"GlaxoSmithKline plc (GSK) today announces a deal in which it has reached agreement with PLIVA d.d. (PLIVA) for the purchase of PLIVA-Istrazivački Institut d.o.o (PLIVA Research - Institute Ltd.), PLIVA"s proprietary R&D arm renowned for its research into macrolides, in Zagreb, Croatia. The closing of the transaction is expected to occur during April 2006, subject to obtaining necessary regulatory approvals," GSK, a research-based pharmaceutical company with the headquarters in the UK, announced on its web site.
"Under the terms of the agreement, PLIVA will receive an upfront payment of USD 35m and, conditional on the entry of certain early stage projects into clinical development, contingent payments totaling up to USD 15m, thus the total potential cash consideration may be up to USD 50m. In addition, PLIVA will receive contingent royalty-based consideration pending commercialisation of certain assets. GSK will take on all 130 employees of the PLIVA - Research Institute and will gain full ownership of the company, including all intellectual property and certain other assets such as an oncology early-stage clinical asset and pre-clinical compounds emerging from the macrolide research," according to the GSK press release published on its web site on Tuesday.
PLIVA will reman the owner of the building housing the institute.
The Croatian company reported that after the sale of a majority of its proprietary in the United States and the sale of the research institute, it will now fully focus on its generics business.
Zeljko Covic, PLIVA's Chief Executive Officer was quoted by GSK as saying that Pliva "will continue to invest strongly into generics research and development where we currently employ about 450 dedicated R&D employees, whose work will remain a key success factor and foundation for the continued growth of PLIVA"s core business. We also believe that the fact that we have reached an agreement with a world class organisation such as GSK is recognition of the knowledge and scientific expertise of the Research Institute employees, and that this transaction will play an important role for the future of Croatian science."