GlaxoSmithKline reaches deal with UK firm developing cancer treatments

A GlaxoSmithKline research centre in France. Photograph: Sipa Press/Rex Features

GlaxoSmithKline has struck a multimillion dollar deal with a British biotech firm to develop cutting-edge cancer treatments, after a new flurry of activity in the pharmaceutical sector.

Adaptimmune said that the deal could net it $350m (£209m) over seven years, as well as royalty payments on any products that get to market.

The Oxford-based firm, which develops cell therapies that help the body fight cancer, said trials in the US had shown encouraging results, while it was also poised to begin trials in Europe.

In April GSK agreed to sell its portfolio of cancer drugs to Novartis for $16bn, but left the door open to further oncology research.

GSK's tie-up with Adaptimmune comes as AstraZeneca announced promising results from early-stage trials of two ovarian cancer drugs.

When used in combination, olaparib and cediranib have been shown to stop the growth of tumours in women with the disease, AstraZeneca told investors at a oncology conference in Chicago at the weekend.

The drugs are among a number of promising treatments in the pipeline that the firm used to defend itself against an unwanted takeover by Pfizer, which was forced to drop its bid last week. As part of AstraZeneca's defence strategy its chief executive, Pascal Soriot, pledged a 75% increase in annual sales to $45bn (£27bn) by 2023, with the new cancer drugs playing a significant role in the forecasts.

Although the Pfizer bid failed, merger frenzy in the pharmaceutical sector continues, with reports that London-listed Shire is preparing a bid for NPS Pharmaceuticals, a US firm that has developed a breakthrough treatment for a debilitating bowel condition. The Times reported on Monday that Shire has lined up a $5bn credit facility from banks led by Citigroup to finance its takeover bid.

Shire, which is itself thought to be a target for acquisition, paid $4.2bn last year to acquire rare diseases specialist ViroPharma and its lucrative pipeline of products.

"We do not comment on rumour and speculation," said a spokesperson when asked about a bid for NPS Pharmaceuticals.

In a further sign of investor interest in life sciences, Imperial Innovations, an investment vehicle with a portfolio of 96 life science and technology firms, announced a fundraising drive to raise money for some of its most promising ventures.

The firm, which is listed on London's smaller AIM exchange, hopes to raise £150m from big institutional investors by the end of the month. Potential recipients of the funds include Veryan Medical, the third largest company in its portfolio, which grew out of a research project at Imperial College London.

Veryan has developed a stent – a metal mesh tube inserted in an artery – that mimics the natural swirl of the blood flow, which researchers have found improves outcomes for patients with circulation problems.

Another company to benefit from the fundraising drive will be PsiOxus, where researchers from Imperial College and the University of Oxford are developing treatments that use the body's immune system to destroy cancerous cells.

"We are investing more capital into companies we know well, where the technology has been de-risked somewhat," said Imperial Innovations' chief executive, Russell Cummings. Some of the funds will also be targeted at new companies, he added.

Imperial Innovations starts around four to six companies a year with its four partner universities – Imperial College London, Oxford, Cambridge, and University College London – but that number of startups could rise to eight.