Glaxo's HIV franchise has been hurting because of tough competition, with sales down 5% last year. Merck
Glaxo will own 85% of the yet-to-be-named company because it is donating most of the 11 drugs that the company will market. Pfizer's 15% stake would go up if the clinical-stage drugs that are added to the joint venture become successes, however.
Clearly, giving the sales reps more drugs to sell should create some efficiency, but the best part of joining forces is that the companies will be free to create combination pills from both their arsenals. Patients love the convenience of a single pill, and the virus hates the tag-team effort. For instance, sales for Gilead's and Bristol-Myers Squibb's
This really looks like a good deal for both big companies. Between the efficiencies, potential increased sales from combination drugs, and decreased development risk now that it is shared between the two, the combination is likely to be more successful than the two individuals could be.
Just don't name the new company GlaxoSmithKlinePfizer. Please.
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