Five Prime Therapeutics partners with Glaxo

Five Prime Therapeutics

Private drug developer Five Prime Therapeutics Inc has reportedly entered a partnership with pharma giant GlaxoSmithKline said to be worth $139 million.

In the new deal, GlaxoSmithKline will have the option to develop any drugs previously discovered by Five Prime as treatments for skeletal muscle disorders like sarcopenia and cachexia.

Five Prime Therapeutics has said it will receive $15 million from the pharma giant this year, but the sum will be composed of upfront payments, the purchase of Five Prime equity by GlaxoSmithKline and any payments relating to research.

Five Prime Therapeutics specialises in drugs for skeletal muscular disorders such as sarcopenia, which is the loss of muscle mass, strength and function related to age. Cachexia is wasting and loss of weight and muscle mass caused by diseases like cancer and AIDS.

With research currently looking into alternative treatments, Five Prime Therapeutics, which is based in San Francisco, is set to receive additional research payments for the next two years as well as up to $124 million in option and milestone payments.

On top of that, if any of the new drugs are successfully developed and approved for sale, Five Prime will get royalties on sales.

In comparison, GlaxoSmithKline is one of the world's biggest drug manufacturers. Based in London, it has the option to license the drug candidates and take over preclinical research and development and clinical testing, along with sales if the products are approved.

Profit slump

GlaxoSmithKline was recently hit with poor profits for the quarter, reporting a massive 92 percent decrease due to legal costs over lawsuits regarding their Avandia diabetes medicine and the Paxil antidepressant.

Restructuring costs also reportedly affected the company's bottom line, which saw a pre-tax loss of £97 million, compared with a profit of £2 billion for the same period last year.

In a statement, Chief Executive Andrew Witty said the company's main businesses were performing well in the face of challenges, including generic competition to herpes drug Valtrex in the United States and mounting pressure on drug prices in Europe.

Relevant articles:

Glaxo profits fall by 92% | Avandia GlaxoSmithKline face £1.5bn legal bill | Sanofi-Aventis to acquire US firms? | Being short increases risk of heart disease | Roche's diabetes drug faces long delay

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