Dolutegravir Sodium/Lamivudine

GSK has unveiled an ambitious three-year plan to divert resources to its late-stage R&D programs and shift its research headquarters—but CEO Luke Miels is being tight-lipped about the extent of any job losses. The strategy will aim to generate annual savings of 1.9 billion pounds ($2.5 billion) by 2029, set against a one-time cost of 2.4 billion pounds ($3.2 billion). About 45% of the required savings will come from “better procurement,” Miels told journalists on a second-quarter earnings call this morning. This would focus on “areas that are not on the frontline of our labs,” such as “all sorts of systems and consultants and various other partners [and] support functions.” Another 40% of the savings will come from the “evolving portfolio,” namely “reallocating resources from our mature portfolio of mature products to specialty, novel products.” However, Miels wasn’t willing to put a figure on the number of job losses that this restructuring could entail. “We're not going to give a number today in terms of people changes, and that's because I want the chance, and I want my team to have the chance, to discuss this with our people first,” the CEO said on the call. “I think the key theme, as I've said, is it's about reallocation into new medicines,” he added. “But we will update you in time once we've implemented those plans.” GSK put the strategy in the context of the looming patent expiry for its dolutegravir range of HIV meds, which begins in 2028. Those treatments, which include Dovato and Tivicay, brought in a combined total of 1.4 billion pounds ($1.9 billion) in the second quarter. Most of the savings will be reinvested into the late-stage pipeline, Miels explained. This includes antibody-drug conjugates like the Hansoh Pharmaceutical-partnered ris-rez—which scored a phase 3 win today —as well as the ALK inhibitor neladalkib for colon cancer and the FGF21 analog efimosfermin alfa for fatty liver disease. Part of the savings will also be used to move GSK’s research headquarters from the English town of Stevenage, about 30 miles away, to Cambridge. As well as being an academic center and one point of England’s life sciences “golden triangle,” Cambridge is already home to the other U.K.-based Big Pharma, AstraZeneca. In fact, GSK’s new R&D site will be built on the Cambridge Biomedical Campus, which already houses AstraZeneca’s Discovery Center. “This is a 400-million-pound investment—on top of the 1.5 [billion] we spend each year in the U.K.—to further integrate GSK into Cambridge's world-class ecosystem of biomedical research, patient care and academia,” Miels said on the call. GSK’s headquarters in London will be unaffected by the move, the company pointed out, although Chief Scientific Officer Tony Wood will be based at the Cambridge site. Miels told journalists that moving R&D “up the road” to Cambridge was an example of the company “putting our money where our mouth is” and proving its commitment to the U.K. life sciences industry. The CEO, who stepped up to the top job at the start of the year, has already made his mark on GSK with an M&A strategy focused of trying to outdo established blockbusters. This approach has encompassed the $2.2 billion buyout of Rapt Therapeutics for a food allergy reaction drug that targets the same epitope as Novartis and Roche’s Xolair, as well as paying $950 million cash for Canadian biotech 35Pharma and its potential rival to Merck & Co.’s pulmonary hypertension mainstay Winrevair. Miels said on this morning’s call that he and his team have undertaken a “full portfolio review” over the last six months “looking really across the board for opportunities to accelerate and broaden our development.” “This review involving the team identified opportunities to accelerate development across 18 indications and 25 studies for seven key assets in oncology, respiratory, hepatology and vaccines,” he explained. One drug that was recently scrapped was camlipixant. Once hailed as a potential blockbuster, GSK ended development in chronic cough earlier this month due to a mixed phase 3 readout. GSK revealed this morning that the decision came with a 1.3 billion pound ($1.7 billion) financial hit for the company, which it blamed for a 75% drop in operating profits for the quarter.

About half a year into his tenure as GSK’s CEO, Luke Miels is launching a three-year restructuring to navigate the British pharma through upcoming patent cliffs and achieve over 40 billion pounds sterling in annual sales by 2031. The three-year initiative is designed to generate 1.9 billion pound sterling ($2.5 billion) in annual cost savings by 2029, against 2.4 billion pound sterling in total one-time costs. The cost reductions will mainly be pulled from three levers, CEO Luke Miels explained during a media briefing Tuesday. About 45% of the savings will target simpler processes and better procurement across different systems, consultation services and other partners support functions, the CEO said. Another 40% of the major restructuring is focused on “reallocating resources from our mature portfolio of our mature products to our specialty, novel products,” the CEO said, pointing to how a product targeting general practitioners requires a large commercial field force. The remaining 15% of the cuts will fall on the supply chain. The chief executive declined to provide the number of jobs being affected because “I want my team to have the chance to discuss this with our people first.” The program is the result of an enterprise-wide review of GSK’s cost base looking for ways to improve operations, GSK’s CFO, Julie Brown, said on Tuesday’s media call. Brown highlighted AI as a tool that GSK is leveraging to streamline processes across the organization and speed up operations. A small amount of the savings will go to improving operating margins to offset the impact from the upcoming loss of exclusivity for blockbuster HIV drug dolutegravir—used in such drugs as Tivicay, Triumeq and Dovato—between 2028 to 2030. Nevertheless, Miels stressed that the overhaul is about “reinvesting these savings into the late-stage pipeline, so that we can set the company up for success for the next decade.” The British pharma on Tuesday also unveiled a plan to initiate 20 phase 3 clinical trials by the end of 2026, doubling the number that the company committed to earlier this year. Following a full portfolio review, GSK has identified opportunities to accelerated development across 18 indications and 25 studies for seven key assets in oncology, respiratory, hematology and vaccines, according to Miels. GSK unveiled the big savings program alongside 8.4 billion pound sterling ($11.1 billion) in sales for the second quarter, up 5% year over year and 2% ahead of analysts’ expectations. Revenues from specialty medicines of 3.8 billion pounds and vaccines of 2.3 billion pounds beat consensus by 3% and 9%, respectively, according to Jefferies. As a result of the strong performance, GSK now expects its top line to land at the top end of the 3%-to-5% range at the constant exchange rate. The company also dialed up its estimates for the vaccines department, now expecting sales there to be broadly stable and increase by a low single-digit percentage, versus previous expectations for a decline to broadly stable performance.