GSK plc (NYSE:GSK) 13th Annual Jefferies London Healthcare Conference 2022 November 16, 2022 4:45 AM ET
Company Participants
David Redfern – Chief Strategy Officer
Conference Call Participants
Peter Welford – Jefferies
Peter Welford
Thank you all very much. We’ve got a bit of room around the front that’s why – over the head if people want to move around. And thank you very much. My name is Peter Welford. I’m the European Pharma and Biotech Analyst at Jefferies in London. It’s my great pleasure to be hosting the next session in this track, which is Glaxo, GSK.
Here we have David Redfern, Chief Strategy Officer, who we’re going to draw through a fireside chat. If anyone does have a question, they’d love to get answered. By all means, you can raise your hand. We will try and take questions if you do have any. But with that, we’ll open up.
Question-and-Answer Session
Q – Peter Welford
So I guess, let’s start off with what probably has been one of the most important sort of growth drivers for GSK for a while now Shingrix. Can you just talk about the – what you’re seeing at the moment with the Shingrix vaccine Shingrix in the U.S. the sort of current penetration and what you’ve seen obviously after a pretty difficult pandemic period?
David Redfern
Yes, thanks Peter. Good morning, everyone great to be here. So I think on Shingrix, we’ve seen a huge bounce back this year, very, very strong growth. It will be a record year. In terms of penetration in the U.S. we have vaccinated about 33 million Americans plus or minus And remember, there’s about 110 million Americans over the age of 50, which is basically the market. And we’re running roughly 3 million or so patients a quarter.
So there’s obviously a lot of runway still to go to before we reach maturity in the U.S. and also recognize that each year the cohort that comes into the over 50 category is about 5 million, which is quite significant and often underestimated. So lots of opportunity still to go for in the U.S. I think the other thing about Shingrix has been incredibly notable this year is we are really starting to internationalize it.
So the international launches were deferred whilst we were supply constrained and then we had the pandemic. But we are starting to roll out quite aggressively now around the rest of the world. We launched in about 25 countries, including here in Europe, countries like Germany already going very fast, other countries in Europe and elsewhere just getting going. So the international curve is a few years behind the U.S. curve. So we see sustainable growth actually on a global basis for Shingrix to be quite significant for many years to come.
Peter Welford
And I mean you talked a bit about the ex U.S. growth. Can you just talk a little bit about what is the key launches, how is reimbursement progressed ex U.S. and sort of pricing at the moment in those key markets?
David Redfern
Yes, well, it obviously varies country-by-country by the healthcare system. But in most countries, we are launching into the private market at a very similar price to the U.S. The actual price corridor is plus or minus about 5% actually. In some countries like Germany, we’ve got reimbursed through the sick funds and there’s a whole history of private insurance for vaccines. Here in the U.K. for example, it will be a private market and that’s more typical across Europe.
But obviously, the private market is significant. Overtime, there is obviously the potential to have more government mandated and government procurement schemes, but I think that’s a few years away.
Peter Welford
And then I guess moving on to what’s – one of the biggest kind of HIV could you just talk a little bit about that, again let’s start off with, I guess, what – obviously post COVID. Can you talk a little bit about the – how you’re seeing that – the HIV market return to normality and particularly how that’s impacting – the new launches at the moment you’ve got going in HIV?
David Redfern
Yes, I know it’s a good question, Peter. I mean, I think in the U.S. prescription levels are basically back to normality, but it is less dynamic than it was before COVID. I think during COVID, most patients were reviewed over the phone and if they were well controlled, essentially their prescriptions are rolled over. The level of dynamism was down about 30% it’s come back a bit, but it is definitely a bit – there’s a bit less switching going on in the U.S. then there was before, Europe’s pretty much back to normal levels pre COVID.
That said, I have to say, we’re incredibly pleased with our performance in HIV this year we’re growing almost double-digits, high single-digits, which is really driven by Dovato in both Europe and the U.S. And even if the switching is a bit less, our market shares are higher. So we’re incredibly pleased with the performance of Dovato.
We said, we annualize it or go through £1 billion this year and we’re going to go through significantly through that. And Cabenuva is second year in the U.S. is performing incredibly strongly as well. And we went through £100 million in Q3, so real momentum behind Cabenuva.
Peter Welford
And can we just focusing on Cabenuva, because obviously, this is the start of the sort of longer acting injectable regime for HIV. Can you talk a little bit about how that’s going, because obviously, there are a number of impediments to adopting a new sort of type of treatment like that? So can you talk about what the feedback theme from physicians, from payers, and how you managed to get this integrated into the treatment?
David Redfern
Yes, I mean, we’ve always said with Cabenuva, which is every eight weeks in the U.S. and in Europe. There is a group of patients. It is a minority of the – it’s about probably 15% or so from the market research we do, maybe 15% to 20% and recognizing there’s about 1.1 million Americans with HIV. So 150,000 to 200,000 patients that, are incredibly motivated to move away from daily oral medicines.
And it’s for a variety of reasons, but it’s often because they haven’t disclosed their HIV status that they don’t want tablets in their household to travel with tablets. Often, it’s for stigma and anxiety reasons they don’t want to be reminded every day. So it’s not a majority, but it is it is a very passionate minority, and we’ve always known that. So that group of patients has really being the ones driving the demand.
For the physicians, you’re right, it’s been quite complicated, which we totally predict because their HIV physicians are not used to giving injections. They had set up the procedures and their clinics to do that quite a big part of the business go through Part B. So it’s medical benefit and most oncologists are very used to all the paperwork and the working capital that’s required around that for HIV physicians that was new.
We obviously last year had to go through reimbursement. But I would say all of those obstacles are largely dealt with and the patient demand is coming through. We have about 15,000 patients in the U.S. now on Cabenuva. So a long way still to go. And I think we’ve been incredibly encouraged by the take up this year and the momentum that we’ve seen.
Peter Welford
And I guess just moving on, again, sticking with the injectable theme, but the other angle that is growing obviously is aptitude, the prep, injectable. Obviously, still early days there, but can you just talk a bit about expanding the market there and how you see that as well?
David Redfern
Yes, I mean it is early days. I think it’s a huge opportunity, particularly – and it’s mainly in the U.S. We think there’s, probably 1 million Americans at risk of HIV for different reasons. The orals are probably only penetrated to about 200,000 to 300,000 of those and predominantly in the urban settings and there’s a whole population in the Southern states and the more rural settings still to be penetrated. I mean, it’s too early really to comment too much on aptitude we will see.
We’re pleased how it started. We’re going through reimbursement. It’s obviously a different marketing challenge. We obviously need a lot more consumer marketing to drive this and a lot of cooperation both with the federal government and the state individual states around programs and so forth to encourage take up. But I would say there’s a real willingness to do that, particularly with this administration. HIV is still a major problem in the U.S.
We see about 35,000 to 40,000 new cases a year, which hasn’t really dropped down over the last few years, which is a quite stark contrast actually to Europe. And there’s a whole series of complex reasons mainly around the healthcare system of why that is the case. So I think, you know, it is the time the administration in partnership with ViiV really made a difference to this.
Peter Welford
And then I guess the big topic to some extent longer term for obviously ViiV and HIV is obviously the dolutegravir likely loss of exclusivity around the end of the decade, 2028/2029. But obviously, can you just talk a little bit about that what the strategy is longer term here to shift the portfolio in HIV? And I guess focuses on the near term, when we’ll get an update on sort of how you should think about the next wave of HIV medicines potentially coming in the future?
David Redfern
Yes, it’s a great question, Peter, and obviously one we’re incredibly focused on. Our strategy really is to build out the long-acting franchise both in treatment and in prep. Nearly all our R&D money in HIV now is going around long-acting. And we think if we can produce different types of medicines we can expand that 15% to 20% to a much larger proportion of the market and ultimately switch significant proportion of the oral – of the patients on daily oral therapy into longer-acting medicines.
To do that, we’re really focused on extending Cabenuva into three further medicines. So firstly, I there is quite a bit of demand for a self-administered version of Cabenuva, and we’re working on that. We’ll probably be monthly or every other month and that’s a few years away, but a lot of good work going on around that. We are working on a longer-acting version involving probably cabotegravir, but different formulations of cabotegravir potentially with PH20 technology that we licensed from Halozyme.
And we are likely to combine that with a different secondary medicine. We had proof-of-concept data during Q3 with our broadly neutralizing antibody N6LS that looks very encouraging and we’re running more studies on that. We also have a maturation inhibitor in development and a capsid inhibitor. So, we’re looking for that to be sort of three months plus. And then we have a next generation integrase that we license from our partners Shionogi last year, that has the potential to go out to six months plus.
And so the sort of third medicine will be an ultra-long-acting of that duration potential with N6LS or potentially with our capsid inhibitor. So there’s a big investment going behind this. And the early data on things like N6LS is encouraging. We will have quite a bit more proof-of-concept data during the course of next year. And I would think either this time next year or perhaps Q1, ’24 is probably when we’re going to call exact what formulations and combinations we’re going to take through into the pivotal studies.
And so, we’re about a year or so away from deciding that and exactly what the sequencing and the timelines is. But I would say, certainly in HIV, we feel we have a very significant chance of offsetting most if not all of the dolutegravir oral patent I won’t call it a cliff, I’d call it a slope because it goes in the U.S. in probably ’28 and in Europe it’s in a more phased way and cabotegravir is in the 2030s.
Peter Welford
And then, so let’s move on then from HIV now in the interest of time and gone to another obviously big readout we had this year in RSV for the older adults, so we had some positive data for the RSV vaccine. Can you just talk a little bit about how I guess, first of all, how you look at that market? And importantly, how you think – we should think about the driving commercial success still assuming gets approval to next year – for the RSV vaccine?
David Redfern
Yes, well, I think the first thing to say, it’s a massive unmet medical need. I mean, typically, we see about 300,000 – sorry, 180,000 hospitalizations in the U.S. about 300,000 across U.S. and Europe each year. And in most years, RSV is causes greater death than flu so typically about 15,000 deaths a year in the U.S. So it is a serious unmet medical need. I think the events in the last few years have shown the importance of older adult protection and vaccination against circulating viruses, particularly circulating respiratory viruses.
So we see this as potentially an extremely significant market. We couldn’t have been more thrilled with where the data has come out on RSV. We’ve obviously published that our IDWeek 94% efficacy, which is obviously incredibly high for patients, the most severe RSV patients, who are the patients that get hospitalized, 83% efficacy in the overall population. And I think importantly, actually very strong secondary endpoints.
So we see a very consistent potency across RSV A and RSV B and a very consistent potency across the different age groups going up from 60 onwards, all of which is important. And curve administration with flu, which I think is also important to have that data. And I’m not going to get into a debate with the Pfizer data because we haven’t seen it yet. But I would just point out our confidence intervals are really quite narrow.
So, we couldn’t be more thrilled. We have – we’ve been accepted by the FDA on a priority review with the PDUFA date in May. If that goes well, we will go through to the ACIP Committee in the U.S. for a recommendation in June, and we will be ready for the season in the fall of next year.
Peter Welford
And perhaps, obviously, we’re all very aware of flu vaccines, which obviously we come up – what we’re supposed to all take every year. Can you just talk little about – how long do you think it will take to develop the RSV vaccine to be similar sorts of penetrations to the 60%, 70% we see with flu. And is this a market you think is going to take time to build awareness or what can be done, I guess, to drive penetration of this?
David Redfern
Yes and so – we shall see. I mean, it will take a bit of marketing. I mean, I think most people certainly outside the pharmaceutical industry have probably never heard of RSV until recently and probably still haven’t. So it’s not a disease that has wide awareness. I think the good thing in the U.S. I mean, firstly, because of the data and the vaccines it has driven a lot of media, so there is more awareness.
The other thing to remember in the U.S. one of our big allies in this is the pharmacy chains and they make money from the vaccine and people going in there and they will run campaigns as they did with Shingrix. So that will help. We will do some consumer marketing as well. So I think there is a bit – of market development to be done for sure and that will have some influence over the ramp, but for no reason why this won’t be reasonably significant quite quickly.
Peter Welford
And then I guess, we’ve got to go on to the big topic obviously for Glaxo at the moment that we’ve got to cover Zantac, I’m afraid. So first of all, can we just talk about, I mean, what underpins management’s confidence in the Zantac litigation. I think you’ve said you think there’s a low likelihood of a significant liability?
So I was just going to talk a little bit about what underpins management’s confidence And then just remind people, what are the key upcoming events we should be keeping an eye out for Zantac?
David Redfern
Yes, well, I think because we don’t believe there is any consistent or reliable evidence from the significant number of epidemiological studies and other data points that there is a causal link between ranitidine and cancer and we feel that very strongly and we will defend our position incredibly strongly everywhere. I mean, we gave a lot of disclosure at Q3 – pretty much everything we know. So I don’t want to repeat all of that. I’d refer you to our Q3.
I mean, the key thing coming up is the ruling from Judge Rosenberg on the Daubert hearings in the federal cases, which will basically determine exactly what type of patients and what type of cancers can – if any, can be taken forward.
Peter Welford
And we anticipate I don’t know if they’ll stay in the next, about – relatively short period of weeks?
David Redfern
Yes, I mean, it’s up to her, but certainly this side of Christmas, I would hope.
Peter Welford
That’s clear. And so I guess moving on then to business development, I guess firstly, and because this gets us by a lot of people. So I think – we’ve got to ask, is there any change given that – so in terms of management’s attitude towards business development? But then just in terms of how should we think about at the moment how Glaxo views this and what sort of strategy you’ve got for that?
David Redfern
Well, absolutely no change as a result of Zantac, we’re crystal clear and so is the Board on that. I think you should expect us to continue to be active. Obviously, we’ve done some what we think are pretty smart deals this year. We bought Sierra Oncology, but gave us a very interesting medicine for anemia in myelofibrosis patients that’s with the FDA and hope to approve and launch next year.
And we also bought Affinivax, which gave us some very exciting technology and the potential to play in the PCV market, the biggest vaccine market and potentially other bacterial infections as well. And we’ll have more to stay around the timelines of – the development programs of that in the relatively near future or certainly over the course of next year and some other licensing and smaller bolt-on deals.
And we certainly would expect to stay at least, if not more active going forward, we have more balance sheet capacity in GSK following the demerger of the consumer business and the restructuring of the balance sheet from that. I think in terms of where we’re focused, if you look at GSK, we have a very strong growth profile over the next few years, we have given an outlook of more than 5% growth through to ’26 the Street seems to believe that because most of your forecasting seem to be consistent with that.
So there’s a lot of momentum over the next five years or so. Our job is really convince, you that we can sustain that momentum in the second half of the decade and into the 2030s, particularly as we go through things like the dolutegravir patent. So clearly a big part of that is our internal pipeline. And we can talk some of the medicines there, RSV, but also our hepatitis B drug is looking extremely exciting. But we will supplement it through BD to build the revenue profile through the second half of the decade and into the 2030s, and that’s where we’re focused.
Peter Welford
And then if we just talk – you mentioned R&D, in fact, we’re moving on to the pipeline now. But if we just built bigger picture a minute for R&D obviously, we’ve had a change at the top where Tony White’s now taken over?
David Redfern
Tony Wood.
Peter Welford
Tony Wood sorry, Tony Wood’s – and perhaps you could just talk a little bit about in terms of how we should think about, particularly the commitment to oncology because this question I get a lot given some of the changes and something has happen there and obviously some of the recent news as well. Can you just talk a little bit about commitment to oncology in particular and how we should think about pipeline areas of focus?
David Redfern
Yes, I mean, I think overall, we remain absolutely committed to oncology. It is an emergent area for GSK. And there’s obviously lots of other areas we play and we’re very strong in infectious disease, obviously HIV, but I’ve talked about hepatitis and antibacterial disease. We have plays in immunology and so forth. But I think we remain absolutely committed to oncology We’ve got, we think still some quite interesting clinical development plans going on, particularly around our PD dostarlimab that came with TESARO.
That’s being studied in a number of different indications. So for those of you who are at ASCO, there was the Sloan Kettering study where 14 patients with rectal cancer went into complete remission. So as a result of that, we’re now running pivotal studies with dostarlimab in rectal cancer, colorectal cancer, gastric cancer and so forth. And we see how that plays through. We’re also looking at dostarlimab in different combinations.
We had the parallel studies and the COSTAR studies readout recently, which certainly showed some potency with chemotherapy in lung cancer. Now obviously that’s the biggest market, the most competitive, but there are programs around that, including with the TIGIT. They’re obviously higher risk. So there’s quite a lot going on in the early stages and of course we’ve got things like Sierra to launch next year.
So I think oncology and GSK, it should be viewed as emergent, it should be viewed as sort of one of several plays. We’re never going to be rushed on Novartis. But we have a lot of capability across the organization, both commercially medically, scientifically, and we will continue to invest.
Peter Welford
And then you mentioned, I think a couple times that – the infectious disease area and I guess there’s, a couple of things there. Let’s start up actually with hepatitis B I mean you’ve had some data there recently that we’re obviously encouraging. Can you just talk a little bit about what the next step is and why you’re so encouraged by the data we’ve seen so far?
David Redfern
Yes, so obviously, it’s a very big disease area 300 million people with hepatitis B and so huge unmet need. The Holy Grail is a cure or at least a functional cure. I think, you know, the data we have on bepi, some of which we’ve published has been incredibly encouraging around its potency in different patient groups both on its own and it’s also being studied in combination with interferon.
I think some of that data seems to demonstrate it clears both the virus and the surface antigen. And has the potential probably as monotherapy in certain types of patients and we have to see whether we can develop biomarkers and that sort of thing for those, but definitely in combinations as well. So it’s still a way to go and we will run the pivotal studies probably starting next year, but that’s definitely a medicine that internally in GSK we’re quite excited about.
Peter Welford
And then equally another infectious disease where we’ve had data recently is [GECO], the new antibiotic for urinary tract infections. I think it’s worth to touch on this as well. I mean, a lot of large companies basically exited antibiotic research completely. So I mean, can you just talk a little bit about how Glaxo views this, this space more broadly, but also this opportunity. Because I think you’ve also done a recent BD deal as well in this area?
David Redfern
Yes, no. Well, we’re clearly committed to infectious disease generally in all aspects, obviously, vaccines, HIV, viruses, but also bacterial infection. And we all know the need for new novel antibacterial medicines. I think is great news for GSK. More importantly, it’s great news for patients. It’s been stopped at the interim stage because of efficacy which – and obviously, we’re busy now analyzing the data and we’ll take it forward next year.
But – if it’s approved, it will be the first novel medicine for urinary tract infections, which isn’t obviously incredibly common, particularly in women. And I think we’ll have an important role to play because typically UTIs are treated with fluoroquinolones, is a very broad approach and obviously leads to resistance over time and the opportunity to have a much more targeted therapy specifically at the U.K. line in UTI, we think makes a lot of sense.
So we’re very excited about this. And for sure, we are building a bacterial franchise. We’ve done the deal with a company called Spero for an oral carbapenem, which will treat the more severe UTI patients as well and hopefully get them out of hospital much quicker or even prevent them from going from hospitals. So this whole area is a focus area. Not least because I think societies need companies like GSK to stand up and develop novel antibiotics.
Peter Welford
And then another emerging pipeline drug – is the daprodustat recently there was an FDA advisory committee, which was – that was equivocal. But I think to be fair, I think people were there. I’ll ask [ph] my words, not yours words. But I think, you know, to be fair, people are expecting it could be worse?
You did actually get a positive endorsement for the dialysis dependent group at least. So could you talk about – if you do get the approval for just the dialysis dependent or if in fact the FDA would go broader, I mean, is this a drug Glaxo would now consider as well potentially commercialize themselves? And I mean, how do you view the opportunity here?
David Redfern
Yes, I think the short answer to that is yes. I mean, we have to see exactly where we what the FDA do. I mean, this is quite complicated because on the one hand, the FDA is clearly very cautious about this class of drugs. We’ve seen that on the other hand, I think our data and the way we ran the studies is quite compelling. If they follow the ad board and we get a dialysis indication in the U.S. that’s definitely a commercial opportunity for us.
There’s about 800,000 Americans on dialysis quite a move to move a lot of those to at home dialysis and give them more freedom and flexibility. And so an oral medicine for managing the anemia in that context, I think, will be attractive. And we will commercialize in some shape or form. Obviously, it will need to be done in conjunction with the dialysis companies and centers, but there’s definitely an opportunity for us.
But I think we just have to see exactly where the FDA goes, exactly what the label is and how it plays through. I think – and similarly in Europe, it’s possible we might get a broader label in Europe we shall have to see. In Japan where the medicine is launched, we have 60% market share and it’s going incredibly well. There’s, five hips [ph] I think on the market in Japan, but we have by far the leading position. So we definitely see this as an opportunity, but obviously there’s, some things to work through.
Peter Welford
And then if you can move on to then, I guess, some less positive in Blenrep recently obviously had a – in multiple myeloma had a setback in the DREAMM-3 study. Could you just talk about how should we think about Blenrep? Do you think at this point is this like, I mean, clearly an asset now where you’ve got to at the very least rebuild. But I mean, is this realistically now a big asset that we should sort of take our models or how should we think about this?
David Redfern
Well, it’s obviously complicated right now. We’re in discussions with the FDA. We’ve got up I think about 600 patients on it in the U.S. And you have to remember it was a provisional approval or accelerated approval that gets confirmed by DREAMM-3. So the fact that the endpoint was missed in DREAMM-3 obviously raises some questions and there’s, some discussions with the FDA about what is best to do next.
We are continuing the combination studies, DREAMM-6 and DREAMM-7, and we have to see how those readout over the course of the next 12 months or so. But I think it’s probably wise to be cautious on Blenrep and we’ll have more to say when we conclude the discussions with the FDA.
Peter Welford
That’s great. If anyone has it, we got 30 seconds left of course. I haven’t let anyone do anything. But if anyone has any questions in 30 seconds do, if anyone wanted to shout? No, all right. I think with that. So listen, thank you, everyone. It’s been hot in here. It’s been very crowded. Thank you very much, David, for your time.
David Redfern
Thanks.
Peter Welford
Thanks for everyone for attending, we close session there. Thank you.
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