GlaxoSmithKline awarded $63 million HHS contract for pandemic vaccine research and development

Company begins government and retail shipments of its antiviral Relenza®

Philadelphia, PA – January 17, 2007-- GlaxoSmithKline [NYSE: GSK], one of the world’s largest vaccine manufacturers, has been awarded a contract from the U.S. Department of Health and Human Services (HHS) for the development of pre-pandemic and pandemic flu vaccines. With a value of at least $63.3 million, the contract supports GSK’s ongoing pandemic vaccine research in using the company’s innovative adjuvant technology in combination with antigens to induce a strong immune response.

Under the terms of the contract, GSK will engage in research and development leading towards licensure of antigen-sparing pre-pandemic and pandemic vaccines with adjuvant that will help the US Government extend the limited North American supply of pandemic flu vaccines to protect larger populations in the event a flu pandemic. The 5-year contract also gives the US Government the option to fund an additional $44 million of future clinical development programs related to antigen-sparing pandemic vaccines.

“A limited global supply capacity of flu antigen makes it critical that we use innovative adjuvant system technology to produce a new generation of flu pandemic vaccines,” said David Stout, President of Pharmaceuticals at GlaxoSmithKline. “GSK’s research in adjuvant technology over the past two decades uniquely positions our company to develop adjuvants designed to boost immune response and give broader protection while using smaller amounts of antigen. This award leverages our adjuvant expertise, and supports GSK’s short and long-term vision of helping governments around the world in their pandemic preparedness efforts.”

In a separate action related to pandemic preparedness GSK also announced that the company has begun shipping up to 15.5 million treatment courses of its antiviral Relenza®(zanamivir for inhalation). The Relenza shipments are part of GSK’s agreement with the Federal Government announced last year to provide the US Government and the states with Relenza for building their flu pandemic stockpiles. GSK also has started to ship Relenza to retail pharmacies to fulfill patient prescriptions for seasonal flu treatment and prevention.

About GlaxoSmithKline

GlaxoSmithKline is one of the world’s leading research-based pharmaceutical and health care companies, and is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For company information visit: www.gsk.com.

About GSK Biologicals

GSK Biologicals, based in Rixensart, Belgium, is the vaccine division of GlaxoSmithKline. As one of the world’s leading vaccine manufacturers, GSK Biologicals employs more than 1,500 scientists devoted to discovering new vaccines and developing more cost-effective and convenient combination products to prevent infections that cause serious medical problems.

Editor’s Note

GSK’s 2005-2007 Milestones in Pandemic Preparedness

* January 2007: GSK begins supplying its antiviral, Relenza® (zanamivir for inhalation), to the U.S.government and begins working with private-sector businesses and other organizations to provide Relenza as part of their business continuity planning.

* December 2006: GSK received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) for its candidate alum-adjuvanted pandemic vaccine. GSK plans to submit a file to the European regulatory authorities in the coming weeks for the licensing of both a pandemic and a pre-pandemic vaccine with our proprietary adjuvant system technology.

* November 2006: GSK received a $40 million initial order for bulk H5N1 antigen from HHS.

* 2006: GSK signs contracts with several countries for pre-pandemic vaccines.

* September 2006: GSK reached an agreement with the Simcere Pharmaceutical Group of Nanjing, China, granting the right to manufacture and sell the anti-viral influenza treatment zanamivir in China, Indonesia, Thailand, Vietnamand all Least Developed Countries.

* July 2006: Clinical studies announced by GSK showed promising preliminary results on the potential immunogenicity of a vaccine for pandemic flu using a GSK novel proprietary adjuvant system.

* May 2006: GSK received an award of $274 million to develop cell-culture technology to speed the development of new cell culture-based seasonal and pandemic influenza vaccines, and to scale-up cell culture manufacturing capability at GSK’s Marietta, PAsite.

* 2005: GSK made three important acquisitions in North America: a vaccine manufacturing site in Marietta for cell-culture-based flu vaccines and secondary operations; Corixa Corporation, for its work in developing innovative adjuvants designed to stimulate immunity; and ID Biomedical, which offered a significant increase in flu vaccine manufacturing capacity to help address both seasonal and pandemic influenza threats.

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