GSK vaccine for older adults granted FDA priority review

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GSK opened 2% higher in U.S. trading Wednesday but closed down 2%. Shares rose after the drugmaker reported financial results that beat Wall Street forecasts and announced the Food and Drug Administration had accepted a biologics license application and granted priority review to its vaccine for respiratory syncytial virus (RSV) targeted at adults aged 60 years or older.

The vaccine review marks third major regulatory milestone for the vaccine candidate following acceptance of regulatory submissions in Europe and Japan.

RSV is a common contagious virus affecting the lungs and breathing passages. It is one of the major remaining infectious diseases for which there is currently no vaccine or specific treatment available for adults. 

Older adults are at high risk for severe disease due to age-related decline in immunity and underlying conditions. RSV can exacerbate conditions, including chronic obstructive pulmonary disease (COPD), asthma and chronic heart failure and can lead to severe outcomes, such as pneumonia, hospitalization, and death. 

RSV causes over 420,000 hospitalizations each year and 29,000 deaths in adults in industrialized countries. Adults with underlying conditions are more likely to seek medical advice and have higher hospitalisation rates than adults without these conditions.

Box and vials of the drug Shingrix, made by GlaxoSmithKline Pharmaceutical, sit on a counter at a pharmacy in Provo, Utah, Jan. 9, 2020. (Reuters/George Frey/File Photo / Reuters Photos)

"Vaccines have stolen the show in GSK’s third quarter update today as the shingles vaccine, Shingrix, saw record sales. The continued roll-out is a key driver of the upgraded guidance for 2022, as are launches for the RSV vaccine," said Derren Nathan, Head of Equity Research at Hargreaves Lansdown.

Nathan noted GSK's RSV vaccine could reach $4 billion in annual says, but will be going head-to-head with Pfizer and Johnson & Johnson to be first on the market.

After giving GSK's RSV vaccine priority status, the FDA’s final decision on the vaccine is now expected by 2 May 2023.

Strong third quarter

GSK raised its 2022 forecast for the second time this year, after third-quarter earnings and sales topped estimates, continuing its strong start as a standalone prescription medicine and vaccine business since carving out its consumer health division. 

After years of underperformance relative to its peers and missing out on the lucrative market for the first set of COVID-19 vaccines, GSK has delivered a string of strong results.

The third-quarter saw GSK’s revenue grow by 9%, to 7.8 billion pounds ($9 billion). Specialty Medicines lead revenue growth, rising 24%, with Vaccines and General Medicines up 5% and 1% respectively. 

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Despite all this positive news for GSK, Nathan told Fox Business that investors have been weary to celebrate due to GSK’s ongoing lawsuits relating to the discontinued heartburn drug Zantac.

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Zantac heartburn pills are seen in this picture illustration taken October 1, 2019.  | Reuters Photos

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Thousands of lawsuits have been filed in the United States against a raft of drugmakers over allegations the heartburn drug contains a probable carcinogen.

GSK said it had incurred a charge of 45 million pounds in the third quarter, primarily reflecting provisions for increased legal fees related to Zantac.

Originally marketed by a forerunner of GSK, Zantac has been sold by companies including Pfizer, Boehringer Ingelheim and Sanofi, as well as a handful of generic drugmakers.

Shareholders fear a worst-case scenario where costs run into billions of dollars, as happened in cases involving Merck & Co's painkiller Vioxx and Bayer's glyphosate-based weedkiller.

Additional reporting from Reuters.