GSK to sell ofatumumab rights for autoimmune diseases to Novartis for up to $1 billion

GSK plc announced an agreement with Novartis Pharma AG to divest its rights in ofatumumab for autoimmune indications, including multiple sclerosis. The transaction, expected to close by the end of 2015, could yield GSK up to $1.034 billion in upfront and future milestone payments, along with royalties of up to 12 percent on future net sales for autoimmune uses.

Novartis Pharma previously acquired the oncology indications for ofatumumab as part of a larger transaction between GSK and Novartis that completed earlier this year. With this new agreement, Novartis Pharma will hold all rights to ofatumumab across all indications. This move allows GSK to focus its research and development efforts on core therapy areas such as HIV, oncology, and vaccines.

The sale includes a $300 million payment at closing. An additional $200 million is contingent upon Novartis initiating a Phase III study for multiple sclerosis. Further contingent payments, tied to other development milestones, could reach up to $534 million. David Redfern, GSK's Chief Strategy Officer, stated that the divestment crystallizes significant additional value for GSK shareholders.

The transaction is subject to the expiration of waiting periods under the U.S. Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. GSK has indicated that this divestiture supports its strategy of concentrating on core areas while realizing value from its development assets.