GSK will sell its entire shares of Innoviva, its partner manufacturing respiratory drugs, for approximately $392 million, as it is moving forward with a decision to part its ways from the company by next year.
GSK has been a long-term investor in Innoviva, a Royal management firm that works with GSK on respiratory medications, including Breo Ellipta, Trelegy Ellipta, and Anoro Ellipta. GSK, on the other hand, is selling its shares to use the money to “ make further investment behind the group strategic priorities.”
GSK pays Innoviva royalty payments, as an important part of their collaboration, for important respiratory medications that are used to treat diseases such as bronchitis, asthma, emphysema, and COPD (Chronic Obstructive Pulmonary Disease).
Although GSK would no longer be a shareholder of the company, the terms of the agreement between the two would “ remain unchanged”, the partners stated in a statement released on Thursday. GSK had previously been a major shareholder of Innoviva.
GSK will resell 32 million of its shares to Innoviva, which is approximately 32% of the company, at a markdown price of 3%, or $12.25/share, according to the terms of the sale contract.
The CEO, Pavel Raifeld stated, “Innoviva is confident in the collaboration products’ excellent commercial prospects, especially given strong recent performance in the face of a challenging environment.”
GSK has decided to sell its entire shares in Innoviva because the firm aims to streamline its business before its partition from Innoviva in 2022. The reorganization, which was started by CEO Emma Walmsley, will split the company into two different firms, with one company focusing on biopharmaceuticals and the other firm on consumer items.
In a call with the experts in late April, Emma Walmsley stated that the separation was “well underway” and that it would be completed by 2022. GSK has the intention to hold a meeting by the end of June to present “ a clear view of the strategy” for the restructured firm, highlighting the growth potential and timeline updates.
GSK’s sales have been indeed impacted by the COVID-19 outbreak and worldwide vaccine deployment, particularly for Shingrix, its groundbreaking shingles vaccine. In the first quarter, the company posted revenue of $10.28 billion, dropping 18% from the very same quarter of the previous year.