Updated from 5:43 a.m. EDT
confirmed they plan to combine their HIV-drug businesses into a new company.
Glaxo will get 85% of the joint venture and Pfizer 15%.
The deal allows the two companies to merge their strengths in the HIV drugs business -- Glaxo is a big seller of HIV treatments but its products are relatively old and its pipeline of future drugs also is relatively weak. Pfizer, on the other hand, has a significant store of drugs in development but few products on the market.
The two companies said that the new business "will be more sustainable and broader in scope than either company's individually," adding that it will hold a 19% share of the growing market.
The new company will have a broad product portfolio of 11 marketed products including market-leading therapies such as Combivir, Kivexa and Selzentry/Celsentri. Based on 2008 results, the combined portfolio generates sales of around 1.6 billion pounds ($2.4 billion).
The companies said revenue at that level will provide the new company with financial stability and support investment in its pipeline.
"By combining Pfizer's and GlaxoSmithKline's complementary strengths and capabilities, we are creating a new global leader in HIV and reaffirming our ongoing commitment to the treatment of the disease," said Pfizer CEO Jeff Kindler in a joint statement issued to the London Stock Exchange.
The company will have a pipeline of six innovative and targeted medicines, including four compounds in phase II development. Altogether, the new company will have 17 molecules at its disposal to develop in fixed-dose combinations as possible new HIV treatments.
The new company will contract research and development services directly from Glaxo and Pfizer to develop new medicines.
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