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The Pulse of the Pharmaceutical Industry

GlaxoSmithKline: Gaining Momentum

Written by: | | Dated: Monday, October 12th, 2015

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Best-Selling Rx Products

Product 2014 Sales 2013 Sales
Advair/Seretide $6,971    $8,694
Infanrix, Pediarix $1,365    $1,421
Avodart $1,327    $1,413
Epzicom, Kivexa $1,266 $1,258
Flovent/Flixotide $1,157    $1,312
Ventolin $1,096    $1,058
Augmentin $945    $1,038
Hepatitis Vaccines $920    $1,037
Lamictal $875    $918
Votrient $676  $546
Synflorix $656    $668
Rotarix $620    $618
Boostrix $522    $475

All sales are in millions of dollars and were translated using the Federal Reserve Board’s average rate of exchange in 2014: £1.6484.


Financial Performance

  2014 2013
Revenue $37,923    $43,691
Net income $4,667    $9,277
Diluted EPS $0.93    $1.82
R&D expense $5,687    $6,467
  1H15 1H14
Revenue $18,973    $18,419
Net income $13,439    $2,342
Diluted EPS $2.79    $0.45
R&D expense $2,768     $2,750

All sales are in millions of dollars except EPS, and were translated using the Federal Reserve Board’s average rate of exchange in 2014: £1.6484



The standout event for GlaxoSmithKline during 2014 was the company’s proposed three-part transaction with Novartis AG, which was completed on March 2, 2015. The innovative transaction is expected to accelerate GSK’s strategy of becoming a simpler, stronger and more balanced platform for long-term growth.

GlaxoSmithKline acquired Novartis’ global Vaccines business (excluding influenza vaccines) for an initial cash consideration of $5.25 billion; created a new world-leading Consumer Healthcare joint venture with Novartis in which GSK has majority control and an equity interest of 63.5 percent; and has divested its Oncology business for an aggregate cash consideration of $16 billion.

The net after tax proceeds of the transaction received by GlaxoSmithKline upon its completion were estimated to be $7.8 billion. This result takes into account the full consideration of $16 billion paid by Novartis for GSK’s Oncology portfolio and related assets. Up to $1.5 billion of that purchase amount may have to be returned to Novartis if certain conditions relating to the COMBI-d study are not met. Following the positive results from this clinical trial announced on Feb. 6, 2015, GSK management believes these conditions will be satisfied.

COMBI-d is a pivotal Phase III randomized, double-blinded trial (NCT01584648) comparing the combination of the BRAF inhibitor dabrafenib and the MEK inhibitor trametinib to single-agent therapy with dabrafenib and placebo in patients with unresectable (Stage IIIC) or metastatic (Stage IV) BRAF V600E/K mutation-positive cutaneous melanoma.

Dabrafenib is marketed as Tafinlar and trametinib is branded as Mekinist. The clinical trial randomized 423 patients from investigative sites in Australia and Europe as well as North and South America. The primary endpoint was investigator-assessed progression-free survival. Secondary endpoints included overall survival, objective response rate, duration of response, and safety.

On Feb. 6, GlaxoSmithKline announced OS results from COMBI-d that showed a statistically significant reduction in the risk of death for the combination of dabrafenib and trametinib versus dabrafenib monotherapy in patients with BRAF V600E/K mutation-positive metastatic melanoma. The safety profile was consistent with the profile observed to date for the combination, and no new safety concerns were evident.

GlaxoSmithKline intends to use the transaction proceeds to fund the full amount of the previously announced capital return of £4 billion to shareholders. Subject to shareholder approval, the capital return is expected to be implemented via a B share scheme, which will provide capital treatment for all UK tax-resident shareholders.

The transaction with Novartis provides substantial worldwide scale to GSK’s Consumer Healthcare business, which became a market leader in 30-plus countries and the leading company globally for OTC medicines.

Already the world’s No. 1 vaccine manufacturer, GSK has further strengthened this position while allowing the company to expand its portfolio – particularly in meningitis – build geographic reach – especially in the United States – and join together expertise in virology and bacterial infection research.

“Completion of this transaction represents a major step forward in the Group’s strategy to create a stronger and more balanced set of businesses across Pharmaceuticals, Consumer Healthcare and Vaccines,” commented Sir Andrew Witty, CEO of GlaxoSmithKline. “We will now be focused on rapidly implementing our integration plans to realize the growth and synergy opportunities we see in the new Consumer Healthcare and Vaccines businesses.”

According to management, GSK has a strong portfolio of innovative products across its three world-leading businesses: Pharmaceuticals, Vaccines and Consumer Healthcare. Based on a full-year 2014 historic pro-forma basis, revenue was split as follows: Pharmaceuticals 59 percent, Consumer Healthcare 25 percent, and Vaccines 16 percent. With a presence in 150-plus markets, GSK anticipates demand for its products will increase worldwide, especially in Emerging Markets.

R&D innovation underpins all three businesses, GSK managers say. The product pipeline includes 40 drug and vaccine new molecular entities undergoing Phase II or Phase III development primarily focused on HIV, Oncology, Vaccines, Cardiovascular, Immuno-inflammation and Respiratory diseases. Each of the three businesses are supported by proprietary technologies and manufacturing capabilities in areas such as devices, adjuvants, bio-electronics and formulations, according to GlaxoSmithKline. Group officials say GSK aims to improve returns from its R&D innovation by striking a balance between pricing and volume generation.

At its Investor Day on May 6, 2015, management outlined a series of expectations for the Group’s performance for the five-year term from 2016 through 2020. Among the expectations, core EPS will increase at a CAGR of mid-to-high single digits on a CER basis. The U.S. market introduction of a generic competitor to the company’s best-selling medicine Advair/Seretide was factored into GSK’s assessment of its future performance. Also stated was GSK’s intention to pay an annual ordinary dividend of 80 pence for each of the next three years (2015-2017).

GSK announced in April 2015 that the company is further bolstering and expanding its U.S. vaccines presence by establishing a new worldwide center for vaccines R&D. The Rockville, Md.-based facility will become one of three global vaccines R&D centers for GSK, complementing its existing worldwide R&D sites in Rixensart, Belgium and Siena, Italy.

The Siena location was acquired from Novartis during March 2015.

The Rockville facility will expand GlaxoSmithKline’s efforts to discover and develop novel vaccines across a range of pressing public health threats, including those relevant to the United States. The facility, which was acquired by GSK in 2012, will consolidate vaccines R&D activities performed at other GSK sites – including in Philadelphia and Cambridge, Mass. – into one centralized location. Significant late-stage development programs, as well as vaccine discovery and new platform technology development, will be led from Rockville. Management anticipated that site operations for vaccines would start in Rockville as early as September 2015.

Company performance

Management says GSK’s 2014 financials were impacted by trading conditions that continued to be challenging, especially in the U.S. primary-care market. As a result, sales for the year decreased 3 percent CER to £23 billion ($37.92 billion) and core earnings per share fell 1 percent CER to 95.4p ($1.57), with some of the sales pressure mitigated through delivery of cost and financial efficiencies.

Backed by leading Pharmaceuticals and Vaccines businesses, GSK has a significant commercial presence in the United States, Europe, Japan and Emerging Markets. Since 2008, GSK has increased investment in emerging markets, which accounted for c. 19 percent of Group turnover in 2014, rising from c. 13 percent in 2013.

Pharmaceutical and Vaccines sales in 2014 rose in Emerging Markets by 5 percent and Japan by 1 percent, while Europe was flat. This performance was offset by U.S. sales decreasing 10 percent due to continued pricing and contracting pressure, especially in GSK’s respiratory business.

Within GSK’s successful HIV business, ViiV Healthcare rose 15 percent as 2014 combined sales of Tivicay (dolutegravir) and Triumeq (dolutegravir, abacavir, lamivudine) reached £339 million ($559 million). According to GSK leadership, the launches of these products have been among the best in class.

The 2014 performance of the company’s Consumer Healthcare business was impacted by some supply issues. Sales dropped 1 percent from the previous calendar term, but revenue increased 2 percent in fourth-quarter 2014 following progress in remediation of the supply issues and that momentum was expected to continue into 2015.

GlaxoSmithKline reported that Group turnover for the first six months of 2015 grew 4 percent on a reported basis to £11.51 billion ($18.97 billion) compared to first-half 2014. Pharmaceuticals decreased 7 percent, Vaccines improved 11 percent, and Consumer Healthcare rose 37 percent. Results for each of those businesses reflected the impact of the Novartis transaction. With the transaction completed on March 2, 2015, GSK’s reported first-half results include four month’s revenue of the former Novartis Vaccines and Consumer Healthcare products and exclude sales of the former GSK Oncology business from that date. Pro-forma Group turnover improved 1 percent, with Pharmaceuticals decreasing 2 percent,

Vaccines dropping 1 percent and Consumer Healthcare rising 7 percent. Sales of New Pharmaceutical and Vaccine products totaled £715 million ($1.18 billion) in first-half 2015.

Based on first-half 2015 results, GSK management projects that full-year core EPS will decrease at a high teen percentage rate (CER), but 2016 core EPS percentage growth is anticipated to reach double digits (CER).

Product/category review

The Pharmaceuticals portfolio consists of innovative and established medicines, and GSK has leading global positions in respiratory disease and HIV. In recent years, GlaxoSmithKline has introduced important new medicines and vaccines in respiratory, HIV, oncology, diabetes and influenza. GSK management’s expectation of at least £6 billion of revenue per annum on a CER basis by 2020 from products launched during the past three years includes contributions from pipeline assets Nucala (mepolizumab) and Shingrix. Growth of new pharmaceutical products is now more than offsetting sales decreases of GSK’s long-time best seller Advair/Seretide.

Advair/Seretide remained GSK’s best-selling medicine in 2014 by a wide margin, but global sales were significantly down from the previous year due to generic competition. Advair/ Seretide sales decreased 15 percent from 2013 to £4.23 billion ($6.97 billion). The asthma and COPD product’s sales during first-half 2015 were down 14 percent to £1.86 billion ($3.06 billion) compared with the one-year-earlier period. During that period, U.S. sales of Advair came in at £876 million ($1.44 billion), down 19 percent (2 percent volume decline and a 17 percent negative impact of price and mix) versus the first six months of 2014.

With Advair/Seretide sales plunging, GSK’s Respiratory sales in 2014 were down 10 percent CER to £6.18 billion ($10.19 billion). The category’s sales decline continued in first-half 2015, falling 8 percent to £2.88 billion ($4.74 billion). A leader in respiratory disease for more than four decades, GSK has a stable of mature products in that category in addition to Advair/Seretide, including the asthma medicines Flovent/Flixotide and Ventolin.

Flovent/Flixotide sales for 2014 decreased 6 percent to £702 million ($1.16 billion). Ventolin sales advanced 11 percent to £665 million ($1.1 billion). For the first two quarters of 2015, Flovent/Flixotide sales dropped off 16 percent year-over-year to £312 million ($514 million) and Ventolin sales were down 4 percent to £321 million ($529 million).

In recent years, GSK has bolstered and broadened its respiratory portfolio with the addition of new products administered by the Ellipta inhaler: the inhaled corticosteroid (ICS) and long-acting beta2 agonist (LABA) combination Breo/Relvar (FF/VI), the long-acting muscarinic antagonist (LAMA) and LABA dual bronchodilator Anoro, the LAMA Incruse, and the ICS Arnuity. FF/VI is marketed in the United States and other countries as Breo, and is available in Japan as Relvar.

During 2014, Breo/Relvar Ellipta produced sales of £67 million ($110 million) and Anoro Ellipta generated £14 million ($23 million). For the first six months of 2015, Relvar/Breo Ellipta sales came in at £94 million ($155 million) and Anoro Ellipta recorded £27 million ($45 million).

According to the company, GSK continues to make good progress transitioning to its new portfolio of respiratory medicines, including the recently launched products Incruse Ellipta for COPD and Arnuity Ellipta for asthma. The next wave of new respiratory drugs is expected to include Nucala, potentially a very significant product that is awaiting regulatory clearance for major markets such as the United States and Japan.

GSK’s Oncology segment produced 2014 sales of £1.2 billion ($1.98 billion), up 33 percent CER compared to the 2013 total. The category’s first-half 2015 sales were recorded at £235 million ($387 million), down significantly year-over-year because of the products’ transfer to Novartis via the three-part transaction.

The Cardiovascular, metabolic and urology (CVMU) segment produced 2014 sales of £965 million ($1.59 billion), dropping 3 percent from the previous calendar term. With growth of 1 percent, the Avodart franchise led the way with £805 million ($1.33 billion) in 2014, with a 17 percent improvement in sales of Jalyn/Duodart and a 4 percent decrease for Avodart.

Levitra declined 28 percent to £100 million ($165 million) compared to 2013. Sales of Prolia decreased 10 percent to £41 million ($68 million) because of the second-quarter 2014 agreement with Amgen Inc. to terminate their joint commercialization deal in various European markets, Mexico and Russia.

On a regional basis for the CVMU category, 2014 U.S. sales declined 16 percent to £364 million ($600 million). That result was partly offset by Emerging Markets, which rose 20 percent to £145 million ($239 million), and Japan, up 14 percent to £114 million ($310 million). Europe came in flat with 2014 sales of £293 million ($483 million).

CVMU global sales during first-half 2015 decreased 2 percent to £460 million ($758 million). The Avodart franchise declined 4 percent to £371 million ($612 million), with 11% turnover growth of Jalyn/Duodart more than offset by a 10% decrease in Avodart sales. Prolia fell 9% to £20 million ($33 million), reflecting the termination of the joint commercialization pact with Amgen.

GSK’s Immuno-inflammation turnover for 2014 rose 40 percent to £214 million ($353 million). Benlysta sales registered at £173 million ($285 million), a 25 percent improvement versus its 2013 global performance. The drug’s U.S. sales amounted to £155 million ($256 million), representing 22 percent growth versus 2013.

For January-June 2015, Immuno-inflammation turnover advanced 23 percent compared to first-half 2014, coming in at £116 million ($191 million). Benlysta sales for the first two quarters of 2015 improved 27 percent to £107 million ($176 million), including 24 percent U.S. growth to £97 million ($160 million).

For the Other pharmaceuticals segment, other therapy areas in 2014 decreased 2 percent to £2.41 billion ($3.97 billion). This result primarily reflected generic competition to Dermatology products, which mainly affected U.S. sales of Soriatane, and a sales drop-off of Mepron in the Rare diseases category. These decreases were partly offset by Relenza sales growth of 39 percent, mainly in the United States, and the inclusion of Theravance Inc. milestone income of £57 million ($94 million) versus £78 million ($129 million) in 2013.

First-half 2015 sales in other therapy areas were down 7 percent to £1.07 billion ($1.76 billion) versus the one-year-earlier six-month period. Augmentin sales fell 1 percent to £283 million ($466 million) and Dermatology sales dropped down 10 percent to £214 million ($353 million), in part adversely affected by supply constraints because of capacity limitations. Relenza sales during the 2015 first half improved 33 percent to £63 million ($104 million), driven by the timing of U.S. CDC orders. Sales of products for Rare diseases decreased 4 percent to £185 million ($305 million), mainly due to U.S. generic competition for Mepron.

For GSK’s HIV business, ViiV Healthcare 2014 global sales grew 15 percent. U.S. turnover improved 28 percent, Europe rose 6 percent, Japan increased 35 percent and Emerging Markets fell 4 percent versus 2013. Tivicay generated 2014 sales of £282 million ($465 million). Epzicom/Kivexa rose 8 percent to £768 million ($1.27 billion), but Selzentry turnover was flat at £136 million ($224 million). Launched during 2014, Triumeq sales were reported at £57 million ($94 million). ViiV’s 2014 growth was partly offset by decreases in the mature portfolio, mainly driven by generic competition to Combivir, down 46 percent to £59 million ($97 million), and Trizivir, which decreased 61 percent to £36 million ($59 million).

GSK’s first-half 2015 worldwide turnover improved 51 percent to £1.01 billion ($1.66 billion). U.S. sales rose 76 percent versus the first-half 2014 result, Europe advanced 40 percent and International grew 18 percent. Tivicay sales reached £257 million ($424 million) and Triumeq totaled £230 million ($379 million). Epzicom/Kivexa turnover for the first six months of 2015 went up 1 percent to £361 million ($595 million), but Selzentry fell 14 percent to £61 million ($101 million). Combivir and Lexiva sales fell 41 percent and 19 percent, respectively, versus the first two quarters of 2014.

Sales during 2014 for GSK’s Established Products segment declined 16 percent from the one-year-earlier time frame to £3.01 billion ($4.96 billion). U.S. turnover went down 31 percent to £854 million ($1.41 billion), Europe decreased 13 percent to £601 million ($991 million), Emerging Markets fell 1 percent to £1.05 billion ($1.73 billion) and Japan declined 15 percent to £444 million ($732 million). Generic competition negatively impacted 2014 sales for Lovaza, down 57 percent to £240 million ($396 million), Paxil/Seroxat, down 19 percent to £210 million ($346 million) and Valtrex, which fell 24 percent to £154 million ($254 million).

Turnover for Established Products during the first six months of 2015 declined 13 percent to £1.31 billion ($2.15 billion). U.S. sales decreased 31 percent to £331 million ($546 million), primarily reflecting a 64 percent drop-off for Lovaza. Europe declined 14 percent to £253 million ($417 million), with Seroxat falling 18 percent to £17 million ($28 million), reflecting increased generic competition to various other products and supply constraints. First-half 2015 International turnover went down 3 percent to £721 million ($1.19 billion), mainly reflecting decreased sales of Paxil/Seroxat because of generic competition in Japan and of Zeffix in China, partly offset by increased Valtrex sales following the regaining of exclusivity in Canada during late 2014.

Vaccines sales during 2014 declined 1 percent to £3.19 billion ($5.26 billion), with a 2 percent decrease in Europe and 14 percent drop-off in Japan partly offset by 1 percent growth in Emerging Markets. The U.S. performance was flat. The Emerging Markets result primarily reflected the strength of Synflorix, Boostrix and Rotarix.

Infanrix and Pediarix turnover in 2014 rose 2% to £828 million ($1.36 billion). U.S. growth benefited from a favorable comparison with 2013, which was affected by a withdrawal from the CDC stockpile. That outcome offset decreases in Europe and Emerging Markets.

Boostrix sales were up 16 percent to £317 million ($522 million), reflecting growth in all regions except the United States. Boostrix’s U.S. turnover for 2014 went down 7 percent, reflecting the return of a competitor during the year and certain supply constraints.

Sales of Hepatitis vaccines decreased 6 percent to £558 million ($920 million) versus the 2013 result, partially reflecting supply constraints that affected the U.S. and Emerging Markets.

Rotarix sales for 2014 advanced 7 percent to £376 million ($620 million), with growth spurred by tender shipments in Europe and Emerging Markets, offset in part by a U.S. decrease, which was impacted by the CDC stockpile withdrawal during the fourth quarter.

Synflorix 2014 turnover improved 4 percent to £398 million ($656 million), mainly reflecting a strong tender performance in Emerging Markets.

For the first six months of 2015, GSK’s Vaccines sales rose 11 percent to £1.5 billion ($2.49 billion), with the United States improving 14 percent, Europe going up 15 percent and International advancing 5 percent versus first-half 2014. GSK says the business benefited from sales of the newly acquired products, especially the Meningitis portfolio in Europe and the United States. Pro-forma sales decreased 1 percent primarily because of the phasing of Synflorix shipments in International markets and a decline in Infanrix and Pediarix, following the return to the market of a competitor vaccine in 2014, partly offset by strong Bexsero growth.

U.S. Vaccines recorded growth of 14 percent (2 percent pro-forma) to £457 million ($753 million) primarily reflected growth in Hepatitis vaccines, Rotarix and Boostrix, benefiting from CDC stockpile order timing and wholesaler inventory replenishment. Infanrix and Pediarix first-half 2015 sales went down 12 percent due to the 2014 market return of a rival vaccine.

In Europe, Vaccines sales during January-June 2015 grew 15 percent on a reported basis (5 percent pro-forma) to £498 million ($821 million). This growth mainly reflected increased Bexsero sales primarily driven by the UK NHS immunization program, Portugal and Italy. First-half 2015 sales additionally benefited from the improved supply of Boostrix (up 29 percent) and MMRV (up 8 percent). The growth was partly offset by a 10 percent sales decrease of Hepatitis vaccines, largely because of supply constraints and tender phasing, combined with a 6 percent drop-off in Infanrix and Pediarix sales stemming from the 2014 launch of a competitor vaccine and the phasing of shipments in several countries.

First-half 2015 Vaccines International sales of £558 million ($920 million) advanced 5% on a reported basis, but fell 8% on a pro-forma basis. Sales of various products, including Boostrix and Synflorix, decreased compared to first-half 2014 due the phasing of tenders in Brazil, the Middle East and North Asia.

Turnover in 2014 of new products —those launched during 2010 through 2014 — totaled £1.46 billion ($2.41 billion), rising 84 percent over 2013 and accounting for 8 percent of Pharmaceuticals and Vaccines sales. Fourth-quarter 2014 sales of new products reached £523 million ($862 million), improving 78 percent and representing 10 percent of Pharmaceuticals and Vaccines turnover.

During fourth-quarter 2013, Breo Ellipta was launched in the United States for chronic obstructive pulmonary disorder. Relvar Ellipta was introduced in Europe for COPD and asthma in first-quarter 2014. Anoro Ellipta was introduced to the U.S. marketplace during April 2014 for treating COPD. Tivicay debuted in the United States in third-quarter 2013 and was introduced in Europe during first-quarter 2014. Triumeq was introduced in the U.S. and European markets during the third quarter of 2014.

For 2014, GlaxoSmithKline’s Consumer Healthcare revenue fell 1 percent year-over-year to £4.34 billion ($7.15 billion), reflecting the impact of supply issues, comparison with a strong cold and flu season during early 2013 and slowing markets in the Rest of World. Estimated worldwide market growth reached 3 percent.

Wellness sales during 2014 amounted to £1.6 billion ($2.63 billion), decreasing 7 percent versus 2013. The sales decline primarily resulted from the supply issues and product recalls that significantly impacted sales of products for Smokers Health, down 29 percent, and alli.

Oral health turnover during 2014 advanced 4 percent over 2013 to £1.8 billion ($2.96 billion). The continued growth of Sensodyne – up 11 percent – was partly offset by a 10 percent sales decrease for Aquafresh that was impacted by supply issues in Europe and the United States, along with increased competition.

Turnover during 2014 for the Nutrition segment rose 10 percent to £633 million ($1.04 billion). Horlicks increased 11 percent, reflecting continued growth in India, and Boost improved 9 percent over 2013. Skin health products turnover declined 11 percent to £310 million ($511 million) compared to 2013, primarily because of lower sales of Bactroban in China.

For the first six months of 2015, Consumer Healthcare revenue improved 37 percent to £2.89 billion ($4.76 billion) versus the one-year-earlier period. The turnover improvement benefiting significantly from sales of the newly acquired products included in the joint venture with Novartis. On a pro-forma basis, sales improved 7 percent (5 percent volume and 2 percent price), mainly reflecting strong growth in the United States following the launch of Flonase OTC. Turnover from new GSK innovations (product introductions within the last three years on a rolling basis) accounted for 15 percent of sales. Other key 2015 launches as of late July include Fenbid Chewable in China, Sensodyne Repair and Protect Whitening in the United States and Germany, and the roll-out of Sensodyne Mouthwash.

Recent product approvals and pipeline updates

GSK possesses R&D innovation with significant potential to drive long-term Group performance. GlaxoSmithKline managers say the company’s R&D organization has produced an exceptional period of productivity since 2009, with more FDA approvals of new molecular entities received than any other company. Following marketing approvals granted during 2013 for the respiratory products Breo Ellipta and Anoro Ellipta, the oncology drugs Tafinlar and Mekinist, and the HIV medicine Tivicay, GSK gained four additional approvals during 2014: Incruse Ellipta and Arnuity Ellipta in respiratory, Triumeq in HIV and Tanzeum for type 2 diabetes.

Significant potential exists in GSK’s advanced pipeline, including a vaccine for preventing shingles, a triple combination therapy for COPD and the new long-acting HIV treatment cabotegravir. GSK is also developing promising early-stage assets in therapy fields such as immuno-inflammation, immuno-oncology and cardiovascular disease as well as various prophylactic and therapeutic vaccine candidates.

The U.S. Food and Drug Administration in late April 2015 approved Breo Ellipta (fluticasone furoate/vilanterol [FF/VI]) for the once-daily treatment of asthma in patients 18 years and older. Breo is a fixed-dose medicine combining the inhaled corticosteroid fluticasone furoate and the long-acting beta2-agonist vilanterol. Two strengths, 100/25mcg and 200/25mcg, were cleared for marketing by U.S. regulators for use in asthma, administered once per day using the Ellipta dry powder inhaler.

Initial FDA approval was granted to Breo Ellipta in May 2013 for the long-term, once-daily, maintenance treatment of airflow obstruction and for reducing exacerbations in patients with COPD, including chronic bronchitis and/or emphysema.

Progress continued for GSK’s new respiratory portfolio throughout second-quarter 2015, including a positive FDA Advisory Committee recommendation for Nucala and a regulatory submission for approval in Japan. Nucala was unanimously recommended for FDA approval on June 11, 2015, for adult patients as an add-on maintenance treatment for severe asthma with eosinophilic inflammation. But the committee voted 10-4 against approval of mepolizumab for use in adolescents 12-17 years of age with severe asthma. A positive opinion recommending EU marketing authorization was announced by GSK on Sept. 24, 2015. The drug was submitted for marketing clearance in Japan on May 22, 2015, for severe eosinophilic asthma.

The investigational monoclonal antibody mepolizumab stops interleukin-5 from binding to its receptor on the surface of eosinophils. Inhibiting IL-5 binding in this manner reduces blood, tissue and sputum eosinophil levels. IL-5 is the main promoter of eosinophil growth, activation and survival, and provides an essential signal for moving eosinophils from the bone marrow into the lung. Eosinophils are a type of white blood cell believed to play a role in the development of allergic airway inflammation.

Another second-quarter 2015 R&D highlight was the positive Committee for Medicinal Products for Human Use decision gained for Mosquirix, which was announced on July 24. The European Medicines Agency’s (EMA) CHMP adopted a positive scientific opinion for GSK’s malaria candidate vaccine Mosquirix, also known as RTS,S, in children aged 6 weeks to 17 months.

RTS,S, which was developed in partnership with the PATH Malaria Vaccine Initiative (MVI), is the first candidate vaccine for preventing malaria to reach this milestone. Whereas other vaccines tackle viruses or bacteria, RTS,S has been designed to prevent malaria resulting from the Plasmodium falciparum parasite, which is most prevalent in sub-Saharan Africa.
Final results from a large-scale Phase III study of RTS,S — including the impact of a booster dose — were published in The Lancet in April 2015. The results demonstrated that the vaccine candidate helped protect children and infants from clinical malaria for at least three years after the initial vaccination.

ViiV Healthcare announced the beginning of a Phase III trial for combination use of dolutegravir and rilpivirine for HIV maintenance therapy on May 6, 2015. The Phase III program consists of two replicate trials studying 48-week viral suppression with a two drug regimen combining the integrase inhibitor dolutegravir and the non-nucleoside reverse transcriptase inhibitor rilpivirine (distributed by Janssen Therapeutics as Edurant) in patients with HIV who have already achieved viral suppression with a three drug regimen.

The Phase III program is evaluating the efficacy, safety, and tolerability of switching to dolutegravir plus rilpivirine from current INI-, NNRTI-, or PI-based antiretroviral regimen in HIV-1-infected adults who are virologically suppressed. ViiV Healthcare and J&J’s Janssen Sciences Ireland UC announced during June 2014 the partnership to investigate the potential combination of dolutegravir and rilpivirine in a single tablet to expand the treatment options available to individuals living with HIV.

Synflorix received a CHMP positive opinion for a major European label extension, as announced by GlaxoSmithKline near the end of July 2015. The updated label includes effectiveness data for protection against invasive pneumococcal disease (IPD) as well as pneumonia and acute otitis media (AOM) resulting from the pneumococcus bacterium. The effectiveness is due to an impact on pneumococcal disease stemming from serotypes included in the vaccine in addition to an impact on serotype 19A, in children aged 6 weeks up to 5 years old, as confirmed by the EMA.

Synflorix is licensed in 125-plus countries, and is the vaccine of choice for more than 45 national or regional immunization programs. Synflorix is indicated for active immunization against IPD, including meningitis and sepsis, in infants and children from 6 weeks through 5 years of age. In certain countries, Synflorix has additional indications including community-acquired pneumonia (CAP), AOM caused by Streptococcus pneumoniae, and AOM caused by non-typeable Haemophilus influenzae (NTHi).

GlaxoSmithKline, along with Fondazione Telethon and Ospedale San Raffaele (OSR), announced during the first week of May 2015 the filing of a marketing application to the EMA for GSK2696273. The investigational gene therapy is intended to treat patients with a rare disease, adenosine deaminase severe combined immunodeficiency syndrome (ADA-SCID), for whom no suitable human leukocyte antigen (HLA)-matched related stem cell donor is available.

The Japanese Ministry of Health, Labour and Welfare (MHLW) approved GSK’s Encruse Ellipta on March 26, 2015, for the relief of various symptoms due to airway obstruction with chronic obstructive pulmonary diseases (chronic bronchitis, pulmonary emphysema). The once-per-day long-acting muscarinic antagonist is a type of bronchodilator that can improve airflow in and out of the lungs. Containing the active chemical umeclidinium, Encruse is administered as a 62.5-mcg strength inhalation powder via the Ellipta inhaler.

On the same day that Encruse was approved in Japan, the MHLW also cleared for marketing Duac Combination Gel and Synflorix. Duac Combination Gel, containing clindamycin 1% and benzoyl peroxide 3%, is the first fixed-dose combination topical treatment for acne in Japan.

The pneumococcal conjugate pediatric vaccine Synflorix was approved in Japan for the prevention of invasive infectious diseases and pneumonia caused by pneumococcus (serotypes 1, 4, 5, 6B, 7F, 9V, 14, 18C, 19F and 23F). Synflorix was developed by GlaxoSmithKline and is marketed by Japan Vaccine Co. Ltd., a joint venture between GSK and Daiichi Sankyo Co. Ltd.

A Phase III program to evaluate the efficacy and safety of the investigational oxytocin antagonist retosiban began in March 2015. Retosiban is being developed as a potential treatment to improve neonatal outcomes of babies born to women in spontaneous preterm labor by prolonging the time until delivery.

GSK and Theravance on Feb. 9, 2015, announced the beginning of a second worldwide Phase III trial to evaluate the effects of the investigational once-daily closed triple combination of fluticasone furoate/umeclidinium/vilanterol (FF/UMEC/VI) in patients with COPD. With an enrollment of 1,800 patients, the FULFIL trial is assessing whether the inhaled corticosteroid, long-acting muscarinic antagonist and long-acting beta2-adrenergic agonist (ICS/LAMA/LABA) combo, all delivered in the Ellipta inhaler, can improve lung function and health-related quality of life versus the twice-daily ICS/LABA combination budesonide/formoterol delivered through the Turbohaler dry powder inhaler.

The first, larger trial in the Phase III program, known as IMPACT, began during July 2014 to assess whether FF/UMEC/VI can reduce the rate of moderate and severe exacerbations versus the approved once-daily COPD treatments Breo/Relvar Ellipta and Anoro Ellipta.

GlaxoSmithKline announced in January 2015 a filing to the EMA of a variation to the Marketing Authorization for Revolade (eltrombopag). The additional indication is for treating pediatric patients (age 1 year and older) with chronic immune (idiopathic) thrombocytopenic purpura (ITP) who have had an insufficient response to corticosteroids or immunoglobulins. The EMA filing, based on the results from the Phase III PETIT2 trial (TRA115450) and the Phase II PETIT study (TRA108062) in pediatric chronic ITP, includes the registration of a new 25-mg Powder for Oral Suspension form for eltrombopag, and also a new 12.5-mg tablet.

Eltrombopag is marketed by GSK as Promacta in the United States and as Revolade in the EU and rest of the world. As of January 2015, the drug was not yet approved or licensed anywhere worldwide for use in chronic ITP in the pediatric setting.

Deals & collaborations

GSK and Novartis AG continued their deal making in August 2015. GSK agreed to divest rights in ofatumumab for autoimmune indications, including multiple sclerosis, to Novartis Pharma AG. Novartis Pharma previously acquired the oncology indications for ofatumumab — marketed as Arzerra — as part of the major three-part transaction between GSK and Novartis AG. Novartis Pharma now owns rights to ofatumumab for all indications. The consideration payable by Novartis Pharma to GSK may reach more than $1.03 billion and consists of a series of milestone payments. Novartis Pharma will pay royalties of up to 12 percent to GlaxoSmithKline on any future net sales of ofatumumab in auto-immune indications.

“We are pleased to have completed this transaction to divest the remaining rights in ofatumumab, crystallizing significant additional value for GSK shareholders,” noted David Redfern, Chief Strategy Officer of GlaxoSmithKline. “We continue to focus on progressing our pipeline in core therapy areas including HIV, oncology, vaccines, cardiovascular, immuno-inflammation and respiratory diseases. We believe GSK’s pipeline has significant potential to drive long-term performance for the Group and will be profiling it further at our R&D event in November.”

To satisfy regulatory clearances as part of the transaction, GlaxoSmithKline additionally agreed during June 2015 to divest its legacy meningitis vaccines Nimenrix and Mencevax to Pfizer Ireland Pharmaceuticals. The two vaccines are sold outside the United Sates and generated joint worldwide 2014 sales of £34 million ($56 million).

The sale follows commitments given to the European Commission and other regulators in connection with the merger control clearances obtained for GSK’s three-part transaction with Novartis. As part of the transaction, GSK’s acquisition of Novartis’ vaccines business (excluding influenza vaccines) included the meningitis vaccines Menveo and Bexsero.

GlaxoSmithKline during July 2015 became the first pharmaceutical company to establish a collaboration with the Francis Crick Institute, the UK’s newest biomedical research facility. GSK and the Crick are partnering on an open innovation collaboration to explore new avenues of medical research and drug discovery across a wide array of diseases, with a view to achieving breakthroughs in the understanding of human disease. Various projects within this collaboration exploring diseases such as HIV, malaria and cancer were expected to begin during 2015, building up to a steady state of 10-15 projects in 2016.

GlaxoSmithKline is making a substantial investment to launch the Altius Institute for Biomedical Sciences, a Seattle-based independent, non-profit research institute. Altius — which means “higher” in Latin — will pioneer new technologies and approaches for decoding how genes are controlled and how a cell’s “operating system” works in health and disease. GSK anticipates capitalizing on rapid progress in understanding gene control to select and validate better drug targets, and to accelerate many key aspects of developing new medicines.

GSK and The University of North Carolina at Chapel Hill announced in May 2015 a novel partnership to accelerate the search for an HIV cure. The unique public-private collaboration will create the HIV Cure center as well as a new company to join together academic and pharma research scientists. The partnership is expected to redefine the traditional way of performing research and create a new model to seek the breakthroughs necessary to tackle an extraordinarily challenging global health issue.

UNC-Chapel Hill is a leading worldwide public research university with significant expertise in HIV basic and clinical research. The HIV Cure center will be based on the UNC-Chapel Hill campus and will concentrate exclusively on finding a cure for HIV/AIDS. The new company, Qura Therapeutics, will manage the business side of the partnership, including intellectual property, commercialization, manufacturing and governance. Together, the HIV Cure center and Qura will serve as a catalyst for other partners and public funding that will likely be necessary to eradicate HIV worldwide. The collaboration is additionally anticipated to recruit and attract top talent from around the globe.

GSK during late April 2015 presented detailed data from a randomized Phase III trial of the company’s investigational vaccine candidate for the prevention of shingles. Vaccine efficacy was maintained by HZ/su across the age groups from 50 years to 70 years and older.

GSK in March 2015 became a key partner in pioneering a new worldwide fund for dementia research with a $25 million investment. The Dementia Discovery Fund, which is being established by the UK government with initial commitments amounting to $100 million, joins together leading pharma companies, the UK government and Alzheimer’s Research UK to address the growing threat posed by dementia by supporting research into future treatments.

GlaxoSmithKline is strengthening the company’s presence in Singapore by establishing a new worldwide headquarters for Asia, further expanding its commitment to patients and consumers in the region. Announced in March 2015, GSK inked an agreement to develop and lease a new building that will serve as the company’s new global headquarters for Asia. Situated at the ‘one-north’ development in the Rochester Park area of Singapore, GlaxoSmithKline will relocate all employees currently based in Gateway West to the new headquarters during second-half 2017 once the site is fully operational.

The specialist vaccine biopharma company GlycoVaxyn AG was acquired by GlaxoSmithKline, as announced in February 2015. Since forming a scientific collaboration in 2012, GlaxoSmithKline has held a minority stake in GlycoVaxyn and subsequently acquired the remaining shares for $190 million in cash to take full ownership of the Switzerland-based company.

GlycoVaxyn has developed an innovative biological conjugation platform technology that has the potential to play a significant role in the development of new prophylactic and therapeutic vaccines for a range of bacterial diseases. This proprietary technology additionally has the potential to allow GSK to develop a simplified conjugate vaccine manufacturing process.

GlaxoSmithKline acquired through GlycoVaxyn a small amount of early-stage vaccines in development against bacterial infections including pneumonia, Pseudomonas, Staphylococcus aureus and shigellosis.

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