GSK bets on cough drug with $2bn deal for Canadian biotech

GSK has agreed to buy Canadian biotech Bellus Health in a $2bn deal, its largest acquisition since the UK drugmaker spun off its consumer health division last year.

The deal is designed to bolster GSK’s drug pipeline by adding Bellus Health’s speciality medicine for a debilitating and persistent cough, a condition that GSK says affects 10mn people.

It is the latest in a series of deals from GSK to replenish its drug pipeline ahead of the expected loss of exclusivity on its HIV drug dolutegravir towards the end of the decade. The purchase of Bellus follows the $1.9bn acquisition of Sierra Oncology and a deal worth up to $3.3bn for vaccine maker Affinivax last year.

Bellus’s drug, camlipixant, is in a late-stage trial. Luke Miels, GSK’s chief commercial officer, said it had the potential to be “best-in-class” for refractory chronic cough, for which there are no approved medicines in the US or EU.

“This proposed acquisition complements our portfolio of speciality medicines and builds on our expertise in respiratory therapies,” he said.

Last year, sales of GSK’s drug for severe asthma, Nucala, rose 25 per cent to £1.4bn, while revenue from Trelegy, a treatment for asthma and chronic obstructive pulmonary disease, soared 42 per cent to £1.7bn. GSK would use the same sales force to sell camlipixant, if approved.

GSK last year spun off its consumer health division in a deal that handed the drugmaker a dividend of more than £7bn and a roughly 6 per cent stake in the FTSE 100 consumer health company to sell down over time. At the time, it said it planned to invest the proceeds in research and development, including acquisitions.

But GSK still has a far smaller cash pile than many of its rivals, which are also looking for purchases to strengthen their pipelines. Merck recently agreed to buy Prometheus Biosciences for $10.8bn, while last month Pfizer announced the industry’s largest deal for four years, acquiring oncology biotech Seagen for a total enterprise value of $43bn.

GSK said on Tuesday that it would pay $14.75 per share in cash for Bellus, representing a premium of more than 100 per cent to the Canadian’s company’s closing share price on Monday.

The transaction is expected to close in the third quarter, or earlier, and GSK forecast it would be accretive to adjusted earnings per share in 2027, the first full year that it expected to be able to sell camlipixant.

Roberto Bellini, Bellus chief executive, said the deal validated the “hard work and dedication” of the biotech’s employees.

“As a leader in respiratory research for over five decades, GSK shares our commitment to bettering the lives of individuals suffering from a persistent cough,” he said.