Gilead Killer CC post-mortem:
My cynical take on the new GSK-PFE JV is that it’s a face-saving way for PFE to get out of the HIV business. For all practical purposes, the new JV will be GSK’s baby. To wit:
• The HIV arena is more important to GSK than to PFE in that GSK has a mature HIV franchise which is rapidly losing share to GILD.
• GSK will own 85% of the initial equity in the JV.
• The CEO of the JV and most of the BoD members will be from GSK.
• PFE executives did not even bother to show up for the CC.
Notwithstanding the above, I see the JV as bullish for IDIX because it provides several new ways for GSK to incorporate IDX899 into an all-in-one HIV pill that can compete with Atripla.
The only potential downside I see for IDIX in the JV is the possibility that GSK might drop IDX899 in favor of PFE’s UK-453061, another NNRTI. However, I think this is unlikely given that GSK shelled out $34M (half in IDIX equity) to license IDX899 two months ago. Hence, if the JV decides to drop one of the two NNRTI programs, IDX899 will likely be the one that is kept, IMO.
“The efficient-market hypothesis may be
the foremost piece of B.S. ever promulgated
in any area of human knowledge!”
