Multivalent mRNA vaccines, I/O 3.0, long-acting HIV drugs: The $46B game is on for the new GlaxoSmithKline
To understand the new GlaxoSmithKline that Emma Walmsley is promising to usher in, one must see through the old GSK.
“We know this has been a company that has perennially disappointed when you look at the first half of the last decade,” the CEO said in one of her final remarks at the long-anticipated investor day.
But after four years of strategic transformation and investment, her top team is ready to take the wraps off a shiny new version of the Big Pharma that, among other things, will strive to deliver £33 billion ($46 billion) in annual sales by 2031. It will start with a planned demerger of the consumer health business into a separate company in the middle of next year, while the new GSK retains a 20% stake as a “short-term financial investment.”
The majority of the revenue should come from current late-stage projects, handpicked by R&D chief Hal Barron in consultation with chief commercial officer Luke Miels.
The end goal? A “step change” in performance to revitalize the business around new vaccines and specialty medicines — two areas that are now intertwined as prevention and treatment converge.
For anyone who’s been following the R&D roadmap that Barron laid out in 2018 after taking over, it can sound like more of the same. Sure, the separation of the consumer health business might be the most significant change for GSK in two decades; yet the company is stubbornly consistent about what it will take to thrive in the future. It’s still about the science of the immune system, the understanding of functional genomics, some machine learning or artificial intelligence, as well as a healthy diet of bolt-on and licensing deals to enhance all those areas.
The difference could be that the clock is ticking. Amid threats of an activist attack and calls for greater reform, Walmsley, Barron and others are under serious pressure to deliver, and every blunder or setback could be magnified.
But if they succeed, the new GSK will make a mark and create lasting franchises across infectious disease, HIV, oncology and immunology. And they’ve brought in fresh blood to execute: According to Walmsley, “85% of our top 125 leaders are new in roles since 2017, including 30% recruited externally.”
Now that they are wrapping up a drastic restructuring that led to massive layoffs, she added, there are no near-term plans for another round. It’s showtime.
Beyond Covid-19 vaccines
GSK may have fallen behind on the global hunt for a Covid-19 vaccine, but it’s very much looking to get in the next-gen game.
Like rivals at Pfizer (and current partners at Sanofi), GSK wants to be at the forefront of mRNA, according to Roger Connor, president of global vaccines — which is why they’ve recruited more than 200 scientists to focus on this area and teamed up with Germany’s CureVac to create multivalent vaccines not just for Covid-19 but also for influenza.
Despite the disappointing results around a Covid-19 vaccine made from the first generation of technology, the pharma clearly sees a future in the second-generation version of the tech.
I think the key thing to remember at least our view is that the future for mRNA vaccines are going to be multivalent. Multivalency requires a lower dose because you can’t give a certain amount of mRNA without creating reactogenicity. So if you’re going to use multivalent vaccines, you gotta get the number of micrograms per valence down. What CureVac’s second-generation, I think, is telling us is that when you optimize the untranslated regions on each side, the 5’, 3’, you get more efficient translation, more protein produced.
While Shingrix currently headlines the portfolio, GSK is also hoping its vaccine for RSV — created from the same platform — would do just as well, with broad reach to both older adults and pregnant women (to prevent infections for their newborns). As with meningitis, Connor suggested that these are examples of pathogens where older technologies may still have a role to play over mRNA.
HIV, cancer, and some wild cards
One thing that the new GSK will likely do is to keep dropping hints about its interests through deals.
ViiV Healthcare, the HIV-focused subsidiary, made its goal clear as it inked a deal with Halozyme earlier this week: to create ultra long-acting regimens that will completely change how people live with the virus.
The first drug to do that is cabotegravir, the integrase inhibitor that ViiV hopes will be a backbone for antiretroviral therapy for the next 10 years the same way that dolutegravir — which is losing patent protection around 2028 — has.
In cancer, the most recent example came in a pact with iTeos, where GSK paid $625 million upfront to grab a TIGIT drug. Even though they’ve entered the race later than others, Barron reckons their own genomics data and analytics point them to things others can’t see. If TIGIT plus PD-1 is I/O 2.0, they might be able to add a third therapy targeting the CD226 axis to reach I/O 3.0.
“There’s first to approval, but there’s also first in disease,” he said. “We have a really robust set of studies that we’re anticipating doing where we think while we may not be first to market in lung, where Roche and Merck are probably both ahead, we have some particularly interesting insights about other diseases that we might want to pursue, and we can use some data from external sources to ungate those trials.”
Then there are the internal projects you may have to squint harder to find, such as Zejula — which Barron touts as a best-in-class PARP inhibitor — or the multiple myeloma drug Blenrep or otilimab for rheumatoid arthritis or a new antibiotic dubbed gepotidacin or daprodustat for anemia associated with chronic kidney disease.
As for the legacy meds that don’t fit into the four new focus areas, moving forward GSK will lump them into a general medicines group that will happily divest or partner out non-priority drugs to invest in the vaccines and specialty candidates.
“(H)aving the opportunity to allocate capital across both pharma and vaccines allows us to put money to where the great projects are,” Barron noted.