The Business Times

Glaxo reaches US$2.2b dementia drug deal with Alector

Published Fri, Jul 2, 2021 · 09:34 PM

[LONDON] GlaxoSmithKline agreed to pay US biotech Alector as much as US$2.2 billion to develop therapies targeting diseases such as Parkinson's and Alzheimer's, the latest step by the UK pharmaceutical giant to rebuild its drug pipeline.

Alector will receive US$700 million upfront from Glaxo, and up to US$1.5 billion in the future if the treatments prove successful, the companies said Friday. They will co-develop and commercialise two monoclonal antibodies, one of which is in late-stage trials to tackle a form of dementia.

The therapies are part of an emerging field of research that tries to use the body's own immune system to fight neurodegenerative diseases. In this case, scientists are seeking to increase levels of a protein in the brain called progranulin, which helps regulate the immune response and affects the survival of neurons.

Chief executive officer Emma Walmsley is embarking on a long-planned transformation of the drugmaker that includes spinning off Glaxo's consumer health unit, paring the dividend and increasing the number of promising treatments in development.

She's also facing pressure from activist investor Elliott Investment Management, which laid out recommendations in an open letter Thursday to improve returns, including beefing up the pharma expertise in its top ranks. In a response Friday, Glaxo said the board "fully supports" Ms Walmsley's actions and expects a "step-change in performance and long-term shareholder value" after the company splits next year.

The Alector agreement follows a cancer deal with iTeos Therapeutics last month worth a potential US$2.1 billion to develop an immune therapy being tested against advanced solid tumors. Glaxo also struck an accord with US biotech Halozyme Therapeutics in June worth as much as US$740 million, giving the company access to technology that could enable longer dosing intervals for HIV drugs.

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Scientists have struggled for decades to find treatments for brain diseases like Alzheimer's, leading a number of companies to abandon their efforts. Yet the US approved an Alzheimer's drug from Biogen last month, despite questions over its effectiveness. Now drugmakers such as Eli Lilly are looking to follow suit with their treatments.

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