GlaxoSmithKline (GSK) is selling its travel vaccines Rabipur and Encepur to Danish biotech Bavarian Nordic. The vaccines were acquired from Novartis in 2015. Rabipur is for preventing rabies while Encepur is used to prevent tick-borne encephalitis. 

The sale is expected to complete by the end of 2019, subject to anti-trust clearance and the approval of Bavarian Nordic’s rights issue by its shareholders.

GSK said the divestment supports its strategic intent to increase focus and reinvest in growth assets, innovation and a simplified vaccines supply chain. “This agreement with Bavarian Nordic will enable us to commit greater resources to our key growth assets and to our R&D pipeline while also ensuring the continued supply of these important and successful vaccines,” said Roger Connor, GSK’s president, global vaccines.

Under the terms of the transaction, GSK will receive an upfront payment of about €301 million as well as milestone payments of €495 million and additional proceeds from the sale of inventory, for a total consideration of up to €955 million. The value of the inventory at the anticipated closing date is estimated to be €159 million. A sum amounting to €25 million out of the total consideration is conditional upon both vaccines’ future sales performance.

The milestone payments are contingent upon the successful transfer of technology and marketing authorizations and the fulfilment of GSK’s supply commitments until Bavarian Nordic receives regulatory approval to manufacture the vaccines.

To ensure continuity of supply, the two vaccines will continue to be manufactured primarily at GSK’s site in Marburg, Germany, until full production is transferred to the Danish company.

The staged technology transfer is expected to start in the first quarter of 2020 with completion anticipated within five years.