TRENTON, N.J. — Pharmaceutical giants GlaxoSmithKline and Pfizer will pool resources to create a new company to develop and sell HIV medicines, leveraging a small investment into the No. 2 market position.
The deal, announced Thursday, reflects two trends sweeping the industry. Companies are narrowing their research areas and cutting costs to improve productivity, and once-ardent competitors are working together to share the risks and costs of developing drugs.
The two companies plan to blend London-based Glaxo’s portfolio of HIV drugs — some with patents near expiration — with New York-based Pfizer’s more robust pipeline of drugs in development to create a “more sustainable” organization.
Analysts note Glaxo’s HIV drug sales haven’t been increasing as much as the rapidly growing market — worldwide HIV drug sales rose 14 percent last year — and new competition is coming.
“We expect these types of deals to continue,” as drug makers keep cutting staff and projects to maximize returns, Deutsche Bank analyst Barbara Ryan wrote to investors.
With 11 HIV medicines already on sale, the new venture will have a 19 percent market share, just behind leader Gilead Sciences Inc.
Other competitors include Bristol-Myers Squibb, Abbott Laboratories, Merck and DuPont Pharmaceuticals.
Glaxo chief executive Andrew Witty said the new company will maintain “not-for-profit pricing” of AIDS drugs in needy countries.
