GSK offloads two vaccines in $1.1B deal as it works to revive the pipeline
GlaxoSmithKline is leaving the deep dark woods and its viruses behind.
GSK has agreed to divest its vaccines for rabies, RabAvert, and tick-born encephalitis vaccine, Encepur, to Bavarian Nordic, part of the company’s broader efforts to narrow its pipeline and focus on oncology and immunology.
The deal is worth up to nearly $1.1 billion, with a $336 million upfront payment. GSK acquired the vaccines from Novartis as part of an exchange for their late-stage oncology programs in 2015 under former chief Sir Andrew Witty.
It’s been an eventful year-plus for GSK’s vaccine enterprises. Shingrix, their shingles vaccine, has proven a blockbuster, pulling in nearly $1 billion through the first half of 2019 — selling so well, in fact, it led to shortages. Meanwhile, the British giant’s ViiV subsidiary shook Gilead’s stronghold on the HIV market with FDA approval for their two-drug regimen of Dovato and Juluca and some fortifying Phase III data.
In May, however, GSK unceremoniously cut two other vaccine programs, one for strep pneumonia and a candidate for the universal flu vaccine, in a Q1 review.
“Those two have been stopped, exactly as I have just been outlining, because of the early data that came through,” CEO Emma Walmsley told reporters at the time. “It is not something that’s worth pursuing and we want to be very strict on that, and that continues to build on quite an aggressive program of stopping assets when they need to be, and doubling down.”
That kind of ruthless adherence to data has become commonplace at GSK, since Walmsley took the CEO post in 2017 and Hal Barron took over the long-struggling R&D arm in 2018.
The new leadership has tried to winnow the pharma giant’s pipeline to refocus around key assets and acquire new ones where in-house compounds fall short. Most notably, they bought out Tesaro for $5 billion last December, acquiring not only their PARP inhibitor Zejula but also drugs to inhibit checkpoints PD-1, TIM-3 and LAG-3.
Investors recoiled at the sticker price and the amount of Tesaro debt GSK absorbed, precipitating the British giant’s largest slide in a decade, per Reuters. But Barron recently told Endpoints News the deal was crucial in rebuilding the aging company’s shaky pipeline.
“Frankly, they had 10 to 15 programs that they would have loved to have done but didn’t have the bandwidth, the scale, the resources for,” Barron told Endpoints News’ at the UK Bio Summit earlier this month. “So we came in and said frankly your programs you’re not doing are more valuable and interesting than the ones at the bottom of our efficiency frontier, so we killed 11 programs.”
Money from those 11 programs was funneled into Tesaro projects. It’s not yet two years into Barron’s tenure, but GSK’s leadership have thus far embraced the bloody job of pipeline cutting with free-axing glee, happily explaining to investors and reporters the long-term strategy behind the moves.
Since then GSK has only culled more, slashing an Ebola vaccine and two respiratory drugs, while betting unspecified millions on Rick Klausner’s $600 million cell therapy startup Lyell, which aims at solid tumors.
Meanwhile, the giant has slowly shifted the rest of the leadership team, bringing on cancer experts like Merck KGaA’s Maya Martinez-Davis and Novartis and AstraZeneca vet Jonathan Symonds. They’ve also paired up with 23andMe and with leading figures such as CRISPR-Cas9 pioneer Jennifer Doudna and Jonathan Weissman as part of Barron’s effort to reshape how the industry chooses drug targets, shifting from mice toward the human genome.
“We do these studies in isogenic mice and decide that some contrived model is useful for human diseases and frankly these are tiny little furry things that live 3 years and don’t have anything similar to our immune system,” Barron told Endpoints. “Then we convince ourselves that that’s a great target, we take it through and it fails 90% of the time.”