GSK's Shingrix skyrockets toward the £1B mark as HIV drugs falter

GlaxoSmithKline GSK House in Brentford, UK
As demand continues to grow, GSK's shingles vaccine Shingrix is now well underway to surpass £1 billion sales in its second full year on the market. (GlaxoSmithKline)

GlaxoSmithKline’s shingles vaccine Shingrix is growing insanely fast. So fast, in fact, it's on track to surpass £1 billion in sales for its second full year on the market. But another pillar of the British drugmaker’s business—its HIV franchise—is suffering from new competition.

In what CEO Emma Walmsley called a “particularly strong performance in vaccines,” sales of Shingrix came in at £357 million ($467 million) in the first quarter, way up from £221 million in Q4. That performance beat analysts’ expectations by 43%, Jefferies reports. And GSK hit that figure even as demand continues to outstrip supply.

GSK recently added $100 million investment to its site in Montana to boost its adjuvant production for vaccines that could “deliver long-term and sustainable supply for key vaccines, including Shingrix,” U.S. president of pharmaceuticals Jack Bailey said in a statement.

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And there's plenty of growth ahead, Jefferies figures, citing 2022 sales estimates of £2.3 billion. That's well above consensus estimates, but the Jefferies team believes other firms “underestimate GSK’s ability to expand capacity via manufacturing efficiencies, debottlenecking critical production steps, and repurposing existing facilities,” according to a note issued to clients in December.

RELATED: Overwhelmed by Shingrix demand, GSK plots $100M vaccine manufacturing boost

But not every key franchise delivered so well for GSK this quarter. Its HIV business chipped in £1.12 billion in sales, a 4% increase year-over-year at constant currencies, but 1% short of analyst expectations.

That could change; GSK is counting on its new two-drug regimens to drive future growth. But for now, Tivicay (dolutegravir)-based therapies serve as the backbone of GSK’s HIV portfolio, and that set of drugs didn't do so well in the first quarter.

Tivicay’s U.S. sales actually dropped by 8% at constant currencies, even as other markets helped boost its total by 7% to £383 million. Triumeq, the three-drug Tivicay combo, saw U.S. sales decline 2%, and its global total also came in slightly below expectations. Meanwhile, Juluca (dolutegravir and rilpivirine), the first-ever two-drug HIV regimen, continues to languish, with lower-than-expected sales of £70 million, only £8 million more than its Q4 total.

David Redfern, chairman of GSK’s HIV-focused ViiV Healthcare, acknowledged Wednesday that the Tivicay franchise’s market share dropped slightly to 26.6%, while competitor Gilead Sciences has quickly captured 17.5% since its Biktarvy launch early last year.

In Europe, GSK’s overall HIV business declined 8% in the quarter, despite the Tivicay franchise’s volume growth of 8%, Redfern said during the first-quarter earnings call. He attributed that decline in part to government-mandated price cuts in France, Spain and Italy.

RELATED: GSK's Dovato chalks up first 2-drug regimen nod for new HIV patients, but will doctors use it?

“This was slightly slower growth than in previous quarters due to the significantly larger base of the overall business and the more competitive environment,” Redfern said of the overall HIV business.

Wolfe Research analyst Tim Anderson on the call noted consensus estimates for Triumeq and Tivicay are largely flat over the next five years, and Redfern conceded that HIV is a competitive market. But the GSK exec insisted its U.S. script numbers in HIV remained stable at around 32,000 to 33,000, despite some switching away from Triumeq.

But in a Wednesday note to clients, Anderson said the HIV business in the U.S. will likely “see a greater level of price competition given the increasing number of entrant products.” 

ViiV does have two-drug regimens, which Redfern said are where “the vast majority of the growth” will be coming from in the U.S.

Juluca has picked up the pace since new 96-week data debuted in October, Redfern said, adding that the drug's case was reinforced further from 148-week data. Around 65% of the Juluca business continues to come from combos that don't contain Tivicay's active ingredient, dolutegravir. The GSK exec sees that as “a good indicator of growing prescriber confidence in two-drug regimens,” which paves the way for its launch of Dovato, a two-drug combo the FDA recently approved for treatment-naïve patients.

Citing a physician survey, Jefferies’ Peter Welford predicted in December that “the decline of GSK’s dolutegravir-based 3-drug regimens will be largely offset by the rising use of dolutegravir 2-drug regimens, and that the number of patients treated with dolutegravir overall should remain relatively stable.” Anderson, in his note, argued that two-drug regimens and long-acting injectables—one of which ViiV has already filed for U.S. approval—“are singles and doubles, not home runs.”

RELATED: Mylan's 'aggressive' generic Advair discount isn't as big as it looks: analysts

Outside of vaccines and HIV, GSK tasted some early impact from Mylan’s newly-approved generic to its top-selling respiratory inhaler Advair. Thanks to Mylan’s copycat and GSK’s own authorized generic, which launched in February, Advair's U.S. sales tumbled 27% at constant currencies to £176 million. And sales might continue to slide, execs warned, given that the copycat launches are just getting started.

Under Walmsley, GSK has rekindled its interest in oncology via its $5.1 billion acquisition of Tesaro and a separate deal with Merck KGaA. The centerpiece of the Tesaro deal, PARP inhibitor Zejula, pulled in £56 million in the first quarter, with key data in first-line adjuvant ovarian cancer expected later this year. The drug could use a new indication; its market share in the second-line maintenance setting has dropped from around 70% last year to 46%, since AstraZeneca and Merck & Co.'s Lynparza expanded its territory. But “we’re looking to improve our competitive focus as we integrate our commercial operations,” GSK pharma chief Luke Miels said on the call.

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