GlaxoSmithKline mulls respiratory exit to support big bet on cancer R&D

GlaxoSmithKline GSK House in Brentford, UK
GSK's head of oncology thinks there is still scope to further trim the pipeline. (GlaxoSmithKline)

GlaxoSmithKline may exit the respiratory business and pull back in other areas to commit more cash to cancer R&D, according to Axel Hoos. Hoos, GSK’s head of oncology, told S&P Global Market Intelligence that Hal Barron is keen to funnel resources into the areas with the most growth potential, putting the future of the key respiratory unit in question.

Respiratory has been a cornerstone of GSK’s business for years but the long-term growth prospects of the field, both at the Big Pharma and in general, are debatable. GSK’s respiratory sales fell over the first six months of the year as rising demand for the Ellipta line of products failed to offset fast-falling revenues from Advair.

GSK is pushing 11 respiratory drugs through the clinic, some in multiple indications, in a bid to set the unit up for future growth. But Hoos, who would benefit from money being redirected to oncology, has raised the question of whether the respiratory R&D dollars could be better elsewhere.

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“I don't want to be inappropriate and step on some toes, but we have areas that have a higher probability of growth and areas with a lower probability of growth,” Hoos said. “Our respiratory franchise, for example, has been a driver for GSK R&D for a long time and we've been very successful with it … but it's also pretty flat. There is not much growth to be expected.”

Hoos went on to frame the respiratory franchise “a very successful business” that is hamstrung by R&D challenges.

“It's just much harder to innovate in respiratory than it is to innovate in oncology,” Hoos said.

That view is supported by a comparison between the marginal gains associated with many recent respiratory drugs and the life-changing advances seen in the oncology sector. Given that, it could be rational for GSK to prioritize oncology R&D, although it would mean wading into a congested sector.

GSK’s oncology division underwent a major change in 2015 when the company swapped assets with Novartis and has been a minor player since then. Barron has worked to change that since arriving at the company at the start of the year. The effects of these changes could spill over to other units.

GSK shed many assets after Emma Walmsley took over as CEO in April 2017 and the cuts continued in the following months. Hoos thinks there is still scope to further trim the pipeline.

"I actually think we have to do some clean-up. Our portfolio is still too big and we need to just stop a few projects that are less likely to succeed," Hoos said. "Or where we don't have a focus, divest some stuff that liberates resources that we can use to accelerate the big ticket programs that we believe will carry the success for GSK. These choices to be made are big choices and they're not easy—and we're in that process right now."

Perhaps indicative of why this plan maybe in place, it was no surprise to see that Wednesday morning, the U.K. Big Pharma also announced three trial flops across its respiratory pipeline from its Q3 (PDF):

  • 1325756 (danirixin CXCR2 antagonist) in COPD
  • 2798745 (TRPV4 antagonist) in cough
  • 2245035 (TLR7 agonist) in asthma

As ever in these quarterly updates, details of these midstage terminations were sparse, though GSK notes that ‘745 is in a “preclinical program investigating the potential” of the drug in cancer, as well as a phase 1 in acute respiratory distress syndrome.