Pharmaprojects R&D Pipeline News Feed
GlaxoSmithKline and Pfizer join forces for HIV research
13 May 2009
The HIV research field is preparing for some significant shifts in the landscape in upcoming years. Treatment options for HIV infection and AIDS have changed dramatically since the initial identification of AIDS and the causal HIV, in 1980 and 1984, respectively. In the intervening years, 30 antiviral drugs and antiviral drug combinations have been launched on the market. This is the result of rapid and productive R&D, generating an astonishing number of drugs in a comparatively short timeframe. As a result, the outlook for sufferers has changed completely. From an illness that progressed in the vast majority of cases from initial infection to full-blown AIDS presentation and death over a short timeframe, HIV infection has now become a controllable, chronic viral infection for many patients. The majority of treated carriers can now expect to live a far longer lifespan, with a variety of options for drug therapy combinations available.
Despite the number of successful drug launches, there is still a huge demand for new therapeutics. Existing drugs are not without drawbacks, with severe side-effects in many patients, as well as the issue of viral resistance development. A number of the significant drugs on the market are now facing patent expiry, placing further pressure on the pharma industry. This means the phenomenal pace of R&D must be maintained, to develop more antiviral drugs with novel mechanisms of action. There is also the issue of the achieving the ultimate goal - developing a successful prophylactic vaccine. This has so far proved elusive, despite major financial investments. Continuing to launch novel antivirals in a marketplace filled with successful drugs and generics is a very different proposition than before. At the beginning of HIV/AIDS research, there were many development opportunities available, with all the potential targets up for grabs. A huge drive in funding research in the face of such a calamitous illness, which rapidly became a pandemic, meant there was no shortage of academic and charitable research organisations paving the way in research. These bodies could investigate the disease mechanisms and potential novel targets alongside pharmaceutical companies, offering the best options up to the industry to invest the necessary funds to get through clinical development and out on to the market. This wide-open field was very different to the one we see now, less than 3 decades on.
GlaxoSmithKline (GSK) initially discovered and developed the first anti-HIV drug approved for use, the reverse transcriptase inhibitor azidothymidine (AZT). It was made available in 1987 and went off-patent in 2005. Since then, GSK held onto the top spot in the HIV market, dominating sales. In 2006, GSK had 30% of the total antiretroviral sales market, compared to 33% the year before. A dramatic change came about in 2007 with the rise of Gilead, however, which had previously been snapping at GSK's heels in the HIV field. Gilead suddenly surpassed GSK to seize the title of world leader in the HIV market. It did so with 4 marketed anti-HIV products; one of which, Truvada, has become the world's best selling HIV therapy. The 2009 HIV market share currently stands as 18% for GSK and 31% for Gilead.
Following its toppling from pole position, in 2008 GSK's HIV drug sales were GB£1.5 billion (6% of its total revenue), providing GB£300 million profit. This revenue was down by 5% from the previous year, and Matrix Corporate Capital predict further decreases in revenue in future for GSK, to GB£1.2billion in 2012 and GB£1.04billion in 2013. Perhaps of greatest interest is that this decrease will start before some major patent expirations expected in 2017, which will only serve to further reduce revenues with generic erosion. In comparison, Gilead saw US$4.67 billion in antiviral revenues in 2008, up on the previous year by 36%. These figures were impacted significantly by sales of Truvada and Atripla.
This decline in fortunes for GSK is in contrast to the expanding HIV market, which was worth US$9.3billion in the 7 leading commercial markets and is predicted to be worth US$15.1billion in 2017. Competition is also only growing stronger as more companies muscle in. Tibotec, a Johnson & Johnson (J&J) subsidiary, is making its presence felt and is predicted to take increasing shares in the HIV market in the next 10 years. It launched Prezista in 2006, Intelence (with another J&J subsidiary, Janssen) in early 2008, and has more waiting in the wings, such as rilpivirine, which is expected to see a registration filing either this year or next. Pfizer has also made an impact on the HIV market, with the approval of Selzentry in 2007 in the US. It is launched in the UK and approved in the EU, and interestingly Pfizer has gone for EU and US filings in further HIV areas such as treatment-naive patients, potentially opening the market up even more. Bristol-Myers Squibb is also present with Reyataz, which has had impressive sales in the US protease inhibitor segment, and looks likely to repeat this in the EU when it is approved. Reyataz has also moved into expanding indication approvals, such as previously-untreated patients, challenging the position of standard first- and second-line therapies normally prescribed. Merck & Co has entered the fray with Isentress, which, being in the integrase inihibtor category, takes a different pharmacological approach, and looks as though it may well take an increasing portion of total HIV sales in future. So far it is targeting the treatment-experienced patient segment, but a US sNDA filing has been accepted for treatment-naive patients, and action on this is expected in mid-2009.
In the face of this new HIV market environment, GSK and Pfizer recently announced an unusual approach to the future of their HIV therapy research. The two companies intend to create a joint-venture, combining their HIV research efforts. The company, as yet unnamed, will be headquartered in London, the UK, while R&D will remain in each company's existing facilities. Company ownership will be split so GSK hold an 85% stake and the head of the company will be Dominique Limet, the former head of GSK's French operations. Speculation regarding the outcome of this venture includes questions regarding whether this is an attempt to set up an independent-style biotech subsidiary, perhaps modelling the success of Genentech for Roche, where Roche kept a 'hands off' approach while Genentech produced excellent results and profits. However, with the recent acquisition of Genentech by Roche, is this a wise choice of model after all?
Of most interest regarding the GSK/Pfizer arrangement is the planned profit split; the companies have agreed to an incentive model which rewards the maker of each new medicine that reaches the market with greater ownership, rather than splitting the profits equally. This goes some way to explaining why the companies are keeping their R&D sites at separate locations, rather than pooling them to save costs, but it also raises the question - will this arrangement foster collaboration or competition between the GSK and Pfizer research groups? Collaboration brings the advantage of two-heads being better than one, however competition could stimulate far greater drive within each department to outdo the other in a race to the market.
Interestingly, at present GSK and Pfizer are primarily regarded as fierce competitors, with few licensing agreements existing to demonstrate a strong collaborative spirit exists. Currently, Pfizer has a licensing agreement with GSK for one active development product, VaxImmune, a Phase III drug. This forms part of two licence agreements with GSK for the use of certain TLR9 agonists in preventive and therapeutic infectious disease and cancer vaccines. GSK also holds three licensing agreements for commercialisation of launched Pfizer drugs in certain territories. However, whether or not the joint venture becomes more competitive or collaborative in nature, both companies must be expecting to see significant benefits. Either path will generate huge motivation for both parties to focus on innovative R&D, the lifeblood of the future pharmaceuticals market. The joint venture is expected to open its doors in the final quarter of this year, and time will tell how it will affect the products, profits and market positions for either company.
At present, the reasons given by GSK for initiating this unusual agreement with a competitor include a projected cost saving of GB£60 million/year, primarily in headcount, expected to be seen from 2010. Pfizer, meanwhile, expects to see significant benefits by gaining greater access to a market it traditionally has had a comparatively small share in. With a recent drive to also cut costs, and refocus its R&D and its business structure, Pfizer stands to gain a greater foothold in the HIV arena while testing a potentially valuable model for future R&D initiatives. With its market position set to worsen with the impact of generic erosion, GSK has entered this unusual agreement to kill two birds with one stone and cut costs while driving innovation forward. This is clearly a bold move with a novel business model, to find out if GSK can regain its crown as king of the HIV market.
