Pharma Giants Swap Research Programs

Pharmaceutical giants Novartis and GlaxoSmithKline (GSK) agreed in late April to swap some assets, with Novartis handing off its vaccine business to GSK and getting most of the British company's cancer portfolio in return. More than $20 billion worth of assets will change hands in the deal, which both sides touted as a win.

“Our acquisition of GSK oncology products is expected to further reinforce our leading oncology business and improve the growth profile of the combined portfolio,” says Liz Power of Novartis Group Media Relations.

Power says the deal will expand Novartis's position in targeted therapies, small molecules, and immune therapy, especially in melanoma, thanks to GSK's two recently approved products for metastatic melanoma, Tafinlar (dabrafenib), a BRAF inhibitor, and Mekinist (trametinib), a MEK inhibitor.

This business deal is better than most, according to Bruce Booth, PhD, who follows the life sciences industry as a partner at Atlas Venture, a Cambridge, Massachusetts–based venture capital firm.

“In particular for Novartis, they will be better positioned in oncology longer term,” he says.

As combination therapies become more important, Booth says, so will a deep and diverse portfolio of oncology drugs. Companies that can test combinations in-house and offer patients a full range of drugs will have an advantage, he says.

“In a cancer care world of the future, where combination therapies with multiple targeted agents are being customized to the patient, pharma companies with a deeper inventory of assets to efficiently combine into a broader care regimen will be able to deliver better care,” says Booth.

However, increasing concentration may have a downside, according to Michael S. Kinch, PhD, managing director of the Yale Center for Molecular Discovery in New Haven, CT. In addition to the Novartis–GSK deal, Pfizer has been trying in recent weeks to buy competitor AstraZeneca.

Companies hope that if they specialize they will reduce overhead, build internal expertise, and corner markets, says Kinch, whose expertise is in immunology and cancer biology. Yet, he thinks the resulting lack of interdisciplinary experience will also hurt innovation in the long run.

For example, Kinch says that AZT, the powerful AIDS medication, would not have been discovered if Burroughs Wellcome (later absorbed by GSK) hadn't had an oncology department as well as AIDS researchers.

“AZT was a failed oncology drug,” he says. “The folks at Burroughs Wellcome looked at AZT and said, ‘Ah, this has activity against HIV.’ Cross-disciplinary [expertise] allowed that to occur. We're going to lose that ability.”