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After 2 Licensing Deals Will GlaxoSmithKline Acquire Vir?

By Brian Orelli, PhD and Keith Speights - Mar 6, 2021 at 8:00AM

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The relationship could result in a marriage down the line.

Vir Biotechnolgy (VIR -4.06%) and GlaxoSmithKline (GSK 2.20%) recently expanded their partnership from a single drug to treat COVID-19 to a multi-drug partnership that covers a drug for the flu, as well as drugs that Vir hasn't even developed yet. In this video from Motley Fool Live, recorded on Feb. 22, Fool.com contributors Brian Orelli and Keith Speights discuss whether the expanded partnership could eventually result in GlxoSmithKline buying Vir outright.

Brian Orelli: Do you think Glaxo might just buy Vir outright at some point?

Keith Speights: Yeah. I think it's a real possibility. There are some impediments there that could get in the way. Vir also has some collaborations going on with Alnylam Pharmaceuticals (ALNY 0.82%), ticker there is ALNY, also another collaboration with Gilead Sciences (GILD 0.80%), huge biotech, ticker there's GILD. That could complicate things a bit. Vir and Gilead are working together to develop what they're calling a functional cure for hepatitis B. Vir and Alnylam are working together on RNA interference therapy targeting COVID. Those could be issues, perhaps, if GlaxoSmithKline was interested in acquiring Vir down the road. I think probably the bigger issue might be Vir's deal with Gilead because Glaxo and Gilead are competitors on several fronts, they both market HIV therapies that compete against each other. They're both developing hepatitis B virus therapies, so that might be an issue, but I think if GlaxoSmithKline really wanted to acquire Vir down the road, neither one of those deals would necessarily block them from doing so.

Orelli: They can always just work a deal out to give the assets to Gilead or something, if they really didn't want to work with them.

Speights: If they want it bad enough, they can make it happen.

Orelli: Exactly.

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Stocks Mentioned

Vir Biotechnology, Inc. Stock Quote
Vir Biotechnology, Inc.
VIR
$24.84 (-4.06%) $-1.05
Gilead Sciences, Inc. Stock Quote
Gilead Sciences, Inc.
GILD
$63.08 (0.80%) $0.50
GSK Stock Quote
GSK
GSK
$43.69 (2.20%) $0.94
Alnylam Pharmaceuticals, Inc. Stock Quote
Alnylam Pharmaceuticals, Inc.
ALNY
$147.50 (0.82%) $1.20

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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