GSK and ChemoCentryx enter $63.5M R&D accord

UK drug major GlaxoSmithKline and privately-held USA-based ChemoCentryx, have entered a worldwide multi-target strategic alliance to discover, develop and market novel medicines targeting four chemokine and chemoattractant receptors for the treatment of a variety of inflammatory disorders, including Traficet-EN in late-stage development for the treatment of inflammatory bowel disease. This accord provides GSK access to ChemoCentryx' selected targets, which the UK firm believes is one of the broadest pipelines of chemokine-based therapeutics in the industry. On the day of the news, August 24, GSK's American Depositary Shares rose $0.76 to $54.67 in mid-day trading.

As part of the deal, ChemoCentryx will receive an upfront payment of $63.5 million comprised of cash and an equity investment in the form of a Series D financing, as well as R&D funding and milestones potentially worth up to $1.5 billion across six product options on the four targets, assuming successful development and commercialization. ChemoCentryx will also receive double-digit royalties on all collaboration product sales and will be able to increase royalties in certain instances by co-funding development through Phase III clinical trials. Furthermore, under certain circumstances, upon an initial public offering by ChemoCentryx, GSK will invest in the firm's common stock.

Under the terms of the agreement, ChemoCentryx will be responsible for the discovery and development of small-molecule drug candidates through clinical proof-of-concept, at which point GSK will have exclusive options to license each product for further development and commercialization on a worldwide basis.