Pliva reaches agreement with GlaxoSmithKline, exits from proprietary business

By Lisa Kerner

Erie, Pa., Feb. 14 - Pliva d.d. said it has reached an agreement with GlaxoSmithKline for the purchase of Pliva - Research Institute Ltd., Pliva's proprietary research and development arm known for its research into macrolides.

Pliva had announced in May 2005 its intent to exit the proprietary business to focus completely on its generics operations, according to a company news release.

Following the divestments of the majority of Pliva's U.S. proprietary business and Research Institute in Zagreb, Croatia, the company has completed its strategic objective.

Under the terms of the agreement, Pliva will receive an upfront payment of $35 million and contingency payments up to $15 million based on moving certain early stage projects into clinical development. Pliva will also receive royalties on commercialization of certain assets, the release stated.

GlaxoSmithKline will absorb all 130 Pliva - Research Institute employees and gain full ownership of the company, including all intellectual property and other assets.

Pliva will retain ownership of the building, under a long-term lease to GlaxoSmithKline.

The transaction is expected to close in April.

Pliva is a specialty pharmaceutical company based in Zagreb, Croatia.

GlaxoSmithKline is a research-based pharmaceutical and health care company based in London.

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