The two pharma giants behind ViiV Healthcare, GlaxoSmithKline and Pfizer, are each giving up ownership shares in their joint venture to Japanese-owned Shionogi, in exchange for exclusive global rights to assets that include the investigational medicine dolutegravir, a drug that has shown promise against HIV, and other early-stage integrase inhibitor compounds.

ViiV Healthcare will acquire exclusive development and commercialization rights to the integrase inhibitor portfolio, which the companies said will enable streamlining of R&D and commercial operations. ViiV is expected to position the drug as a competitor to HIV drugs marketed by Gilead Sciences.

In return, according to ViiV, Shionogi will receive a royalty on net sales of the integrase inhibitor portfolio averaging in the high teens. The royalty will apply to sales above certain minimum thresholds for a defined but undisclosed period post-launch, as the franchise is becoming established. After that period, the royalty will apply to all sales.

Shionogi will also become a 10% shareholder in ViiV Healthcare and will be entitled to a proportional share of ordinary dividends paid as well as representation on the ViiV Healthcare Board, and, for a defined but undisclosed period, will continue to have ongoing involvement in the formulation of the development and commercialization plans for the integrase inhibitor portfolio.

The deal will become effective on Oct. 31, and replaces the existing 2009 joint-venture agreement between ViiV Healthcare and Shionogi, under which GSK had an 85% share of ViiV and Pfizer, 15%. The new deal will leave GSK with a 76.5% share of ViiV, with Pfizer holding 13.5% of equity.

Previously, income from dolutegravir would have been shared 50:50 between ViiV and Shionogi, which would have given GSK only around a 40% interest in the drug. GSK’s economic interest has grown to between 60% and 66%, chief strategy officer David Redfern told Reuters.

Dolutegravir is scheduled to be submitted for regulatory approval in the U.S. and Europe by end of this year. Industry analysts have predicted the drug will be launched by late 2013, with sales ramping up to around $1 billion three years later, according to Thomson Reuters Pharma analyst estimates.

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