British drugmaker GlaxoSmithKline (NYSE: GSK) said it will buy a $250m stale in Vir Biotechnology to advance the US firm’s potential treatments for coronavirus, a disease that killed almost 75,000 people and infected more than 1.3 million people across the globe.
GSK said cash will be used to accelerate Vir’s very “promising antibody candidates” , VIR-7831, and VIR-7832 in Phase II clinical trials “within the next three to five months”.
GlaxoSmithKline disclosed that they will bear 72.5% of the antibody program cost, 27.5% of the vaccine development program, and both companies will share half of the development costs related to the functional genomics program.
“Vir’s unique antibody platform has precedented success in identifying and developing antibodies as treatments for multiple pathogens, and it is highly complementary with our R&D approach to focus on the science of immunology,” Hal Barron, GSK’s chief scientific officer and president of R&D, said in a statement on Monday.
San Francisco-based Vir’s stock price jumped 26% after the news as investors appreciated the collaboration between both companies. GlaxoSmithKline stock, on the other hand, liftedonly 2% because of its big size when compared to Vir Biotechnology.
GlaxoSmithKline stock price currently trades around $37, down from a 52-weeks high of $48 a share. It had generated year over year revenue growth of 8.5% in the latest quarter while the full-year sales increased 10% year over year to £33.8bn. The company has generated net cash flow from operating activities of £8bn and the free cash flow stood around £5.1bn.
“In 2020, our first priority remains Innovation, to progress our pipeline and support new product launches. Recent data readouts underpin our decision to further increase investment in R&D and these new products. At the same time, we are again focused on operational execution,” Emma Walmsley, GSK chief executive officer said.