GlaxoSmithKline Plc has just announced that it will be selling its rights in ofatumumab, a drug that treats autoimmune disease, including multiple sclerosis, to Novartis AG for more than $1.03 billion, according to a press release issued by Glaxo.
The transaction allowed Glaxo to divest its remaining rights in ofatumumab, the autoimmune indication.
The transaction also completes Novartis' rights to ofatumumab, following its acquisition of the oncology indication, according to the press release.
The acquisition of the oncology indication was part of a major three-part transaction, which was completed earlier this year.
The Wall Street Journal added that the three-part transaction between Glaxo and Novartis was valued at $20 billion.
It involved Glaxo trading its oncology franchise for Novartis' vaccines business. It also involved forming a joint venture on consumer health care.
David Redfern, Chief Strategy Officer at Glaxo, said in the press release that the company is pleased to have divested its "remaining rights in ofatumumab," and providing "significant additional value to shareholders."
"We continue to focus on progressing our pipeline in core therapy areas including HIV, oncology, vaccines, cardiovascular, immuno-inflammation and respiratory diseases," he said. "We believe GSK's pipeline has significant potential to drive long-term performance for the Group and will be profiling it further at our R&D event in November."
The Wall Street Journal added that David Epstein, head of Novartis, sees the deal as a way to strengthen the company's portfolio of treatments for multiple sclerosis.
"Novartis is pleased to further reinforce our commitment to neuroscience and to add an exciting new treatment to our strong MS portfolio," he said.
Novartis will be first be paying $300 million upon the closing of the transaction and another $200 million once Novartis starts its phase III study in the relapsing of remitting multiple sclerosis, according to the press release.
The remaining $534 million will be paid on the achievement of certain development milestones.
Novartis will also pay Glaxo up to 12 percent in royalties on any future net sales of the autoimmune treatment drug, according to the press release.
The transaction is expected to close by the end of 2015.
