Novartis takes complete control of GSK's Arzerra

In a $1 billion deal, GlaxoSmithKline (GSK) has transferred the remaining rights to its Arzerra product to Novartis, ending its direct involvement in the drug.

Novartis had already gained rights to all cancer indications for Arzerra (ofatumumab) as part of its acquisition of GSK's oncology products in an asset-swap deal which closed earlier this year, but has now also picked up rights to other uses including autoimmune diseases like multiple sclerosis (MS).

The new deal includes a $300 million payment to GSK on the closure of the transaction, $200 million when Arzerra starts a phase III trial in relapsing-remitting MS and another $535 million tied to development milestones. GSK will also receive royalties on sales of up to 12 per cent in auto-immune indications.

GSK said in a statement that the divestment would allow it to focus on core therapy areas including HIV, oncology, cardiovascular, immuno-inflammation, respiratory diseases and vaccines, with the latter boosted by the purchase of Novartis' vaccines unit as part of the asset swap.

Ofatumumab is an anti-CD20 antibody currently used as a treatment for chronic lymphocytic leukaemia (CLL) but is in phase II trials as an MS therapy. A 38-patient open-label study which completed in 2011 showed that doses of the drug given by infusion resulted in almost complete suppression of new MS lesions in the central nervous system in some patients.

A larger follow-up study, called the MIRROR trial, has enrolled 232 people with MS and is comparing various subcutaneous doses of ofatumumab to placebo with regard to safety and impact on the accumulation of brain lesions and brain shrinkage, measured using magnetic resonance imaging (MRI).

Beyond MS, ofatumumab is also being developed for a rare and life-threatening autoimmune disorder of the skin called pemphigus vulgaris as well as rare eye disorder neuromyelitis optica.

The drug hasn't been a major commercial success for GSK, mainly because it failed to gain ground against rival anti-CD20 antibody Rituxan/MabThera (rituximab) from Roche, and last year the company reported a 37 per cent decline in sales to £54 million.

The size of Novartis' acquisition deal shows that the Swiss company is confident it can kick-start sales of the drug through new indications in cancer and autoimmune diseases.

Recent approval of the drug as a first-line treatment for CLL, along with a potential approval as a maintenance therapy in CLL and as a therapy for non-Hodgkin's lymphoma subtype follicular lymphoma, could help it gain ground on Roche's blockbuster.