GSK Bets $2 Billion On Bellus Cough Drug To Soothe Pipeline Fears


GSK plans to buy Canada-based drug developer Bellus Health Inc in an all-cash deal for $2 billion as the British drugmaker expands its bet on respiratory therapies.

The move to replenish its pipeline comes as GSK investors fret about whether there is enough in the medicine cabinet to keep the momentum going into the next decade with expected loss of patent protection of one of its key compounds.

At the heart of the deal – announced by both companies on Tuesday – is the experimental drug, camlipixant, which is in late-stage development as a treatment for refractory chronic cough (RCC).

The condition can cause patients to cough more than 900 times a day for more than a year. Some 10 million patients globally suffer from it and so far, there are no approved therapies.

GSK’s offer of $14.75 per share is more than double Bellus’ closing price of $7.26 on the Nasdaq on Monday.

The Bellus deal expands GSK’s existing respiratory portfolio, including Nucala and Trelegy, which generated more than a combined 3 billion pounds ($3.73 billion) last year.

Camlipixant is up against Merck’s rival drug, gefapixant, for RCC patients.

Early in 2022, gefapixant was denied approval by the U.S. regulator, which sought more information on its effectiveness – but the U.S. drugmaker is expected to resubmit an application for another review later this year.

Still, some analysts say camlipixant – should both drugs be eventually approved – could emerge as preferred option with a superior safety profile.

Jefferies analysts estimated camlipixant could generate peak U.S. sales of $1.2 billion, in a note earlier this month.


Investors are particularly interested in GSK’s future plans, given the pending loss of patent protection in 2027 for dolutegravir, the compound that forms part of four GSK’s HIV treatments, which puts more than 5 billion pounds of sales at risk.

The company is leaning in part on the prospects of its own vaccine targeted at the respiratory syncytial virus (RSV), which causes thousands of hospitalisations and deaths a year, to at least partially offset that loss.

It has also announced a string of deals including a buyout of Affinivax and Sierra Oncology to plug the gap.

Still, the company also has culled a handful of programmes from its pipeline in recent months and suffered setbacks in its marketed cancer drug portfolio.

Demand for its flagship blockbuster Shingrix vaccine is also expected to eventually saturate.

(Reporting by Aby Jose Koilparambil in Bengaluru and Natalie Grover in London; Editing by Savio D’Souza and Louise Heavens)

Aby Jose Koilparambil
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