Investors unmoved by GSK pipeline news
pharmafile | December 8, 2003 | News story | Research and Development |Â Â Â
GlaxoSmithKline has presented details of 20 potential blockbusters in its pipeline which it claims could bring it industry leading growth by 2008.
The company's R&D day in London was its first in over two years, but the reaction from investors and analysts has been underwhelming, with GSK's share price slightly down at the end of the day.
Introducing the presentations from the heads of each of its six drug development centres, chief executive Jean-Pierre Garnier was upbeat on the potential of the drugs.
"The success we have seen in R&D gives me great confidence in GSK's future. Our large and diverse pipeline of innovative science and class-leading compounds will secure our future growth. We will continue to drive this pipeline to maturity while also gaining full value from our currently marketed medicines. That's good news for both patients and investors."
The company showcased a number of exciting products including 572016, the first dual kinase inhibitor to treat solid tumours, 353162, a next generation NDRI antidepressant and 480848, the first in a new class of cardiovascular drugs.
"There is a good chance that GSK will be the fastest growing pharmaceutical company in terms of revenue growth," Mr Garnier declared bullishly, referring to the 2006-2008 period, but refused to specify whether this would be double-digit growth.
Despite the promise of many of the new drugs, analysts remained concerned that none of the strongest prospects are in the latter stages of development.
Analysts Deutsche Bank noted: "The bulk of GSK planned NCE filings are still relatively distant, with two scheduled for 2005, five for 2006, 13 for 2007 and 20 for 2008. Of those planned for 2007 and 2008, we note that half are still in phase I, where the typical odds of success are under 20%. We thus believe it will be extremely challenging for GSK to live up to Garnier's upbeat suggestion that GSK could be the fastest growing pharmaceutical company in terms of revenue growth over 2006-08."
In the short term, GSK expects to launch a number of new products in 2004. Ariflo has been delayed by the FDA but is expected to join the rapidly growing COPD market next year, while Hycamtin will challenge AstraZeneca's Iressa in the treatment of non-small cell lung cancer and also treat the small cell variant of the disease.
Osteoporosis treatment Boniva/Bonviva will also be launched, along with a new co-marketed diabetes drug Avanadryl, a combination of GSK's Avandia with Aventis' sulphonylurea Amaryl.
Solifenacin succinate, a new overactive bladder treatment will be co-promoted with Yamanouchi.
Finally, nelarbine, a T-cell leukaemia drug was reinstated into the company pipeline after doubts about its chances were overcome, and GSK now predict it will be available within a year and earning up to $500million a year.
Highlighting the upturn in the company R&D productivity since creating the more commercially driven Centres for Excellence in Drug Discovery (CEDDs) Mr Garnier said it was now taking a more conservative approach of keeping products in phase II for longer in order to reduce costly and embarrassing phase III failures.
GSK head of R&D Tadataka Yamada added: "Sometimes you can kill yourself by trying to be very fast. In some cases people will skip phase II and go straight to phase III but that is not a smart move."
Dr Yamada expressed his confidence that the company had turned the corner stating: "Our portfolio was largely dominated by product line extensions now it going to be a portfolio that is dominated by NCEs."
Despite this, the company will rely on a number of product line extensions (PLEs) to bolster its earnings, the company claiming to have 20 significant ones in phase II/III development.
GSK's treatment for Parkinson's disease ReQuip is one of the most notable PLEs, having recently been granted priority review by the FDA to treat the neurological disorder restless leg syndrome.
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