GlaxoSmithKline’s $5.1 billion acquisition of Tesaro marked the company’s great pivot to oncology as championed by CEO Emma Walmsley. But just as the British pharma works hard to reap the deal’s financial benefits, its rival is taking a stab at its gains in court.
AstraZeneca has filed a suit against GSK in the U.K., demanding a bigger share of sales from the Tesaro cancer med Zejula, The Times reports. If AZ succeeds, the lawsuit could potentially net the company hundreds of millions of pounds, the newspaper reported, citing a source.
Tesaro developed Zejula, a PARP inhibitor, with help from technology licensed from AZ, which sells the rival drug Lynparza. In its suit, AZ accuses GSK of breaching the original Tesaro licensing agreement, which GSK denies, according to the newspaper.
As the first-to-market PARP drug, AZ’s Merck-partnered Lynparza is the clear leader in the field. The drug generated $543 million for AZ in the first quarter of 2021, compared with about $124 million for GSK's Tesaro.
Last year, Lynparza scored an FDA nod to be used alongside Roche’s Avastin for ovarian cancer patients who’ve responded to one round of chemo regardless of their tumor's BRCA mutation status. It followed a similar nod by Zejula in the same first-line maintenance setting. But in a win for GSK, Zejula’s label covers a large subtype of the disease that Lynparza doesn’t have—tumors without homologous recombination deficiencies (HRD), which constitute about half of all ovarian cancer cases.
Thanks to that broader label, Zejula is currently splitting new patient starts in ovarian cancer roughly 50-50 with Lynparza. Most of its gains are from the HRD-negative group, and it’s been struggling to eat into Lynparza’s HRD-positive share.
The Tesaro buy and the addition of Zejula is a critical component of Walmsley’s new direction for GSK, which involves a refocus in oncology and a planned spinoff of the consumer health franchise.
But Walmsley has been under increased pressure these days as GSK’s R&D efforts have hit setbacks and as marketed cancer drugs—led by Zejula—have yet to taken off. Besides Zejula, GSK recently launched anti-BCMA multiple myeloma drug Blenrep and PD-1 inhibitor Jemperli, both of which face tough competition from oncology juggernauts ahead.
For GSK, the Zejula legal battle comes just after activist investment firm Elliott Management took a stake in the drugmaker. The move sparked speculation that the fund might push for a shakeup at the company. During private conversations with other shareholders, Elliott has reportedly asked whether Walmsley is the best fit to lead GSK after the consumer health spinoff.