GlaxoSmithKline purchases stake in Convergence Pharmaceuticals

GlaxoSmithKline has taken up a minority stake in a new healthcare company called Convergence Pharmaceuticals, which has been officially launched this week.

The firm has bought $4.7 million (2.95 million pounds) worth of shares in the biotechnology firm, which equates to an 18 per cent equity stake, as well as taking up an observer role on Convergence's board.

Convergence is financed by an international syndicate of European and US life science investors and is focused on the development of new analgesic compounds.

As part of the agreement, Convergence is also taking control of two clinical stage GlaxoSmithKline compounds which target voltage-gated ion channels, as well as certain product rights.

Should the development of GSK1014802 and GSK2197944 meet certain milestones, GlaxoSmithKline will be eligible to receive additional Convergence shares.

Last month, GlaxoSmithKline signed an agreement with industry supplier Lonza to assist in the manufacturing of a number of developmental compounds for clinical testing.