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LONDON, Dec 18 (Reuters) - Pharmaceutical groupGlaxoSmithKline said its majority-owned HIV businesswould buy drugs at different stages of development from U.S.rival Bristol-Myers Squibb for an initial $350 million.
GSK said the acquisitions would provide ViiV Healthcare, itsHIV unit in which Pfizer and Shionogi are juniorpartners, with new opportunities for growth.
The British company is reviving its position in HIVtreatment as part of its strategy to return to earnings growthin 2016.
It used to dominate the market but ViiV's 2014 sales of 1.5billion pounds ($2.3 billion) were less than a quarter of theHIV revenue generated by market leader Gilead Sciences.
ViiV will pay an initial $317 million to buy late-stage HIVdrug candidates from Bristol-Myers, including a phase IIIdevelopment treatment fostemsavir, plus $33 million for itspreclinical assets.
Both deals are subject to a further payment of over $500million dependent on commercial milestones being met.
GSK said the assets being acquired complemented ViiV'sexisting portfolio and could be used in combination therapies.
HIV is often treated by mixing at least three medicinestogether because of the ability of the virus that causes AIDS tomutate and become drug-resistant.
"The addition of two potential first-in-class late-stagetreatments and several promising early clinical developmentprogrammes strengthens ViiV Healthcare's pipeline and providesus with further new opportunities for growth," said GSK's chiefstrategy officer David Redfern, who is also chairman of ViiV.
Demand for HIV drugs is helping GSK replace declining salesof its market-leading respiratory medicine Advair is in decline.
Shares in GSK were flat at percent at 1,341.5 pence at 0831GMT.
(Reporting by Sarah Young, Editing by Paul Sandle)