Novartis & GSK trade assets in strategic resuffle

Novartis and GlaxoSmithKline (GSK) have announced a definitive agreement to exchange certain assets, building global leadership in key segments and focusing the company’s portfolio.

Novartis has agreed to acquire GSK oncology products for a USD 14.5 billion payment and up to USD 1.5 billion contingent on a development milestone. Under the terms of the transaction, Novartis would have opt-in rights to GSK’s current and future oncology R&D pipeline.

in return, GSK will acquire Novartis’ vaccines business, currently excluding its flu business, for USD 7.1 billion plus royalties. The USD 7.1 billion consists of USD 5.25 billion upfront and up to USD 1.8 billion in milestones.

The companies have also agreed to create a consumer healthcare business through a joint venture. Upon completion, Novartis will own a 36.5% share of the joint venture and will have four of eleven seats on the joint venture’s Board.

Separately, Novartis announced a deal with Eli Lilly to divest the Animal Health Division.