GSK to Buy Bellus Health and Its Chronic Cough Drug for $2B

GSK has decided to pay $2 billion in cash to acquire Canadian-based medicine developer Bellus Health Inc as the British company boosts its bet on respiratory medications.

The decision to restock its pipeline comes as GSK investors wonder if there will be enough medication to keep the momentum going into the next decade, given the projected loss of patent protection for one of its major chemicals. The investigational medicine Camlipixant, which is in late-stage research for refractory chronic cough (RCC), is at the core of the transaction, which was disclosed by both businesses recently.

Patients with the illness may cough up to 900 times each day. It affects around 10 million individuals worldwide for more than a year. There are currently no licensed medicines in the United States or Europe. GSK’s offer of $14.75 per share is more than quadruple Bellus’ Nasdaq closing price of $7.26. GSK’s existing respiratory portfolio, which includes Nucala and Trelegy, produced more than 3 billion pounds ($3.73 billion) in revenue last year.

GSK will obtain a medication that might compete with a comparable therapy being developed by Merck & Co. as a result of the Bellus agreement. Both medications are intended to function by targeting a receptor known as P2X3, and they have the potential to be the first treatments for a refractory persistent cough.

Nonetheless, both have encountered roadblocks in their progress. Merck’s Gefapixant medication was denied by the FDA in January 2022 due to concerns about how the treatment’s efficacy was determined. In February 2023, the pharmaceutical firm stated that it would soon submit data in response to the FDA’s queries. Meanwhile, Bellus’ medication already fell short of its target in a Phase 2 study in July 2020. Nearly 18 months later, the business rebounded with excellent findings from another mid-stage study, which laid the groundwork for the ongoing Phase 3 program.

GSK CCO Luke Miels believes that Camlipixant has the potential to be one of the best treatment solutions for patients with excellent sales forecasts. This proposed acquisition is an added advantage in the portfolio of the company’s specialty medicines.

A refractory persistent cough can considerably influence people’s lives, including depression, urine incontinence, discomfort, rib fractures, and sleep deprivation. People with the illness might cough hundreds of times every day for weeks on end. GSK anticipates Camlipixant to receive regulatory clearance by 2026. Beginning in 2027, the transaction may increase the company’s earnings per share. Bellus presently has around $337 million in cash and investments, which GSK will acquire as part of the transaction.

The takeover is the latest in a run of transactions for GSK that began last year. In May 2022, the British pharmaceutical paid $1.9 billion for vaccine developer Affinivax, and $2.1 billion for cancer drugmaker Sierra Oncology one month earlier.

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