordic upon closing, the British drugmaker will receive up to €495 million in milestone payments and about €159 million from the sale of inventory in relation to the companies' supply arrangements.

Milestone payments are subject to the successful transfers of technology and marketing authorization, along with GSK's completion of supply responsibilities until Bavarian Nordic secures regulatory approval to manufacture the divested vaccines.

Danish biotechnology Bavarian Nordic is set to finance the acquisition through cash and bridge financing, which will be refinanced through a planned rights issue of about €350 million.

The deal is expected to close by the end of 2019, subject to the receipt of antitrust approval and shareholder approval of Bavarian Nordic's rights issue.

GSK noted that no employees or manufacturing facilities will be transferred as part of the sale. However, both vaccines will continue to be manufactured mainly in the company's Marburg, Germany, site until full production is transferred to Bavarian Nordic.

The transaction is part of GSK's efforts to increase focus and reinvest in growth assets, as well as to have a simplified supply chain for its vaccines segment, the company said in a news release.

Meanwhile, Bavarian Nordic said the two vaccines, together with the company's own smallpox and monkeypox vaccine Jynneos, will boost its infectious disease franchise.

Bavarian Nordic expects the transaction to close by Dec. 31.