Glaxo ups stake in Theravance on drug success

City A.M. Reporter
GLAXOSMITHKLINE bet another $212.9m (£133m) on the success of lung drug Relovair yesterday by raising its stake in US biotech firm Theravance – its partner on the new medicine – to 26.8 per cent.

Britain’s biggest drugmaker has been working with Theravance for 10 years to develop Relovair, an inhaled therapy combining two ingredients, which is a potential successor to GSK’s $8bn-a-year top-seller Advair.

Relovair will be submitted to regulators for approval as a treatment for chronic obstructive pulmonary disease in mid-2012.

The new drug has had mixed results in clinical trials, showing superiority to Advair in some tests but not others.

Still, GSK remains confident and hopes the convenience of once-daily dosing will appeal to patients, helping Relovair carve out good sales as a replacement for twice-daily Advair.

Current consensus forecasts point to annual Relovair sales of $1.46bn by 2016, according to Thomson Reuters Pharma.

The success of Relovair is critical to GSK’s future business in lung disease as Advair is set to lose patent protection in key markets, although it is not certain it will face immediate generic competition as respiratory drugs are difficult to copy. GSK, which previously had an 18.3 per cent holding in its US partner, said it was paying $21.2887 per share for 10m Theravance shares, a 7.5 per cent premium to the five-day average price up to 30 March.

GSK also said yesterday that a new once-daily AIDS drug developed with its partner Shionogi has proved just as good as Merck’s twice-daily rival Isentress in a late-stage clinical trial, boosting hopes for the product.

Merck’s drug, which had sales of $1.4bn last year, is currently the only integrase inhibitor approved by regulators.

The new drug is important for GSK since it could help rejuvenate its HIV/AIDS business – an area of medicine it used to dominate but where it has fallen behind in recent years.