GSK to buy US vaccine-maker Affinivax in $3.3bn deal

·2-min read
A scientist prepares stem cells for research at the GlaxoSmithKline (GSK) research centre in Stevenage, Britain November 26, 2019.  REUTERS/Peter Nicholls
GSK will pay Affinivax $2.1bn upfront and up to $1.2bn in potential development milestones. Photo: Peter Nicholls/Reuters

UK pharmaceuticals group GSK (GSK.L) is taking over biopharmaceutical firm Affinivax in a $3.3bn (£2.6bn) deal that will bolster its vaccine pipeline.

GSK, the world's largest vaccine maker by sales, is expected to pay $2.1bn upfront plus another potential $1.2bn in potential development milestones.

Affinivax is pioneering the development of a novel class of vaccines, GSK says, the most advanced of which are next-generation pneumococcal vaccines for infections such as pneumonia, meningitis and sinusitis.

Hal Barron, chief scientific officer and president research & development (R&D) at GSK, said: “The proposed acquisition further strengthens our vaccines R&D pipeline, provides access to a new, potentially disruptive technology, and broadens GSK’s existing scientific footprint in the Boston area.

Read more: GSK racks up £1.4bn in COVID sales ahead of consumer health split

“We look forward to working with the many talented people at Affinivax to combine our industry-leading development, manufacturing, and commercialisation capabilities to make this exciting new technology available to those in need.”

The deal comes as GSK prepares to spin off its consumer healthcare unit, and become an R&D-focused biopharma company.

Last month, it indicated an appetite for further deals after spending $1.9bn to buy Sierra Oncology to bolster its cancer business.

"While this marks a step in the right direction with regard to the group's strategy, we're mindful that owning the treatment and making money from it are two very different things," said Hargreaves Lansdown analyst Laura Hoy.

GSK has been under pressure to bolster its vaccines business as it faces competition from vaccine candidates from rivals Pfizer (PFE) and Moderna (MRNA) using newer mRNA technology.

Read more: AstraZeneca COVID vaccine pushes sales to $37bn

The Affinivax deal is expected to close in the third quarter of 2022.

The FTSE-listed (^FTSE) pharma company also reiterated its outlook for 2022 and its medium-term targets.

Watch: GSK tops quarterly forecasts