GSK’s “crown jewels” already look tarnished

As the company pulls Blenrep, questions about its future will only intensify.

Last year GSK named the late-stage projects that together, it believed, had peak sales potential of over £20bn ($23.7bn). Today, it pulled one of these, Blenrep, from the market.

Even if market withdrawal might have been foreseen after the failure of this antibody-drug conjugate's confirmatory trial, the speed with which GSK has lost one of its flagship oncology projects will alarm investors. And this is the latest in a long line of setbacks for GSK’s “crown jewels”. The group is likely to face more questions about whether it can continue in its current form – and how long Emma Walmsley, can hang on as chief executive.

Ms Walmsley came under fire from the activist investor Elliott in 2021, a hedge fund that is thought to still be an investor. At the start of 2022 some investors predicted that she would not last the year.

It is becoming clear that GSK’s push into oncology, signalled by the $5bn takeout of Tesaro in 2018, has been a disaster, but perhaps the blame should not fall entirely on Ms Walmsley’s shoulders. Her erstwhile right-hand man, Hal Barron, also played a big part in the group’s oncology strategy.

Ultimately, though, she presided over the decisions. And it is not just cancer where GSK has run into trouble. The rheumatoid arthritis project otilimab is on the scrapheap following lacklustre pivotal results, and there are doubts about whether the anaemia project Duvroq can become as big as hoped following a mixed adcom vote.

Zantac litigation still hangs over the company, with analysts recently questioning whether concerns here could put business development on hold. Until this litigation is resolved, GSK will be under a cloud.

Win some, lose some: GSK's big hopes
Product Description GSK's non-risk adjusted peak sales Status 2028e sales ($m)*
Blenrep BCMA-targeting ADC >£3bn Withdrawn from US market Nov 2022 after failure of confirmatory Dreamm-3 trial -
RSVPreF3 OA (GSK3844766A) Adult RSV vaccine >£3bn 83% vaccine efficacy in pivotal Aresvi 006 trial 1,814
Cabotegravir Long-acting HIV therapy & PrEP >£2bn Approved for therapy Jan 2021 & Prep Dec 2021 1,834
Zejula Parp inhibitor (from Tesaro) >£2bn 2L ovarian cancer maintenance use restricted to Brca+ve pts Nov 2022; 1L maintenance use not affected 1,467
Bepirovirsen (GSK3228836) Hepatitis B antisense oligonucleotide (licensed from Ionis) >£2bn B-Clear ph2 data Nov 2022 at AASLD; ph3 to start H1 2023 48
Depemokimab (GSK3511294) Long-acting anti-IL5 for asthma £1-2bn 3 ph3 studies complete 2024 (NCT04719832, NCT04718103 & NCT04718389) 39
GSK3888550A Maternal RSV vaccine £1-2bn Discontinued Feb 2022
Jemperli PD-1 inhibitor (from Tesaro) £1-2bn Has AA for 2L mismatch repair-deficient endometrial cancer; pivotal Ruby trial in 1L endometrial cancer to read out H2 2022 530
Men ABCWY Pentavalent meningitis vaccine £1-2bn Ph3 in young adults to read out H2 2022; Pfizer toplined success with rival vaccine in Sep 2022 598
Otilimab Anti-GM-CSF MAb for rheumatoid arthritis £1-2bn Discontinued Oct 2022 following lacklustre results from Contrast-1, 2 & 3
Duvroq (daprodustat) HIF-PH inhibitor for anaemia in CKD £0.5-1bn FDA adcom voted in favour of approval in dialysis pts, but against in non-dialysis pts in Oct 2022 91
Gepotidacin uUTIs £0.5-1bn Eagle-2 & 3 stopped early for efficacy Nov 2022 80
Note: peak sales estimate based on GSK's June 2021 investor event; *forecasts only given for assets still in play; GSK sales only. Source: GSK presentation & Evaluate Pharma. 

In the meantime, the group will cling to its recent successes. Pivotal trials of gepotidacin, in uncomplicated urinary tract infection, were stopped early for efficacy, but there is always a question mark over how big new antibiotics can be, since they are usually kept in reserve.

GSK also presented phase 2 data on its Ionis-originated hep B hopeful bepirovirsen at the AASLD meeting earlier this month. The B-Clear study found 9-10% of patients achieving target viral suppression, although the authors conceded that a combination approach might be needed to improve responder rate. A phase 3 trial, to start next year, could give a better indication of whether the project might indeed represent a functional cure.

And GSK also scored with its most important pipeline project, the adult RSV vaccine GSK3844766A, which looks to have the edge over Pfizer’s contender in terms of efficacy – although the Pfizer asset looks more tolerable.

As with gepotidacin, market size is an issue. SVB estimates the adult RSV vaccine market to be worth $6bn, with GSK picking up just 25% of this. And the company discontinued its maternal RSV contender, which had been another big hope.

Success in RSV, although much needed, will do little to counteract the belief that GSK is primarily a vaccines company. Some investors have called for a spin-out of this business, something that the group has so far resisted. If GSK’s efforts elsewhere continue to disappoint, it might not be left with much choice. If it does separate its vaccines, though, the big question will be: what is left?

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