GSK plc ($GSK)

Great. Thank you for coming, everybody. I'm James Gordon, Barclays European pharma and biotech analyst. And today, I've got the pleasure of hosting a fireside with GSK. So we're going to hear from GSK Chief Strategy Officer and Chairman of ViiV, David Redfern. Thanks for joining us today, David.

Thanks, James. Always great to be in Miami. Very nice to be here.

And we've got quite a lot to talk about because David's got a pretty broad remit. So I think we're going to try and talk a bit about the strategy for the overall GSK Group, but we're also going to talk about business development. And then as Chair of ViiV, we can also have a chat on HIV as well. So maybe just to start off, though, so you've got a new CEO, Luke Miels, although he's not entirely new because he's been there a while. Any early feedback about changes under Luke? What are we seeing on what changes might we have?

Yes. Well, we're 2.5 months in. I mean I think -- I mean, firstly, I think Luke will be much more expressive in the second half of the year. But that said, I wouldn't expect any kind of big strategic shifts in the direction of GSK. I think the therapy areas that we play in respiratory inflammation and immunology, oncology, increasingly a very fast-growing business in oncology in both solid and hematological tumors and pretty much everything in infectious disease. Obviously, we have a big vaccine business as well as HIV and increasingly in things like hepatitis B. So that is clear. I think capital allocation, very clear. We're very clear on the dividend, investing in the business, business development. Luke has been a big driver of that with Tony Wood and I over the last few years. That continues. You've seen us be pretty active on that this year and the guidance that we've given that Emma set out, he has reaffirmed. So I think you should think of Luke is very much focused on doubling down on execution, driving growth, simplifying the business and particularly over the last few weeks, really getting into the R&D pipeline and particularly the sort of the Phase II assets, so we can talk more about those, things like B7-H3, B7-H4, TSLP program, FGF21 that we got from Boston Pharma and really digging in with the teams on how we make things like dose escalation, dose optimization decisions in a bolder, quicker way, how we can recruit patients, set up the protocols, run the studies faster. So there's a real focus on pipeline execution, particularly the mid- to late-stage assets that are really going to drive the growth in the 2030s.

And you mentioned M&A, and so you're also heavily involved in business development. So maybe first, what are the two deals you've done recently because we've had two quite recent deals. So why did you go for those assets? What's the appeal?

Yes. So we have been busy, and it's very much part of the strategy to continue to invest to build the pipeline, particularly through the 2030s. So the two M&A deals, we've done more than that. We've also done some licensing deals with people like Frontier. But we bought and have now closed RAPT, which brings a medicine for food allergy, very similar to Xolair, which is doing incredibly well here in the United States, but with a much longer half-life and then potentially up to 12-week dosing and a simplified dosing regimen. I mean food allergy, massive issue, 17 million people here in the U.S., enormous burden on the health care cost in terms of hospitalizations and so forth. It obviously builds on our respiratory expertise. We have an allergy sales force. And we think -- the RAPT asset is an improved version of Xolair because of the longer half-life and a simpler dosing regimen. And also potentially, we can access the 25% of patients that either through weight or IgE level, Xolair can't. So we're excited about that. And that's pretty symptomatic of the type of deals that we're trying to do, which is some level of scientific derisking, so either precedented target or a precedented mechanism, but with the potential to be best-in-class through some differentiation and in therapy areas where we have a very clear capability and right to win or very close adjacencies to those. And the second deal we announced, I think, only last week, 35Pharma, a Montreal-based biotech company that has a drug for pulmonary hypertension. So again, built on our respiratory expertise. We've had drugs previously VOLIBRIS and FLOLAN in that area. Again, precedented mechanism. This is an activin pathway inhibitor, but potentially spares something called BMP-9 and 10, which is involved in increased bleeding risk. So this is -- think of this as sotatercept like the Merck asset, but potentially with less bleeding. It's very early, I have to say. So there is a bit more clinical risk around this. It's only in Phase I, but potentially a very big medicine in that indication.

And I think of GSK is having quite a focus on infectious disease and oncology, which these 2 aren't in. Is it just chance that these aren't infectious disease in oncology? Or is it quite deliberate you want it to be broader?

Well, it's not chance. I mean we have -- I mean, infectious disease, definitely, we're very strong in, but we're extremely strong in respiratory, and we're building out adjacencies and things like inflammation with the Boston Pharma deal. We've got a lot of science around fibrosis developed with lung fibrosis. So it's natural to move that into the huge indications of liver fibrosis. So I don't -- this is not a chance. We're very thoughtful of where we go. We will do deals in oncology as well.

And in terms of the scale of deals you do, I said these are sort of moderate-sized deals rather massive deals. Is that also quite a deliberate thing that rather than want to do one big bet, you want to have quite a broad portfolio of assets?

Yes, I think so. I mean we've never ruled out doing a bigger deal if the returns and the stars aligned on it. But I think we've been pretty active doing a series of these sorts of deals. What we're really trying to do is drive meaningful growth through the 2030s. I mean that is what is behind all of this. I think the pipeline is building up extremely well to be able to do that.

And would you consider doing deals for assets that were launched this decade? Or you think that the outlook is strong for this decade such that it's only really post 2030s you want to be having a boost?

We wouldn't rule it out. I mean we clearly bought Sierra a few years ago now, which gave us Momelotinib, Ojjaara in myelofibrosis and particularly myelofibrosis patients with anemia, which is a significant proportion of them. That was a very late-stage asset. It's doing incredibly well. But there aren't that many unencumbered really late-stage assets, and they're extremely expensive. So I think we're in a pretty good space doing what we're doing.

Makes sense. If we could switch to talking about new product launches because there's a few things going on there. I actually one of them -- I hosted a panel yesterday, which was about respiratory, which got a lot of interest. And we were talking about longer-acting therapies in respiratory. So you've got Exdensur, a longer-acting IL-5 is 6 monthly. How should we think about that fitting versus the other drugs that are already out there that are biologics that are shorter acting?

Yes. I mean we're super excited about Exdensur, every 6-month dosing, I think that is very significant compared to the shorter-acting IL-5, which are 4 to 6 weeks. The thing about severe asthma is it's very underpenetrated with biologic agents, only about 27% of asthma patients take a biologic agent. So there's a real opportunity for increased bio penetration market development here. And I think all the feedback we're getting, and as I say, it's early days, but the qualitative feedback from physicians, [indiscernible] 6 monthly dosing will be extremely helpful in increasing that penetration. We will, of course, get some switches. I mean there will be patients that will naturally want to switch from every month to every 6 months, obviously, a lot more convenient. But we're really focused on driving Exdensur into that bio-naive population. Early days, but everything is on track.

And I think there was a study that came out that showed it wasn't quite noninferior for an Exdensur versus Nucala. But does that impact how you plan to do the launch?

We're pretty relaxed. I mean that was a nimble study. It wasn't statistically powered to show that. The switch indication is in the label. All of that was disclosed to the FDA. So I don't think -- we don't anticipate that will impact the launch, and it reinforced actually the safety data of the product. So we're pretty relaxed about that.

And is this a category where it can take some time to get insurance coverage, and that's a bit of a headache?

Well, there's nothing particularly unusual about it. I mean it always takes a quarter or two to go through the discussions with the insurance companies, but we expect this very much to be in the ordinary course. I think the payer proposition for it given the burden of severe asthma exacerbations often lead to hospitalizations and so forth. So we don't anticipate anything being particularly difficult or unusual. It always takes a quarter or two. And the other thing I'd say about Exdensur is it's Part B. There's about 25% of severe asthma patients that are Medicare patients here in the United States. That's very different actually from COPD, where Medicare is the majority of the patients. So we are also in the process to get the J-code, which will take a few months. But everything on track, all in the ordinary course. And I think we're very excited about the potential. And of course, we're talking about severe asthma. We've started the studies now in COPD as well.

And maybe just on that, so we also talked about COPD yesterday. So you've got the only IL-5 approved for COPD. How is that launch going?

It's going extremely well. I mean we showed some data in Q4. There's been a big spike up in Nucala NBRx. I think there's also probably a halo effect from the COPD indication across asthma and nasal polyps. So yes, Nucala is doing very well. I think the metric that is really resonating is a 35% reduction in exacerbations leading to hospitalizations. And that's what you're really trying to do because it's a progressive disease. It's incredible the burden of COPD if you go into any emergency hospital, how many patients have COPD and taking out resource, 10% of patients that are admitted never come out of hospital and 50% die within 5 years. So there's a real unmet medical need to come up with new agents.

Actually, just on that point of new agents, and there's some other mechanisms as well. So we've got Dupixent of [ 413 ]that's approved for COPD. And then we're also soon going to get some data for an IL-33. I believe TSLPs also in development. I think you've got quite a few, including some longer-acting versions going after all those targets. So when could you broaden what you're doing in COPD? And how do we segment...

We have Nucala today. We're running trials in different levels of severity of COPD patients now just getting underway underway [ ADJUVANT ] and VIGILANT trials with Exdensur for 6 monthly. We also have potentially the 6-monthly TSLP. We will definitely take that into COPD and we still remain pretty excited around the science of IL-33. And obviously -- and we have an IL-33 that we are progressing, and there is obviously the potential to create combinations of those over time. We're doing a lot of work on patient stratification, a lot of AI actually has been very helpful in -- because COPD was always thought of as just sort of one disease caused by smoking, but actually, you can stratify it in many different ways. Eosinophil level is clearly one. I mean, very simply, the IL-5s are most suitable of eosinophils over 300, maybe TSLPs above 150 and IL-33 across all levels. But I think we will get a lot more sophisticated as we move these clinical development programs forward in really identifying different categories of COPD patients that these can work for.

What if we shift to your other launch, which is Blenrep? Yes. So I don't know how accurate the IQVIA data is, but that looked like a pretty strong ramp initially in Q4. There may be a little bit softer at the beginning of the year. But is that data very reliable? And how is the launch actually going?

Again, it's very early days, but we're very pleased with everything we've seen so far. You can't totally rely on IQVIA, although it is showing very strong growth, but it's obviously Part B as well. So IQVIA is incomplete. I mean, two things are very important with Blenrep. Firstly, it's an incredibly efficacious medicine. We saw that from the DREAMM-7 results, progression-free survival, almost 3x the standard of care with daratumumab and a 50% reduction in the risk of death. So it's very meaningful. That efficacy is absolutely resonating with the hematology community. I think there is a real enthusiasm for a BCMA agent post the first line or post CD38. And the other thing about Blenrep, it's a very simple infusion, takes about 25 minutes to half an hour, can be given on an outpatient basis. So it's incredibly well suited for the community. And here in the U.S., 70% of patients and hematologists are in the community. So we're excited about that. It's obviously third line initially in the U.S., second line in the rest of the world. We're just rolling out ex U.S. The U.K. was the first market. No hard data points at this point, but everything very much on track.

And is there a lot of work to do in terms of training both the doctors and also ophthalmologists. And so I think at one point, GSK talked about going slow to go fast. Do you need to go quite slow before you go fast or you quite...

I mean I think what we mean by that is we're very keen that the early patient experience for both the patient and the hematologist is positive. So we're encouraging the hemes to be very thoughtful around which patients they put on it initially and then work very closely with them. On the REMS, it's much simpler than Blenrep 1.0. It does require an eye exam each dose in the United States. In the U.K., it's just for the 4 doses, but that can be done routinely by a high street optician. It's a very simple slit test. They're very experienced in dealing with cancer patients. We've trained several thousand opticians across the U.S. And the qualitative feedback we're getting from hematologists and the opticians is that process is all working pretty well. And the paperwork associated with it is actually massively simplified.

Great. Well, I definitely want to ask lots about HIV because of your ViiV Chairman role. Maybe I'll just ask one about the pipeline before switching to HIV. So one of the interesting readouts, I think, this year is camlipixant. So there's two elements. Just generally, how excited are you about these readouts for chronic cough? And then the other question, could there be differences between the two trials? Because I think I've heard a comment from GSK that the second trial might have people that cough even more, like the more acute patients and more severe patients. So how do you think about the two different trials and the overall excitement for the program?

Yes. I mean, look, refractory chronic cough is a serious condition. We know that there's about 1.8 million people in America being under the care of a pulmonologist. The pathway there is often quite different. 50% of them have probably seen 3 other different types of doctors, allergists, GPs and so forth on the route. And there's really nothing today that really treats it. They're taking a mixture of OTC cough medicine, sometimes pain medication opiates and so forth. So we're very clear on the unmet medical need. The studies, KALM-1 and KALM-2 will read out in a pooled analysis in the middle of the year. All of that is on track. You're right, KALM-2 has got slightly more patients in and more frequent coughers. So there may be a slight difference. I think I'm right in -- although it's a pooled analysis, effectively, both trials have to statistically hit to ensure that the overall trial hits. So we'll see in the middle of the year. I mean I would remind you that the Phase II data showed a 34% reduction in cough frequency. The Phase III is a 12-week endpoint. We probably expect it to be a bit lower. The 15% to 20% mark will probably be about par because it's a bigger trial. We probably expect a bit more placebo effect, but we shall see. We're not too far away now. So we'll probably have a discussion post results.

That sounds good. In that case, I'd definitely like to switch to HIV. To start with -- so there was the CROI conference recently where you presented quite a few data points. And in particular, I was interested in the data you had for 4 monthly, but even more so what you might be able to do for 6 monthly. So maybe just briefly, what did you present there? And then what does that say about what your longer-term plans might now look like?

Yes. So actually, James, at the CROI, we didn't present much on 4 monthly, but for both PrEP and treatment, 4 monthly very much on track. So the PrEP will read out this year and hopefully launch next year. Treatment is about a year, later than that, and we will start the pivotal bridging study later this year. What we really presented at CROI and what we're very excited about is our 6 monthly treatment options. And we presented PK data on our third-generation Integrase 184 which we've already shown has a very broad resistance profile against all much broader set of mutations than cabotegravir or dolutegravir, which has been very well received by the community and by the KEs. We showed PK data on that, that showed that we're very confident of going to a 6-month formulation. And similarly 499, our capsid inhibitor, which is very similar actually to lenacapavir, but with less drug-drug interactions. We showed PK data on that. which is very affirming to a 6-month formulation. So the next stage now is to test 6 monthly formulations of those in infected individuals. So I think -- and then the third piece of data that we showed from R&D was our neutralizing antibody N6LS. We showed 4-month data on that, but we've got data coming in 6 months. And again, that was very effective. So we've got some options of how we build a 6-month pipeline here. But I think we've got growing confidence that we're going to potentially have a best-in-class 6 monthly treatment and there's more work -- clinical work to do. We will do meet the management event at some point in the middle of this year and go into a lot more detail around this.

And why would you pursue one of the 6 monthly options versus the other? So my understanding is that a broadly neutralizing antibody, it wouldn't work for absolutely all strains of HIV and you still need to get the 6-month data, but you've got some 4-month data that looks encouraging. But the capsid, you've already got 6 months data, and it could work for everyone. So why not already just go forward with the capsid...

Yes, that's a very good question. And it's a question that we are still thinking through it. There's no doubt the capsid is going to be broader. And I think 184 plus 499 has the potential to be a very significant medicine. With the antibody, there's actually been quite a lot of science over the last year or so around the impact of antibodies on the latent reservoir in HIV even in patients that are virally suppressed. So there's work going on to look to see whether there are particular patient groups that, that might be important for. And I think -- and I know Andy Dickinson was here before Gilead, it's all about having options. It's a bit like we had Juluca and Dovato. There are a diverse group of patients and having different combinations that could be important for different groups.

I mean to that point, it's a big opportunity, and they both sound interesting. Could you just take them both forward?

We could.. So watch this space, and we'll update you later in the year.

And actually, just -- so we had Gilead on first, and there's been some talk about less frequent orals. So I don't believe you've announced a less frequent oral program, but you've got a third-generation integrase look very effective. Could that -- is it the sort of drug that could be made into a less frequent oral?

The [ PKN ] 184 is such that, that's probably not the optimal medicine to be in a more frequent oral, but we are certainly looking at possibilities in that. I think our main focus is very much 6 monthly, but we are open-minded on other things.

And what about the route of administration? Does that matter? Because some people have noticed your products at the moment are intramuscular, some competitors are going for subcu. But then if you're talking about something where you've only got to get it twice a year anyway, how important is whether it's IM, IV, subcu?

I think it's very important in PrEP. We haven't got on to PrEP, but -- there's no doubt [indiscernible], even though it's doing well, there are quite a lot of nodules issues from the subcu formulation. I think in treatment, our aim is very much to develop an IM formulation. We'll have to see. I think that's definitely possible for 499. We've got a bit more work to do with 184. But there is less pain, there's less nodules associated with IM in our view and all the research we've done. But I would say, I mean, the thing that's underestimated a little bit, the chemistry around these long-acting formulation, integrase chemistry itself is very complicated. I think part of the secret sauce of ViiV has been it integrase chemistry, both inside ViiV, but also with our great partner with Shionogi. And I think we've got real competitive advantage there.

And if Gilead is able to bring along a once-a-week PrEP as a pill next year, do you think that would be a big challenge for Apretude as a 2-month or a 4-month injection?

I think in the PrEP market, I mean, I agree with Gilead. I mean the PrEP market is growing strongly and having a second entrant in long-acting is absolutely helping that. I think having different options is always good. At this point, Apretude is continuing to grow very strongly along the lines of the last couple of quarters. I think if you -- if there is a once weekly, I'm not sure that's necessarily coming next year. I mean it will cannibalize the daily orals for sure. But we're focused on long-acting.

Great. Well, I'm looking forward to this HIV event and hearing more. And with that, I can say we're out of time. So thanks a lot for joining...

Thanks, James. Thanks, everyone, for coming.