GlaxoSmithKline has raised its bet on a promising drug for HIV/AIDS by redrawing a deal with Japan’s Shionogi which gives it a much bigger economic interest in the new product.
Dolutegravir, a once-daily drug that has performed strongly in clinical trials, is seen by analysts as a potential multi-billion-dollar-a- year seller and a strong competitor to treatments from market leader Gilead Sciences.
The drug belongs to a novel class known as integrase inhibitors that block the virus causing AIDS from entering cells.
Under the new agreement Shionogi will take a 10 per cent stake in Viiv Healthcare – an HIV drug joint venture set up in 2009 between Britain’s biggest drugmaker and Pfizer – in exchange for its rights to dolutegravir.
Previously income from the medicine would have been shared 50:50 between ViiV and Shionogi, which analysts calculate would have given GSK only around a 40 per cent interest in the drug, after taking account of Pfizer’s minority stake in ViiV. Now GSK’s economic interest will be between 60 and 66 per cent, its chief strategy officer David Redfern said.
Dolutegravir is scheduled to be submitted for regulatory approval in the US and Europe by end of this year. Industry analysts expect a launch by late 2013, with sales ramping up to around $1 billion by 2016, according to consensus estimates compiled by Thomson Reuters Pharma.
Redfern said the new arrangement was expected to dilute GSK’s earnings by around 1 pence a share in 2013 and 2014 but should boost earnings thereafter. Analysts expect earnings of just over 120p a share in 2013.
The decision fits with the group’s strategy of increasing investment in its new drug pipeline and echoes a move made in July to take full control of new lupus drug Benlysta by buying Human Genome Sciences for $3 billion. GSK, like its rivals, has suffered a string of patent expires in recent years. Despite coming through this so-called “patent cliff” earlier than most other drug firms, it is still struggling to grow sales.
Results for the third quarter, due tomorrow, are expected to show another difficult period of trading, weighed on by price cuts in Europe and weak vaccine sales.
