Yesterday was not a good day for GlaxoSmithKline or for Theravance. GSK has been running a large trial of the respiratory drug Breo (developed with Theravance) in over 16,000 patients, looking for something that no drug in that category has been able to demonstrate: a survival benefit in chronic obstructive pulmonary disease. COPD patients need that, and GSK needed it, too, because their big franchise in this area (Advair) is nearing the end of its product cycle for them.
Breo is a combination of a steroid (fluticasone furoate) and a long-acting beta-2 agonist (vilanterol). That latter part is where Theravance came in; they have several programs working on such agents. The combination has been approved for asthma, and was approved in 2013 for COPD. (Advair, by the way, is just fluticasone by itself, as the propionate). Success in this trial would have been a real advance, but it’s a tough field, and the results showed that Breo missed its primary survival endpoint. Here’s an excellent roundup from Evaluate Pharma:
If a company designs a 16,000-patient trial, skewed massively in its favour, with a new version of a drug whose predecessor only narrowly missed, chances are it thinks a positive result is a dead cert and wants the market to think so too.
This is just one reason why yesterday’s failure of Summit, a massive survival study of the COPD drug Breo , is such a setback for GlaxoSmithKline . Add into the mix that Glaxo ’s bold claim to turn around its respiratory division now lies in tatters, and the future of the UK group’s embattled chief executive, Sir Andrew Witty, looks even less secure than before.
After all, it was Sir Andrew who has maintained Glaxo ’s focus on respiratory drugs, a division that, based partly on Summit, was to have returned to growth next year. Meanwhile, bets on Glaxo’s safe but unexciting vaccines and consumer health businesses – while ditching established oncology drugs and eschewing M&A – are, in the current market, puzzling.
Indeed. Just last month we were speculating around here about GSK’s whole strategy, and this is just going to make all that talk even louder. The company basically pulled out of oncology last year, a particularly strange move given all the advances in recent years, and put more focus on lower-margin businesses that seemed safer. They’ve been defending that move has just facing reality, getting there before the rest of the industry realizes that it has to follow them, etc., but those are long-term reasons. And the current management team may not, it would seem, have a long term to work with. Part of the strategy was that the drug areas that the company stayed in would be successful – and if they aren’t?
Lost in those concerns is what’s happening at Theravance. The company’s stock was trading a $40 a share a year and a half ago, and is now below $12. If this is bad news for GSK (and it surely is), it’s terrible news for Theravance.