Back in 2017, GlaxoSmithKline initiated a strategic review of its cephalosporins antibiotics business shortly after Emma Walmsley took over as CEO. Though the British drugmaker didn’t go through with a selloff, that option is now back on the table.
GSK has tapped financial advisers to potentially offload its cephalosporin portfolio, which includes Zinnat and Fortum, Bloomberg reported, citing people familiar with the matter.
The company has started shopping the brands around among other antibiotic producers and venture funds, according to Bloomberg. With about $200 million in annual revenue, the drugs could fetch a couple hundred million dollars, the unnamed people told the news service.
It’s not the end of the antibiotic road for GSK even if it eventually decides to let go of those cephalosporin brands. The U.K. pharma’s keeping other antibiotic assets, including popular Augmentin as well as gepotidacin, an experimental drug belonging to the new triazaacenaphthylene bacterial topoisomerase inhibitor class that GSK recently pushed into phase 3 testing for urinary tract infections and gonorrhea.
In a blog post published alongside the clinical development announcement in October, GSK said it was “committed to continuing our research in this area,” referring to its 70-year experience in antibiotics.
GSK tried to sell those older brands two years ago but failed. This time, a potential divestiture could fit into Walmsley’s overhaul plan.
The company recently combined its consumer health franchise with Pfizer’s, with a plan to spin it off into a standalone company in about two years. The goal is for the new GSK to focus on innovative medicines and vaccines.
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Last month, it officially launched a two-year initiative in preparation for that split while reviewing its £445 million-a-year prescription dermatology business. To aid the project, the company has agreed to sell 15 noncore over-the-counter products to Germany’s Stada.
Oncology has reemerged as a focus for GSK, as evident in its $5.1 billion Tesaro buy. The deal gave GSK PARP inhibitor Zejula and about doubled its clinical cancer pipeline.
Compared with cancer drugs, antibiotics represent a much less lucrative market, where drugmakers large and small find it difficult to turn their meds into major revenue earners. To avoid potential development of resistance, new antibiotics are often pushed to later lines of use, which limits their sales potential.
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Consider Melinta Therapeutics, which calls itself “the largest pure-play antibiotics company.” It has just filed for bankruptcy—and is now also waiting for potential buyers by court permission—not long after buying The Medicines Company’s infectious disease business, which included antibiotics Orbactiv, Minocin and Vabomere.
Also in the antibiotics bankruptcy club are California biotech Aradigm—which was developing an inhaled ciprofloxacin drug—and Zemdri developer Achaogen.
But some Big Pharma companies are still pressing ahead. In addition to GSK and its gepotidacin, Merck & Co. last year won an FDA nod for Recarbrio, a three-drug combo med indicated for urinary tract and intra-abdominal infections. Johnson & Johnson also has a collaboration worth a potential $818 million with Locus Biosciences, which won FierceBiotech’s 2019 Fierce 15 for its CRISPR- and bacteriophage-based technology.