GlaxoSmithKline Buys Swiss Vaccines Firm for $321.4 Million

Updated May 29, 2013, 10:28 a.m. ET.

GlaxoSmithKline Buys Swiss Vaccines Firm .

By JESSICA HODGSON

LONDON—GlaxoSmithKline GSK.LN -3.14%PLC, the U.K.'s largest drug maker, is paying €250 million ($321.4 million) to buy a closely held Swiss company whose technology it hopes will speed up the development of vaccines in hotly pursued areas including hepatitis C, HIV and malaria.

GSK said Wednesday it would buy Okairos AG, which has a proprietary technology designed to stimulate the responses of t-cells, some of the body's most powerful natural disease killers.

The deal is driven primarily by GSK's interest in Okairos's tools for delivering genetic material into cells in order to stimulate these natural immune responses. These technologies can be applied across a broad range of vaccines, a GSK spokesman said. Okairos also gives GSK some vaccines at an early stage of development, in disease areas including HIV, hepatitis C, malaria, cancer and ebola.

Okairos's technology has already been tested on around 700 people in clinical studies, GSK said.

"This is a fantastic opportunity for patients and our research organization as it is expected to contribute to the development efforts for an exciting new generation of vaccines, building on the excellent science and expertise of both companies," said Christophe Weber, president of GSK's vaccines business.

Emmanuel Hanon, head of vaccines discovery and development for GSK, said Okairos's technology, like many vaccines, works by stimulating a particular t-cell in the human immune system called CD8+, which is very effective in killing disease cells. The significance of its technology, compared with older vaccines, is that it allows the cells to be matched to a much broader range of disease targets than older-generation vaccines that tend to be specific to a single disease.

"There are other technologies which target [CD8+] cells," Mr. Hanon said in an interview. "But Okairos's showed the highest level of maturity and is closer to full development and licensing than others."

GSK is one of the largest players in the vaccines business, which Deutsche Bank DBK.XE -1.59%estimates was worth $25 billion annually in 2011. GSK's vaccines business generated £3.3 billion in 2012, roughly 13% of its total group revenue. GSK makes vaccines for diseases including influenza, cervical cancer and rotavirus.

Though generally less profitable than prescription pharmaceuticals, vaccines are attractive to those drug makers that have scale in the business because they are complicated to make, have high barriers to entry and are less likely to be undercut by generic drug makers.

Commercially available vaccines for some diseases, including hepatitis C, HIV and malaria, remain elusive and potentially offer huge rewards for a company finding a breakthrough in these areas. Mr. Hanon declined to say how close he thought Okairos was to being able to launch drugs in these areas. But the company has two experimental vaccines—for hepatitis C and malaria—in phase two-stage clinical trials.

GSK is working on an experimental vaccine to target malaria, with the Gates Foundation. The drug, called RTS, S, has been shown to significantly cut the risk of malaria in children of five months and over, but its efficacy in younger infants was disappointing in trials published last year.

Okairos's backers include BioMedInvest, Novartis Venture Funds, the Boehringer Ingelheim Venture Fund, LSP and Versant Ventures.

Write to Jessica Hodgson at jessica.hodgson@dowjones.com

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