GSK to buy asthma drug developer for up to $1.4 billion in pipeline push

By Louis Goss

GSK on Tuesday said it had struck a deal to acquire asthma drug developer Aiolos Bio for up to $1.4 billion, as the British pharmaceutical giant pushes forward with plans to bolster its development pipeline by snapping up autoimmune and respiratory focused biotech companies.

The British pharmaceutical giant said it would pay $1 billion upfront and up to $400 million in milestone payments if specific aims are achieved, in a deal that gives it access to Aiolos' Phase II ready AIO-001 asthma treatment.

Shares in GSK (UK:GSK) increased 1% on Tuesday having risen 10% over the previous 12 months.

Founded in October 2023, Aiolos Bio acquired the rights to develop its AIO-001 molecule from Chinese drug developer Jiangsu Pharmaceutical Co in August 2023, after raising $245 million in investment from venture capital firms including Bain Capital Life Sciences.

Aiolos' deal with Jiangsu gives the San Francisco biotech the rights to develop and commercialize AIO-001 in all areas worldwide outside of Greater China.

Aiolos' AIO-001 molecule is a lab-modified monoclonal antibody that works by binding to the TSLP proteins in the human body that trigger the immune responses that cause asthma. The drug is dosed just once every six months and has shown itself to be safe in early-stage trials.

GSK's acquisition comes as the British firm seeks to boost its pipeline, in its bid to keep up with rivals amid a flurry of deals in the pharmaceutical sector that has seen top drugmakers seek to cash in on fast-paced developments in medical sciences by snapping up innovative biotechs.

Major deals include Bristol Myers Squibb's (BMY) $14 billion acquisition of schizophrenia drugmaker Karuna Therapeutics in December and AbbVie's (ABBV) $10 billion acquisition of ImmunoGen the same month.

The Wall Street Journal reported Novartis (NVS) is in advanced talks to buy Cytokinetics (CYTK), which has a market cap of over $9 billion.

In December 2023, GSK chief commercial officer Luke Miels told the Sunday Times the British drugmaker was planning to spend around $2 billion to boost its pipeline by buying biotech companies working on respiratory and auto-immune treatments.

Investors have previously raised concerns that GSK lacks a sufficient pipeline to meet its current revenue targets, through which it is aiming to generate sales worth GBP33 billion a year by 2031, amid the upcoming expiry of various patents on its lucrative HIV drug Dolutegravir.

In 2021, Elliott Management called on GSK to invest more of its resources in R&D, as the U.S. investment fund argued poor management of the British pharmaceutical company has seen it "underperform for years."

GSK generated GBP2.6 billion ($3.3 billion) in revenues from selling immuno-inflammation and respiratory drugs in 2022, including GBP1.4 billion worth of sales of its asthma drug Nucala, according to its most recent full-year results.

In June 2023, GSK acquired chronic cough treatment maker Bellus Health for $2 billion. In October 2023, the company also struck a deal with Chongqing Zhifei Biological Products to market its shingles vaccine, Shingrex, in China.

-Louis Goss

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01-09-24 0519ET

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