GlaxoSmithKline Acquires 18% Stake in Convergence

4 October 2010 (Last Updated October 4th, 2010 18:30)

UK-based GlaxoSmithKline has acquired an 18% stake in biotechnological company Convergence Pharmaceuticals, marking a new trend for outsourcing in the pharmaceutical industry. The group plans to transfer 14 researchers and rights to several patents on experimental drugs for analgesics i

UK-based GlaxoSmithKline has acquired an 18% stake in biotechnological company Convergence Pharmaceuticals, marking a new trend for outsourcing in the pharmaceutical industry.

The group plans to transfer 14 researchers and rights to several patents on experimental drugs for analgesics into Convergence, a company specialising in pain relief.

The aim is to increase productivity and, in turn, direct output of drugs by restructuring rather than cutting jobs.

Under the agreement, Convergence Pharmaceuticals acquired two clinical-stage assets together with rights to certain earlier-stage compounds in return for shares valued at $4.7mn.

The two clinical-stage compounds, formerly GSK1014802 and GSK2197944, target voltage-gated ion channels.

The news follows last week's announcement that French group Sanofi-Aventis will divest clinical services to US contract research organisation Covance.

Sanofi-Aventis head of development and research Marc Cluzel told the Financial Times that the alliance would help to preserve hundreds of valuable jobs while driving R&D efficiency.

Earlier this year, GlaxoSmithKline announced that it planned to preserve employment of 500 staff at a facility in Italy by selling the unit to Aptuit in the US.