Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
Remember the stock market is fickle. What we do know is there have been Getting ahead of Infectious Disease, HIV and Respiratory Disease with GSK management presentations with Oncology to come next year. Peak Year Sales for late stage assets have been stated as follows :
RSV. £3bn
Men ABCWY. £2bn
Gepotidacin, tebi & Brexafemme. £2bn
HBVASO. £2bn
Pneumococcal £4bn
Cabenuva/Prep. £2bn
Depemokimab. £3bn
Camlipixant. £2.5bn
Nucala COPD. £1bn
Assuming no change from two years ago for Jemperli and half the sales for Zejula and nothing for Blenrep (v conservative given Dream 7 last week)
Jemperli £2bn
Zejula. £1bn
Assume Ojjaara £1.5bn
Total PYS of £21-26bn across a number of assets. We also know the SP will go nowhere until Zantac litigation is resolved. If management can resolve Zantac next year and start to deliver on the pipeline the future is brighter than the current SP would suggest.
Article in Barrons this morning saying uptake for RSV vaccines is strong. Prescription data reviewed by Jeffries suggests Pfizer have a 35% market share and GSK 65% share. Three weeks ago Bloomberg estimated RSV sales would be $2bn in 2023, giving GSK sales this year of £1074m vs £219m included in consensus sales. An upside of £855m. It will be interesting to see what Luke Miels says about the potential for Arexvy at the Q3 results next week.
Interesting article from Bloomberg yesterday mentioning that GSK and Pfizer RSV vaccines will bring in $2 billion in sales this year. Assuming Arexvy takes 55% share that is a c£700 million sales upside to the £219 million currently pencilled in by the City.
Ojjaara (momelotinib) approved in the US as the first and only treatment indicated for myelofibrosis patients with anaemia. Luke Miels said with this broader label Ojjaara will be able to generate peak sales comfortably above blockbuster status.
Patients who are anemic at diagnosis make up about half of the first line population according to Miels. In the second line around 60% to 70% of patients are anemic.
Miels said the broad approval is a recognition there’s a very elegant mechanism of action at play.
Specifically JAK inhibition gives Ojjaara the ability to reduce the size of the spleen and address other symptoms for myelofibrosis patients. But an off target mechanism against activism A receptor 1 could explain the drug’s additional benefits in controlling anemia. That’s really important in the context of myelofibrosis because anemia status and transfusion requirements frequency are directly correlated with life expectancy” Miels noted.
Terrific news for patients and GLA
Only three months ago shareholders were capitulating with the SP at £10.62. Well done to all who held on to their holdings. This is a gem and owners are and will continue to be rewarded. The change in sentiment has been stunning
Up 40 % in a month FUM was less than 40p a month ago and momentum is accelerating with half the share price rise coming this week.
There is nothing like momentum when shareholders BEGIN to believe.
GSK defeated thousands of US lawsuits claiming that the heartburn drug Zantac caused cancer, as a judge found the claims were not backed by sound science. The ruling by US district judge Robin Rosenberg knocks out 50,000 claims in federal court. A spokesperson for GSK said the company welcomed the decision.
SSE Renewables profits in the six months to September fell from £25.4m to £22.5m a reduction of 11.4%, with “wind volume lower than expected…” pulled out again. Renewables made up 3% of the Group’s Operating Profit of £716m. It would be interesting for shareholders to have visibility of SSE’s Renewables Return On Invested Capital (ROIC). It would be great for the CEO to be honest with investors on the investment returns on each part of the business.
Despite beating consensus earnings forecasts by 17% yesterday SP was unmoved yesterday. No doubt GSK in unloved by the market at the moment. Until there is some clarity regarding Zantac litigation this situation will not change.
Liberum raises price target to £1.21 from £1.09 and keeps buy rating. Let hope we start to see excellent trial results translate into a higher SP.
As GSK’s SP continues to drop (now at £58bn) even with a takeover premium of of 30-40% there are a number of US Pharma co’s who could be afford the £75-80bn price tag. However GSK’s poison pill Zantac strategy may deter any would be suitors? There would likely be a host of weary long term investors who would jump at a good cash bid offer.
Perhaps part of the reason is that the US govt has passed legislation allowing Medicare to negotiate prices with drug manufacturers. As the US market is the most lucrative the stock market is worried it will ultimately adversely impacted companies such as GSK in future in its most important market.
We’ve seen a 25% increase in the SP in a week. It would appear somebody is buying…
Coincidence - a remarkable concurrence of events or circumstances without apparent causal connection.
1. GSK press release stating generic manufacturers will have the opportunity to develop manufacture and supply generic versions of cabotegravir LA for PrEP the first long acting HIV prevention medicine in 90 countries. This announcement comes just seven months after the first regulatory approval of cabotegravir LA for PrEP by the US FDA.
2. Reuter article stating cheap copies of GSK’s HIV prevention drug could be ready in 2026.
3. GSK share price dives in a rising market.
Equally important is who wants to sell. Stunning clinical results for Dostarlimab, strong phase III data for GSK’s RSV vaccine and robust performance from the GSK/Sanofi covid vaccine have put a spring in the step of the GSK share price. With the prospect of a successful demerger of Haleon and prospect of pipeline delivery the SP has held up well as the FTSE has fallen.
In my view short sellers are reading across from US retailers such as Target and betting 3i’s largest investment will struggle due to the oil/gas price shock/inflation and higher interest rates. They think consumers will tighten their belts and it will adversely impact European retailers.
Mr Putin’s decision to invade Ukraine has transformed the economics of renewable electricity producers in UK/EU with the SSE share price rising from £16.75 on Feb 24 to £19.25 on May 23. A report in the FT today of a widening of the windfall tax net by Mr Johnson’s government see the SSE share price plummet £1.75 in no time to £17.50.
Yesterday at this time 8.45am 3i had plummeted £0.84 to £10.73 and recouped most of its losses to close down £0.16. A day later it’s up £0.37 at £11.76. These price movements are nothing to do with the underlying value of the business. Short sellers are hoping long term holders will capitulate. GLA.
Good article in FT today highlighting the progress GSK and Google via their tie up Galvani Bioelectronics is making with the first patient receiving an implant to control rheumatoid arthritis.