The old company, trying hard

Rico says he had a lot of good years (and made good money) at GSK, so it's good to see them working hard on a hard problem, as Javier Espinoza's article on Forbes.com notes:

British drugmaker GlaxoSmithKline is teaming up with American rival Pfizer to secure a fifth of the market for treatments against the HIV virus, helping to contain Glaxo's falling HIV drug sales and paving the way for similar arrangements in the pharmaceutical sector.
Under the agreement, Glaxo will have an initial 85.0% stake in the joint venture while Pfizer will hold a 15.0% stake. The new company, which is still unnamed, will be based in London, and will have an initial working capital of 250 million pounds ($370 million).
Both drugmakers said the new company, which will be headed by Glaxo’s Dominique Limet, would grant them a 19.0% share of the growing market for HIV/AIDS treatment. There are approximately 33 million people infected with the AIDS virus worldwide, according to the United Nations. The British drugmaker said it expected earnings per share dilution of approximately 1.0% to 2.0% in 2010 and 1.0% in 2011 as a result of the transaction. The transactionwould be neutral to Pfizer's earnings in 2009 and slightly accretive in 2010 and 2011, Glaxo said in a press release.
Raymond James analyst Eric Le Berrigaud said on Friday that although the deal would not be financially meaningful in the near future for Glaxo, it had the potential to translate into "meaningful numbers” by 2014. “In having access to Pfizer’s research and development [of AIDS treatment], Glaxo will try to mitigate the downward trend of its HIV/AIDs sales as its patents will start expiring over the next five years,” Le Berrigaud told Forbes.
The analysts said Glaxo currently sells an estimated 1.5 billion pounds ($2.2 billion) in AIDS treatment annually, but sales are expected to fall to only 500 million pounds ($740.3 million) by 2014 because of patent expirations. “If this deal is successful, it could perhaps add another half billion [to Glaxo’s sales]. So instead of dropping by two-thirds in 2014, sales will drop only by one third.”
Le Berrigaud said this deal would pave the way for similar arrangements in the pharmaceutical industry, which has seen a dramatic decline in innovation. “There could be other cases where a big drug company doesn’t have all the strength in hand to secure its own future in research and development.”
Meanwhile, Andrew Witty, Glaxo’s chief executive, said similar partnerships would take place in the industry instead of larger mergers and acquisitions. "We're not interested in a classic big piece of M&A in the pharmaceuticals sector," he said. “We are very focused on bolt-on acquisitions or innovative deal structures which allow us to build more efficient business models. I don't think you should look at this as a template for how we plan to do other things, but it is certainly an example.”
Shares of GlaxoSmithKline fell 0.8%, or 8.00 pence (11 cents), to 10.27 pounds ($15.21) in morning trading in London, while shares of Pfizer rose 0.1%, to $13.90 in pre-market trading in New York.

Rico says he wishes them, and the AIDS patients who will benefit, well.