GSK share price: Amgen ends marketing agreement with UK drugmaker

on Apr 4, 2014
Updated: Apr 9, 2020
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iNVEZZ.com, Friday, April 4: US drugmaker Amgen Inc (NASDAQ:AMGN) has said it would end an agreement with GlaxoSmithKline Plc (LON:GSK) for the marketing of an osteoporosis drug in certain regions. The termination of the agreement will see Amgen pay GSK $290 million (£175 million).

GSK’s share price has added 0.4 percent in London so far today.
**Amgen ends osteoporosis drug agreement with GSK**
California-based Amgen revealed yesterday in a filing with the US Securities and Exchange Commission (SEC) that as of April 1, it had entered into a termination and transition agreement with GSK relating to the marketing of osteoporosis drug denosumab in certain geographic territories.

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Amgen said that it would take over the marketing of the drug in the European Union, Switzerland, Norway, Russia and Mexico by the end of the year. GSK will continue to market the drug in Australia. The early termination will see Amgen pay GSK an initial $275 million over the transition period, and another $15 million as reimbursement for costs incurred by the UK drugmaker during the transition period.

Reuters quoted a GSK spokesman as saying in an e-mailed statement that the two companies had “reached a mutual agreement to end their existing agreement”.
“This new arrangement will allow GSK to increase focus on executing important new product launches over the next few years,” the spokesman added.
The two companies signed the collaboration agreement in 2009, with Amgen retaining the rights to market the drug in the US and Canada as a treatment for osteoporosis and other conditions, and for oncology indications in Europe and specified markets.

**Glaxo said to be cutting staff in China**

The Wall Street Journal today quoted an unnamed source with knowledge of the matter as reporting that GSK was cutting employees in China where the company is engulfed in an ongoing bribery probe.
The source told the WSJ that the UK company had dismissed employees in China in recent months following increased monitoring of employee expense claims.

Last year, Chinese officials alleged that GSK had funnelled more than 3 billion yuan (£323 million) to doctors and health officials to persuade them to prescribe its drugs. GSK had allegedly used travel agencies as conduits to pass the bribes. (GSK Share Price: Chinese VP of Operations Confesses to Bribery)
**Credit Suisse reaffirms GSK as ‘underperform’**
Analysts at Credit Suisse today reiterated their ‘underperform’ rating on the UK drugmaker with a price target of 1,600p. Citigroup yesterday reaffirmed its ‘neutral’ rating on the stock with a price target of 1,810p, while JPMorgan Chase & Co, which also has a ‘neutral’ rating on the FTSE 100 company, lowered its price target from 1,750p to 1,700p.
GSK currently has a consensus ‘hold’ rating and an average price target of 1,714.22p.
**As of 13:10 BST, buy GSK shares at 1584.50p.**
**As of 13:10 BST, sell GSK shares at 1584.30p.**

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