GSK plc (GSK) Earnings Call Transcript & Summary

Okay. Thanks, everybody, and thanks for joining us this afternoon for a fireside chat with GlaxoSmithKline. I'm Seamus Fernandez, Guggenheim's Global Pharmaceuticals Analyst. I'm joined by Rino Rappuoli, Glaxo's Chief Scientist and Head of Vaccines. Rino is a well-renowned vaccine scientist, most notably having pioneered the genomic approach to vaccine development, known as reverse vaccinology, the technology underpinning Bexsero. He joined GSK in 2015 upon the acquisition of Novartis Vaccines, where he served as Global Head of R&D for Novartis Vaccines. So maybe just to kick us off. Rino, thank you so much for joining us today. I know that it's late in Italy, but really appreciate you joining us. So just to begin with, hoping that you could walk us through a little bit of the technology platforms that Glaxo really brings to the table across vaccines and infectious disease. I know you've got mRNA adjuvant technology, glycoconjugates, viral vectors, but love to know how you're approaching the different technologies and where they can be brought to bear towards Glaxo's pipeline?

Well, thank you. Thank you. It's a pleasure to be with you today and to talk to you about our vaccine portfolio and our pipeline. So about technologies, I think it's very important to understand that making vaccines requires -- it's not one technology you can fix everything. Recently, obviously, we have seen the RNA technology coming and basically delivering very fast COVID vaccines. So that's a technology, which is very important, it's going to solve a lot of -- already solved the problems of COVID. And it's going to solve probably many other things. But like all technology will solve some problems, but not all of that. Areas where I find difficult, sometimes impossible for RNA to work on are, for instance, bacterial vaccines where you have capsular polysaccharides [indiscernible]. These are sugars, cannot be encoded by RNA. So it's out of a question that RNA cannot be used. And we do have a lot of very important vaccines, which are part of the bacterial polysaccharide conjugate vaccines. Those are meningitis, those are pneumococcal, and there are several others in the pipeline. So we need to have glycoconjugate technology in order to approach those things. And then obviously, we have adjuvants. Adjuvants are essential for protein-based vaccines to make basically some vaccines to induce a strong immune response. So -- and we have the perfect example of Shingrix for zoster that thanks to NEJM, basically, we can get more than 90% efficacy in 90 years old people. I mean, basically, somehow we rejuvenate the immune system of the elderly and they respond. So those are essential things. And then we have viral vectors that basically are a way to deliver basically genes into the host and get a response. So basically, what I'm telling you is that in order to be in the vaccine field and to be able to deliver vaccines against most of the partitions, you need different technologies. And we have, I believe, the broadest portfolio of technologies in the industry.

Great. And then recently Glaxo outlined the 10-year outlook as part of new GSK. Obviously, vaccines is a major driver of the future of the company and I think rightfully so. But hoping that you might talk a little bit more about the target selection, and I know this comes into sort of commercial decisions to some degree. But maybe you can talk a little bit about how from a research perspective Glaxo is really positioning itself for leadership in the vaccine space and the areas that you're particularly excited about, let's say, over the next 5 years.

Well, clearly, I mean, we are a vaccine company try to target infectious diseases. We would like to solve as many as possible. When we select our targets, obviously, we combine a number of things. The first thing is a medical need, whether there is a problem for a society we can solve. If there is a problem that we can solve, the next question is, do we have the technologies within knowledge of science that will allow us to solve that problem within 5, 10, 15 years. And then if the answer is yes, then the question is, can we -- is actually that commercially attractive. And then when we combine these 2 things. Obviously, if there's no medical need, we don't do it. If we don't know how to make it, we don't do it. And then commercially is the debate how attractive that is and how competitive we can be. So those are the 3 drivers that -- for us, and that's the way we build our portfolio. And obviously, we like to win. We like to be there first or among the first and basically provide our vaccines to the people globally as soon as we can.

Great. And so maybe you can talk a little bit about RSV specifically. It looks like you have an opportunity to be first to market with the RSV active immunization, in particular. You've got 2 pivotal Phase IIIs underway in a blend of both the maternal and the older adult setting. Maybe you can just walk us through how your technology and your data differentiate from other competitors? And I know that this is a challenging space previously. But what really has been the advantage here. Is it predominantly the adjuvants and bringing the adjuvants to the table or have there been other tweaks that Glaxo has had to bring to the table in order to advance vaccine or an RSV vaccine with kind of robust immune response we've seen so far?

Well, thank you for this question. I mean, honestly, first of all, I'm pretty excited about it. I'm very excited because this is a target that -- I mean, people start to make vaccines against RSV in 1967 and went through one failure after the other. And the -- because there was no scientific solution, then it was thanks to the new technologies that we understood that RSV had a prefusion and postfusion antigen and that the prefusion was a solution. That came 2012, 2013. And since then, we really decided that we really wanted to make a vaccine, which was better needed for such a long time. And so we have done all the prefusion Phase I, Phase II, and we are now in Phase III studies, and we are willing to deliver basically one vaccine for older adults and one vaccine for maternal immunization. The antigen is the same. It's an excellent antigen locked in the prefusion confirmation, induces very good antibodies in humans against A and B, RSV A and RSV B. So we feel very good. And for the older adults, we decided to add an adjuvant. And the reason to add an adjuvant is that, as I said before, the immune system, the elderly, basically is aged as well. So it doesn't respond that well. And we have seen that in our Phase II trials, that basically when we use the adjuvant, not only do we get extremely high neutralizing antibody titers, but we also get a very good response in the T cells, which mimics or goes back to -- is identical, if you like, in the same range of the younger adults. So basically, we are not only getting good antibodies, but also getting very good young like people T cell response. So I think that's exactly the right balance that we need for basically getting a very efficacious vaccine.

Great. And maybe just because we know that there's a number of different targets. I think Pfizer's approach is actually quite similar to Glaxo's approach so far, although they don't have the AS -- adjuvant technology to bring to the table. You also have Johnson & Johnson's approach with an antiviral vaccine. And then lastly, we've seen some particularly robust immunologic data with an mRNA vaccine for [indiscernible]. I'd love to just get your broader thoughts on the competitive landscape and the importance of being first. And then if there really -- if you see much differentiation from a first-in-class versus best-in-class perspective.

Yes. Thank you for the question. Yes, the field has become crowded, although we were among the first to start, but the field is clouded now. So many others coming. And I believe we have several assets that will allow us to get there among -- first or among the first ones and with -- possibly with a differentiated product. The differentiation is going to be based on the fact that we have an adjuvant. The adjuvant has shown its potency with Shingrix. So we know really can make a real differentiation there, especially in the older adults population. So I think we really do count on the adjuvant to give us a differential efficacy or maybe longevity of immune response and these kind of things. For whether we're going to be there first or not, obviously, we started before all the others, our Phase III trials. We are enrolling at pace, we are moving faster. So we'll be there. And obviously, the competition is fierce, but we are, I think, in a very good position to be there with an excellent vaccine and with good timing.

As -- in terms of the mRNA based approaches, just love to get a better sense of where you think mRNA technology can advance, particularly in RSV. And if there are limitations that you see to -- just the applications of mRNA to other retroviruses as well. And how Glaxo is thinking about its own efforts with mRNA?

Well, obviously, RNA is very exciting. It's a new technology, and we are all very excited. But as I said before, I think, is if you like, RNA had an easy start with COVID. I mean, for COVID, every single vaccine technology has been tested a little bit better or less, they've all been working. So -- and that's fine, it's perfect, it's fantastic. We are very happy about that. The question is how competitive it's going to be against other technologies in the -- in other targets. And that, I think, is going to be good, but we don't know the answer yet. So we need to do the trial and see how it's going to work, how it's going to compare with the adjuvants in terms of -- basically in type of immunity, duration of immunity, all those kind of things, all these things, we don't know yet. So I think RNA is something that we and others are -- will try against many different targets beyond COVID and will see with discovery how it's going to work. It's good for us that we have, in addition to the RNA, we also have the possibility to use recombinant proteins plus adjuvants, viral vectors and for bacterias, as I said before, we're going to use glycoconjugates and the other. So I think we have all the tools to compete there. And when the RNA is the best solution, we'll be there, except for COVID where we came late.

Got it. Okay. Great. And as we look at just sort of the mRNA approaches that you are pursuing, you've highlighted COVID [indiscernible] specifically. Just hoping to talk a little bit about that in some detail. We started to see some decisions, frankly, economic decisions being made by other players in the space like Sanofi, who's decided commercially that it's not worth it to continue pursuing a COVID vaccine. But as you think about the technology that can be brought to bear with mRNA, I think Glaxo has talked about flu and also about COVID, just so you might be able to walk us through that a little bit in terms of how you're thinking about the approach, just given how broadly available the current COVID vaccines are and how successful they've been at least at the start.

Yes. I think the RNA is -- I mean, if you like, we missed the first wave because when COVID arrived, we were -- our internal technology, the SAM, the self-amplification technology was not ready to go. That's why we decided for COVID to do what we are very good at to basically provide our adjuvant to other manufacturers that we could provide vaccines to the rest of the world, vaccines that are all in Phase III are going to work well. Then since we're not ready for that, we decided to partner then with a partner that will be already at scale, and the partner is CureVac because they have a technology that is scaled up, they can manufacture. They have solved all the problems that most of the biotechs have not solved yet. And they had a COVID vaccine. We knew from the public information that the immunogenicity of the first-generation COVID vaccine was not good enough, so we did not partner with that. But we partner with the second generation they had. We have seen the preclinical studies that were showing that was up to tenfold better in terms of immunogenicity of the first generation. So we partner for that. And to be sure, we did not finish there, we said okay, maybe the second generation is good enough, but we know that for sure, the solution is modified. So we added the modified basis to our -- basically portfolio. So now we know that we -- CureVac is basically we are going to work together in the second generation, which is supposed to be more powerful than the first one. And we have the option to do second-generation, non-modified and modified for COVID. Similarly, for influenza, we have added the option to use with modified basis because we know that, that thing is going to work. And so basically these are the options we are putting together, both for COVID, for influenza and for other targets we are discussing with them.

Great. So -- is the use of [indiscernible] from your perspective, the clarifying breakthrough that's [indiscernible] vaccines effective or do you have pretty strong hopes that an unmodified approach or perhaps even a self-amplifying approach could have efficacy whether it be in flu or also in -- against COVID?

Well, clearly, what we know today is the modified vaccines work because they manage to get a good balance between immunogenicity and reactogenicity. Clearly, most of the people, including us, are putting the modified as an option because that works. That doesn't rule out yet that no modifier is not -- is going to work. Just it's going to take a little bit more time, we are exploring that. And we'll figure out how it's going to go basically. I mean there are a lot of alternatives, I believe, that could be possible for non-modified. But we are not there yet. So I think it's important. We need to be very pragmatic, I mean -- and follow the results

Great. Great. Maybe shift gears to the bacterial portfolio. I know this is an area that's near and dear to your heart. We've got a number of products in the pipeline, a later stage meningococcal programs, earlier staph, C. diff, [ shingo, others ] there's just a whole host of products out there. Maybe you can just walk us through what you're most excited about, and then we can drill in a little bit from there?

Okay. Well, I mean the one we're most excited right now is meningococcal. That has been my baby, I work on it. I think we did something which was previously believed impossible. And now we have vaccines that cover all meningococcal meningitis globally. So -- but they're licensed as 2 separate vaccines, one is Menveo, the other 1 is Bexsero. And obviously, for conveniences, would be nice to put them together so the people with one injection can be immunized against every meningococcal strain worldwide. So that's the Phase III we are running right now, putting the 2 products into one. And as soon as we get that, I think we'll be -- I mean we have a global solution for every single meningococcal things. Then obviously, the other -- before the COVID-19 pandemic came, I was working with I thought it was the next pandemic. I still believe it's going to be the next pandemic at this point after COVID, which is antimicrobial-resistance. And antimicrobial resistance is a pandemic that is moving very slowly, but it's coming. There's nothing that's going to stop it. And therefore, we -- and we know that you can use antibiotics. But I mean, as soon as you have one antibiotic, immediately you have resistance. So overall, there's not much resistance to vaccine. So if we can approach the antimicrobial resistance with vaccination, I think we'll have a long-term solution. And that's why we have Staph. Staph is another vaccine like RSV. I mean, there have been so many failures and nobody has been able to vastly track this bacteria. I do believe that we have a solution for that because we developed a vaccine, which [ has layer ] for all the failures of the past. We have put an adjuvant that we know is basically providing superior immunogenicity and efficacy and other things. So I think Staph is the next thing where I mean we want to succeed where everybody else failed, and I think we will. C. difficile is also we want better solution than what's available today. I think we have that. I think -- and that's another place where the adjuvants and things really do play a role. And so -- and then, obviously, we are expanding our portfolio into more and more bacteria which are assistance for antibiotics. Pneumococcal is one example, for instance, we're working on.

And that was one that I did want to touch on in terms of the pneumococcal disease. I wanted to just get a sense of what Glaxo's technology will bring to the table. We're now at a 20-valent pneumococcal vaccine. Obviously, you have Synflorix as a baseline approach. But when might we see some data on Glaxo's pneumococcal approach? I know that there are others moving forward as well better from a couple of small biotech companies.

Well, I think in pneumococcal, obviously, we used to be leaders, I mean, coming with a 10-valent vaccine a long time ago. And obviously, now we are not leaders anymore, we are fully behind. So I think our next move can be basically jumping from 10 to very high very high number of strains. And we are working on it. We are looking into that. We don't have yet a plan, but we are seriously considering that. It's also an area that is becoming crowded because [ Americans ] on top of Pfizer now is out there. But it's clearly an area where we want to be present because the vaccine that we have now is not competitive any longer. So we need to do the next step and become competitive again.

Great. And maybe just in our final 2 minutes just going to give you an opportunity to highlight any products that we haven't talked about, that you're particularly excited about or an area of vaccine or in the bacterial space that you're particularly enthusiastic about?

Well, maybe -- I mean, I think you have been very good asking all the questions about vaccines. So I don't think we left out major things. But one area which is exciting is -- in GSK is basically the fact that now we are putting together -- our resources together with the pharma organization. And there, we have been able basically to start to look at infectious diseases to things which we know are complementary to vaccines, which are human monoclonal antibodies for infectious diseases. And we already have one example of one antibody, which is being -- it's approved for emergency use against COVID. And we are looking at other things about influenza. And that's -- I think that's another area of business and of prevention and therapy for infectious diseases, which has been neglected so far, which I think has a potential to develop a lot. So they're also very exciting. And also because when we do a research in -- for vaccines, we do develop human antibodies because they help us identify the antigens to set up potency assays for regulatory purposes. So we already do all the discovery. So I think it's a pity that so far, we have not been using this power of our research, not only to the level of vaccines, but also to develop monoclonal antibodies. Somehow, I consider them a byproduct of the vaccine research that can be -- somehow can get to market faster than vaccines and with additional benefits for people and for business.

Great. Then I think maybe just to wrap up, we didn't have an opportunity to cover hepatitis B. But I know that, that's another area that has a great deal of interest in Glaxo. Many, just to -- as a final question, in hepatitis B, when do you think we'll start to see some meaningful advances in hepatitis B? I know there's a number of different approaches out there. When would you hope to see some real meaningful advances coming forward?

Well, I think I hope soon. We are basically the -- I mean the prevention, I think, is done, it's just a question of implementation that we have been pioneers there. Now the next question is, can we actually use vaccines to cure people who are chronically infected with the hepatitis B. And so we are -- and that's another place where we are basically putting our knowledge and know-how in vaccines, together with our pharma colleagues basically to come up with a better combination in vaccines and drugs and potential therapies to see whether actually we can solve -- make therapeutic vaccines to basically be able to tackle the problem in chronic caveats or hepatitis B. So that's the next challenge, it's not easy, but we have been there before in things which were impossible and became possible shortly after.

Great. Well, Rino, thank you so much for a really great overview and discussion of Glaxo's vaccines portfolio and all the efforts going on at Glaxo. Really look forward to speaking with you again. Thanks so much.

Thank you. It's been very nice to talk to you.