GSK, GENMAB FORM AGREEMENT POTENTIALLY WORTH $2.1 BILLION

GlaxoSmithKline (GSK) and Danish drugmaker Genmab have announced a worldwide agreement to co-develop and commercialize Genmab's HuMax-CD20 (ofatumumab), a fully human monoclonal antibody in development for treating CD20-positive B-cell chronic lymphocytic leukemia, follicular non-Hodgkin's lymphoma and rheumatoid arthritis.

Under the terms of the agreement, Genmab will receive a license fee of approximately $102 million, and GSK will invest $357 million to purchase more than 4.4 million ordinary shares of Genmab. The total potential value of this agreement could exceed $2.1 billion, including the initial license fee and equity purchase, milestone payments of approximately $1.6 billion and expected development, commercial manufacturing and commercialization costs. In addition, Genmab will be entitled to receive tiered double-digit royalties on global sales of HuMax-CD20.

GSK will receive an exclusive worldwide license to HuMax-CD20 as well as any other antibodies with affinity for the CD20 antigen that Genmab may develop. Genmab will be responsible for development costs until 2008, including costs of the two ongoing late-stage oncology studies, after which development costs will be shared equally between the companies. GSK will be solely responsible for the manufacturing and commercialization of the drug.

Genmab will have an option to co-promote HuMax-CD20 in oncology in the U.S. and Scandinavia. The agreement is subject to review by the U.S. government under the Hart-Scott-Rodino Act.