The companies have worked together since 2008 in a pair of strategic drug discovery alliances. The first was announced in September 2008, focused on the discovery, development and marketing of novel kinase-targeted therapeutics for inflammatory diseases. The alliance gained GSK access to Cellzome’s Kinobeads technology, and set Cellzome up to be eligible for several success-based milestone payments. The second alliance was announced in March 2010, also focused on inflammatory diseases, and gained GSK exclusive access to Cellzome’s Episphere technology. The acquisition will allow GSK to apply Cellzome’s technology platforms across its entire portfolio, rather than just in immunoinflammatory disease indications.  

 

“We are pleased to announce this transaction, which will enable GSK to progress the technologies that we have been developing for more than a decade,” Tim Edwards, CEO of Cellzome, said in the news release announcing the deal. “This follows nearly four years of successful collaboration with GSK, during which time we demonstrated the value and breadth of the Cellzome platform for drug discovery.”

 

Zacks Investment Research acknowledged the likelihood that adding Cellzome’s proteomics technologies would enable better analysis of a drug’s efficacy and safety profile, thus reducing the number of discontinued candidates in development phases for GSK, but the prospect of folding Cellzome into GSK's R&D organization and spinning off a new company did nothing to change Zacks' "Neutral" rating on GSK.

As Zacks notes, "a major part of Glaxo’s revenues will be exposed to generic competition as multiple drugs are scheduled to lose exclusivity in the next few years. We expect the company’s top line as well as gross margins to remain under pressure in the coming quarters."

In addition to generic competition, U.S. healthcare reform and E.U. pricing pressure will continue to affect sales, notes Zacks, which seems more focused on Glaxo's recent hostile bid to acquire the outstanding shares of Human Genome Sciences Inc. as opposed to the Cellzome deal. As Zacks notes, that acquisition would gain Glaxo exclusive rights to Benlysta as well as other candidates such as darapladib and albiglutide. "The acquisition will raise the returns on research and development expenses for Glaxo and lead to cost synergies of minimum $200 million by 2015. We believe this potential takeover would be accretive for the company from 2013," Zacks says.