The threat of new competition and potential loss of market share in GlaxoSmithKline’s flagship HIV drug business unnerved investors in Britain’s biggest drugmaker, on Wednesday, sending the shares 1.5 percent lower in early trade.
GSK was the biggest loser in London’s FTSE-100 index after Citigroup downgraded the stock to neutral from buy and cut earnings forecasts by up to 9 percent.
HIV medicines, which GSK sells through its ViiV Healthcare unit, have been star performers in its pharma business in recent years and GSK plans to defend its patch with a new two-drug treatment regimen for controlling the virus behind AIDS.
But arch-rival Gilead Sciences is developing a rival three-in-one daily pill and Merck & Co also has a novel medicine that could challenge both.
Citi analyst Andrew Baum said Merck could in fact end up beating both GSK and Gilead with its new drug EFdA, which may reach the market as early as 2021 and has the potential to be developed as both a daily pill and a twice-yearly injection.
Given the early nature of Merck’s experimental product, Citi currently forecasts heavily risk-adjusted peak annual sales of US$150 million for EFdA but it believes commercial success could add more than US$5 billion to forecasts.
GSK’s HIV drug dolutegravir, which is used in the medicines Tivicay and Triumeq, has been the mainstay of the British group’s HIV operation and investors are nervous about any threat to what is a highly profitable business.
Antiretroviral therapy has turned HIV from a death sentence into a manageable condition but patients need to stay on treatment for life, so there is a growing focus on making medication as convenient and well-tolerated as possible. (ChannelsNewsAsia)