GSK in £750m Chroma deal

Jun 24 2009 by Iain Laing, The Journal

PHARMACEUTICALS giant GlaxoSmithKline has signed a deal worth up to £750m with Chroma Therapeutics Ltd to develop new drugs.

GlaxoSmithKline, which has more than 1,000 staff in the North East, said that Oxford-based Chroma will undertake four programmes to identify new drugs for inflammatory disorders including rheumatoid arthritis.

Chroma will receive a significant but undisclosed cash payment up front and GlaxSmithKline has invested a second undisclosed amount as part of a £15m fundraising announced by Chroma yesterday.

Chroma is eligible to receive developmental and regulatory milestone payments, royalties on any future sales and other fees totalling $1bn, assuming all four programmes are successful.

The move boosts Glaxo’s early-stage pipeline but will not deliver products to the market for some years as Chroma’s inflammation programmes have yet to enter clinical development, according to the company’s website.

Chroma’s potential drugs target macrophages -- a type of large white blood cell that plays a key role in the immune system.

Glaxo said in its annual results earlier this year that it is looking to increase its annual cost reductions from £700m to £1.7bn by 2011 as a way of seeing it through the continuing slump.

It has already said it is losing 2,000 positions in the UK out of the 10,000 roles axed globally since 2007. It has around 1,000 staff in Barnard Castle in County Durham and 300 more in Cumbria.