GLAXF - GSK plc (GSK) Presents at Redburn Atlantic CEO Conference (Transcript)
2023-11-29 15:16:06 ET
GSK plc (GSK)
Redburn Atlantic CEO Conference
November 29, 2023 04:00 AM ET
Company Participants
Luke Miels - Chief Commercial Officer
Conference Call Participants
Simon Baker - Redburn
Presentation
Simon Baker
Good morning, and good afternoon, everybody. My name is Simon Baker from the Redburn Atlantic biopharma team. It is our great pleasure to introduce Luke Miels, the Chief Commercial Officer for GSK.
Luke thanks very much for participating.
Question-and-Answer Session
Q - Simon Baker
We'll move straight into Q&A because we have got a lot of questions to get through. So let's start with probably the most topical issue, and I wonder if you could give us the latest updates on Arexvy. The launch has been a fantastic success so far. So, where are we now? How should we be thinking about this from a growth perspective into 2024?
Luke Miels
Simon, yes, thank you, strong launch. Actually, if I look at the most recent weekly data, we are still only off a little bit by about, it is about 4%, so at 366,000 patients dosed just last week. And in contrast, flu was down 25% on the volume of the week before COVID around 19%, and the competitors RSV vaccine also dropped slightly more than us, and we actually increased our market share to 71% of the volume in the retail environment.
So, it is following a trajectory that we expected in terms of being seasonal. What we will know, by the end of the year is, what's the baseline because of course this vaccine can be used outside the season and that will be interesting. Obviously, with the Thanksgiving coming up this week, we typically see a drop in volume. But, that should normalize the week after that.
In terms of next year, I think we are working very hard to build on that success in the U.S. We will have obviously another competitor in the form of Moderna entering the market next year. But we are working very hard to ensure we are well-placed there. We also have the 50- to 59- year old data, which essentially shows equivalent activity what we are seeing in the 60 plus. Our aim is to have that ready for ACIP in June of next year, so that would give us the broadest label in that population and really further arguments to stock Arexvy over the alternatives.
And then, of course, we are continuing on the global launch driving expansion outside of the U.S. So, we will add another 18 countries next year and then, within the next three years, we will be up to 60 countries, which is the core element of the opportunity for RSV. So, good start, still a lot of unknowns at this point. I think the key thing is we are not assuming this is a one and done vaccine. Our working hypothesis is this is about a two-year coverage, we would be very surprised if we saw this extending into three years.
Simon Baker
And with that 50 to 59 edition, can you just remind us what is the addressable market in terms of numbers in the U.S.?
Luke Miels
Yes, I mean, I think if you look at the total 50 plus, it is about 120 million, 140 million people. Now, we think the 50- to 59-year-old population is not going to be healthy individuals. It's going to be individuals at risk. I instead gave some hints of that, and so, you know, in contrast to Shingrix, we think it'll be individuals at high risk of contracting RSV, comorbidities, immunocompromised.
So, it is a smaller number, but still at several million patients that we would add that. The main advantage is the fact that, we have got a broader label. And so from the point of view in the retail and non-retail stocking that adult population is just simpler for pharmacies. If they have someone who is 52 that walks in, if they have got Pfizer vaccine on Moderna, they also need to stock us, so it's about simplicity.
Simon Baker
And you talked about the rollout to an additional 18 countries next year. In terms of the rollout and the pricing, which I gather is broadly flat around the world. How big is that ex-U.S. opportunity? Inevitably, everybody is focused on the U.S. at the moment because that's where the action is and it is traditionally the big market. But we have seen this with Shingrix, where there is tremendous growth now from outside the U.S. How should we think about the Arexvy opportunity internationally?
Luke Miels
Yes, along similar lines, I mean, you have healthcare systems that are heavily geared to flu vaccination and adult vaccination. Once you have navigated that initial approval, you are also seeing a liberalization of where vaccines are being delivered. There is some early signs in European countries for example to shift more adult vaccination into the pharmacy setting. I was in, actually, was in an emerging market the other day, I was very surprised to see that they are working with pharmacy chains to expand that.
So, yes, I think the ex-U.S. opportunity will be a sizable source of revenue in the next few years. We just need to navigate that national approval process and get on those tenders. We are going to keep a very tight collar on the pricing as we have done with Shingrix as well because we're looking at this -- this is a multi-decade journey for this vaccine. We don't think there is going to be superior RSV vaccines which become available. We don't think there is a big opportunity for triplet flu COVID RSV vaccines. So, we need to take a very long-term view in terms of the value for this vaccine.
Simon Baker
And sticking on the theme of vaccines and going back to Shingrix, it has been tremendously successful in the U.S. The growth simply through penetration has started to slow down, but where is the remaining growth potential for Shingrix in the U.S.? There are still a lot of people that could and should benefit that don't. So where's the next leg of growth coming from? Is it purely the annual age cohort or is there more to it than that?
Luke Miels
It's more to that, Matt. If you look at the total target population, we still got about 80 million people who are within label that are not vaccinated, and typically 4 million people in the U.S. turn to 50 each year, so it is a combination of those things, and I think. we will see similar levels of revenue next year that we have been able to achieve this year.
The other factor is that RSV and Shingrix are synergistic for each other in terms of the retail policy settings. Someone comes in for Shingrix, there is a possibility for the pharmacist to also explain the benefits of receiving Arexvy and vice versa. And we have worked actively with the pharmacy chains to promote that advantage.
And of course, someone comes back in after their first primary shot of Shingrix, it is a second opportunity for them to have the benefits for Arexvy outlined to that individual. So it is a combination of deeper penetration of about 33%. We typically do about 1% incremental penetration each quarter, and now we are starting to restructure the marketing campaign to go to sub-populations within the U.S. market that historically we have not had this target of the campaign, and then when we have done that, it seems to work very well.
As you said, we have got the growth opportunity outside the U.S., which is going well. In Europe, we have signed broader access agreements in Japan, Australia, Canada and we are early days in emerging markets. You would have seen the deal that we did with Zhifei, highly successful Chinese vaccine company, with agreed dose purchases. It's another 3.6 million doses into China next year that we have with that agreement.
So, there is a lot more runway here, and then ultimately, the two life cycle programs we are very interested in is one is just, at what point do you see an exhaustion of the efficacy? We see about an 80% efficacy at 10 years. Next year, we get the 12 year data. At some point, we will see breakthrough in higher risk individuals either IC, but also potentially comorbid. But that's an opportunity with a booster to go back and recharge that population.
And then we continue to be intrigued by a series of signals in dementia, which is, we want to explore that relationship and see if we can establish something. If we were able to do that then of course high risk probably won't work but could be a very interesting outcome there for Shingrix.
Simon Baker
On the re-vaccination point, is there any framework guideline from the regulators to when that is appropriate. Was that essentially your call and payers' willingness?
Luke Miels
Yes, there is nothing in the context of Shingrix, so that's something we would to engage with the agencies on. And that's why we are very interested in getting the 12-year data because we do see even in the 10 year data, if you look at individual case studies, we start to see, a particular, the IC patients starting to see breakthrough events, which would make sense.
Their immune system is compromised. Immune memory makes sense at what point is the threshold, where that's high enough to justify the benefit risk of re-challenging those patients with a booster shot. So I think we are getting close in the next 12 to 24 months where we will have enough of the picture to interact with the FDA. And then, if it is appropriate to develop a clinical program to reconcile that.
Simon Baker
That's all very clear. So let's move away from vaccines. We have the approval of momelotinib early this year or Ojjaara. And I think by most common consent, the label was better-than-expected, line agnostic. But how did it sit with your expectations? And how should we think about the ramp, and indeed in light of recent news, how should we think about the competitive landscape?
Luke Miels
Yes. I mean when we were assessing and trying to evaluate Sierra prior to the acquisition, we always had a scenario, it was an upside scenario that we would get a line agnostic label. But we didn't put that in the base case. And as we communicated to shareholders at the time, second line is the baseline assumption that they should model. But we put the file in seeking a line-agnostic label and did a lot of work behind that and I think the broader clinical practice indicated that, there is a very high burden of anemia and subsequent requirement for transfusions, which we know is heavily correlated with a poor prognosis and reduced life expectancy.
I mean, typically, someone who is not anemic at the point of diagnosis has just under eight year life expectancy, if they are heavily anemic. And then, that's around two years. So there is a highly disruptive element there. There is the burden for the patients. So, I think the agency recognized that. And again, the program was really well executed by Sierra building on the original, work that was done by Gilead.
So, yes, a good ramp so far with about 500 patients on, already. There are a mixture of patients who salvage who have been obviously treated with multiple agents in the past, there's a number of people who had come off ruxolitinib that have been reestablished on momelotinib, and then they're straight out naive initiation. So it's quite exciting. The reception's been really very strong both in the U.S. and of course we're seeing encouraging signs ex-U.S.
So yes, an exciting one, and I think your product all the market research we did as part of the assessment and valuation was very, very clear that hematologists recognize how disruptive anemia is for these patients. And they also could see the beauty of the mechanism this ACVR1 effect on top of JAK that helped to address that. So, it -- yes, and I think with the vet data out in the last couple of days, I think also it makes things a lot clearer. Clearly, the FDA wants to see symptom relief. And so, I think with momelotinib, we continue to be in a very strong position for those patients who are anemic who need a JAK inhibitor.
Unidentified Analyst
Absolute, very clear. Let's move on to a slightly let bigger picture question moving away from products, the relationship between the commercial and R&D organization in any pharma company is a delicate one that that needs to be carefully managed. So, I wonder if you could describe how it works within GSK, and how it's evolved under your leadership and Tony's on the R&D side.
Luke Miels
Yes, sure. I mean, I've worked in companies where it's good and it's bad. I mean, unfortunately in my time at Roche and AstraZeneca, and now GSK have been privileged to work with fantastic R&D partners, and you're absolutely right, because any extreme situation, let's say commercial's too dominant, well then the organization basically says, look get me the 18th ACE inhibitor, and we'll give it to the sales force, and they'll do what they need to do with it, which so that suppresses innovation.
If R&D is too dominant, then you end up with innovative, interesting things, but they may have the wrong comparator. Typically, the dose is probably too low or the market opportunity is not there. So, this healthy balance between the two is very important. And I think, what is critical on the commercial side is that the individuals that we place in roles where they're interfacing at the project level with R&D. These are scientifically fluent individuals that are commercially credible.
So, the head of the U.S. will listen to them, but they have a comfort in a scientific environment and credibility there so that they can influence the R&D organization and also vice versa within the R&D organization, individuals that understand the demands and the fact that ultimately we need to translate the clinical program into a level of differentiations to justify the investment. So I find it's very easy working with Tony. We're both very clear about what we need. And this model was originally developed way back with Pascal at Roche and then we replicated it at Astra and frankly we just copied it again at GSK and it works.
Simon Baker
And to get to for that situation to where you are now, has the organization changed much in the last few years?
Luke Miels
Yes, a lot. I mean, I'll give you an example of the commercial organization. So a lot of individuals that we're interfacing with R&D were -- they were good people, but not necessarily our best and brightest. And so, we've rebuilt that team. We have a rule that if you want to become a general manager in this organization, you must do a tour of duty, typically three years working with the team that we call Global Product Strategy.
So that's the group that works up the TMP, that's the group that's involved in business development, and that is the group that works incredibly closely with the R&D organization and medical affairs to develop these products. And so, these people are most capable and most likely to be able to provide directions to the R&D organization in terms of what's required. Tony on his side has made a lot of changes, and his organization has layered it, it simplified it, the governance is much faster.
And then the other advantages, we have therapeutic leadership teams, so very compact individual teams, which is chaired by the commercial person. The R&D person is the individual, is the key partner. And then that's replicated at the broader zero steering committee, which is co-chaired by Tony and I. So very flat structure we know all who the key project leads are. We can cut through if there's a problem pretty quickly. And yes, this model works. We know that. And now we've got it up and running in GSK that should drive higher pipeline productivity and time.
Simon Baker
So, innovation come both internally and externally. We've talked about internal, but can you give us some insights into the current state of business development? The funding environment for early stage still looks, looks fairly dire. There are a lot of biotech companies which are trading with very limited cash and even more limited scope for fundraising. So, what does the landscape look like at the moment? And how has it changed over the year? Are we seeing improvements or is it still except for want of a better word a buyer's market out there?
Luke Miels
Yes, there's still a lot of pressure out there. Of course the good companies have that they'll get funding and the good projects will get funded. It's the ones which are in the middle there and obviously the bad projects, everyone can see them and they shouldn't get funded. But there are programs where you can take a bet and an educated risk.
And I mean, I wouldn't say we've got capitulation on the part of biotech boards in terms of okay we won't get funding. But it's definitely, it's an attractive environment to do BD and we are very busy. It's a big chunk of -- it's about 20% of my time I spend working with the business development team and with Tony. And the therapeutic area teams looking at BD, opportunities, I think we're very strict and careful, when we deploy shareholders' capital.
To do those deals, we look for things which are there's really two buckets of deals that we try and do. One's like momelotinib and camlipixant, which we think are disruptive technologies that are going to address an unmet need. And we've really got high confidence that we have a best in class asset there, that may not necessarily be in an area that everyone's looking at.
And then the second type of transaction what we try and do a sort of smaller tuck in deals where we see very high value and something that's synergistic with our existing portfolio, and we think we can unlock value by completing that transaction and that tends to be obviously at the lower end of the transaction scale in terms of capital deployed.
Simon Baker
And what at the moment -- what is the limiting step? I mean, I suppose, at some point then there's a capital limitation, but I suppose on a day-to-day basis, there's just a question of bandwidth and how many deals you can look at the moment.
Luke Miels
Yes. I mean, we have the capacity to do the deals we need to do. I mean, obviously the most important thing is to improve your own internal productivity and your R&D activities. And there's a huge amount of energy going there, but to supplement your own internal innovation is very sensible. And, yes, so it is a bandwidth element. It's a quality element. And it is also just, yes, sometimes it is really just sequencing, thinking, okay, if we bring this program on, it is going to conflict with these other activities we have in that therapy area.
Do we have the capacity at this point to do it justice? I think that's where discipline is important. The types of deals we continue to look at are very much like camlipixant and momelotinib in that couple of billion range, not mega deals, and then the tuck in deals are in the hundreds of millions in that zone there. And when you aggregate all of those things, I think we are beginning to unlock some value.
I think the result that we got with the FDA, with momelotinib, we have a new team in oncology for the last couple of years. This is their first deal that they executed. This is now the team and that's working on Blenrep with DREAMM-7 and DREAMM-8. And frankly, candidly, they are the team that I work with at AstraZeneca. And so, we have been able to reconstitute that team along with the key person in business development from AstraZeneca.
So hopefully, that judgment in terms of how DREAMM-7 and 8 have been designed, how we are doing BD development deals, the lifecycle work we have with Jemperli, our PD-1. This will start to be visible to people, but we have the bandwidth and the fire powder continue to do more business development where we see value.
Simon Baker
That's very clear. Now in terms of the macro challenges and pressures on the industry, probably the biggest one or the biggest one for years has been pricing in the U.S. And more specifically, at the moment, the U.S. Inflation Reduction Act. How does that affect GSK because there are potential positives and negatives there in terms of price negotiation versus vaccine access, netting it all off, how does IRA affect GSK?
Luke Miels
I mean, I think in the short-term, it is a positive. Critically, the removal of the co-pay for seniors, the Shingrix and Arexvy is very important. We know about a fifth of patients rejected a Shingrix shop historically because of co-pay considerations. Obviously, commercial patients did not have a co-pay so that was something that was impacting all the patients. And you saw the structural shift in the market with the recognition of vaccination is an intelligent usage of health care resources to prevent. And so, that has been definitely a benefit for us.
I think, clearly, we expect products like Trelegy to be in the negotiation, in around the 2027 time frame. So net, net, it is it's neutral to positive based on what we know today. I think the important thing is, if you look at when the Affordable Care Act came, Obamacare came in, it essentially resulted in about 10 years of stability for the industry. And so, if IRA does bring in a degree of stability, then everyone knows the framework that they are working. I suspect there will be tweaks in time.
I don't know that, there was the intent of the individuals that frame the legislation to suppress studies in smaller populations in oncology. For example, so I expect there will be some tweaks in time. But in the end, I think we can navigate, the IRA, and the U.S. is still a very encouraging environment and rewards innovation and rewards innovation very well. So, I think we are based on what we know at this point, well placed.
Simon Baker
And so despite the numerous legal challenges, you don't expect any major changes to IRA either in terms of what it is or when it will come to pass.
Luke Miels
Yes, I mean, I think, I am not a constitutional lawyer and lawyers of course tend to give 50/50s and so let's see. But I think our working, well, our working hypothesis is that the legislation as it's remains in place.
Simon Baker
And then the second question really for this side of the Atlantic. There are European commercial proposals for the farm industry especially around data exclusivity, and yesterday, the UK government announced changes to the VPAS scheme. How do both of those impact GSK?
Luke Miels
Yes, I mean, I think the European legislation still has a number of evolutions. I think the industry association of which we're members of has been very clear in terms of the practical elements of that legislation and different access regimes within European countries. So, let's see. I think this is going to take some time to emerge and you could see a lot of adjustments over time.
So I think it's one more to watch. In the UK, this was very important to resolve and our general manager for the UK was deeply involved and a leading member of the discussions there. So, I think it was important to have addressed that. And other companies are on record in terms of their views on innovation. So yes, now we can move forwards. We have clarity and that's our intent.
Simon Baker
Excellent. Let's go back to vaccines but slightly earlier. How important commercially is the pneumococcal 24-valent vaccine, not just in and of itself as a product, but in terms of how it impacts the commercial profile of the whole vaccine’s portfolio?
Luke Miels
Sure. I mean, it's a very important product for us was an important deal. I think what attracts me is, if we originally were in the PCV market with Synflorix, and we're outmaneuvered by Pfizer and Merck, by the argument in terms of strain coverage valency. And so, we didn't evolve Synflorix and the market moved. And so that's where it struck me as an enormous opportunity in terms of still you've got around 60% coverage in adults with PCV 20, Prevnar 20.
So, there's a lot of headroom here to improve on that. And the entire market has been primed to expect every few years’ broader coverage for a similar sort of price or similar value proposition. So I think us coming in with a ‘24 and then subsequently a 30-valent is a big opportunity both just in terms of the technology in itself because Pfizer has hit a ceiling in terms of the conjugation capacity there. And we think we've got a very compelling proposition versus Merck with their program there.
So yes, it's a big market. And also, what we can then do in adults, but also pediatrics is put that in our broader portfolio, particularly in pediatrics having a wide range of products as important. The bulk of these vaccines are given in a non-retail sort of in-office setting. So, it's less important for Arexvy and Shingrix. But yes, it's an important product and I think one that's a multi-billion potential as we've guided you before.
Simon Baker
Do you think that the market and investors really get this point because I think there's a temptation to think that there's such a strong established incumbent in there that it's going to be very difficult for others to come in. But I mean, as you said, the situation was different originally and Pfizer came in and, and of course with Shingrix that came into a monopoly position and wiped away the opposition. Given the differentiated offering, and as you say, the evolution of the market, is it effectively up for Gardasil in its entire?
Luke Miels
I think it is. And the other example, which we had direct experience the HPV market where we were there with Merck, and Merck shifted. We had too, and then they brought in Gardasil 4 and then Gardasil 9. And so they have completely changed the market. And I don't think there's any loyalty to vaccine brands on the part of physicians if there's a better opportunity to cover more patients.
So, if you look at our 30 strain, we can cover about 60% efficacy in adults. We have the capacity with our 30 strain to cover nearly a 100% percents about more than 95% of strains. With the 30 plus that we're developing, that's a profound shift in efficacy. And I don't think physicians are going to hesitate to shift from the older technology to the more effective new opportunities.
I mean, it's completely rationally driven by data as we should be. And if you've got a more effective vaccine and it's priced competitively, they'll shift. As you said the Zoster vaccine 50% efficacy, we bring Shingrix and Zoster vaccine has disappeared, and that's how it should be, frankly.
Simon Baker
And as well as the profile presumably you have no disadvantage in your ability to access those prescribers within the pneumococcal virus?
Luke Miels
No. I mean, we are calling on those prescribers every day today with Shingrix and Arexvy, and we also calling on them for with Trelegy, for example. It's very heavy overlap with the patient population there. And then we see those pediatricians every single day with booth streaks and our full pediatrics Veyo, et cetera, our full pediatrics portfolio in the US and of course we're talking to the same payers in the European setting for the broader national immunization programs and the tenders there.
So, there's enormous synergies with our business and that's why we thought we had been essentially ejected from the market by Pfizer historically with Synflorix. So, we've retained that knowledge and decided to come back in. And yes, we do think this is a very large opportunity and one that is ripe for disruption because of this ceiling on the conjugation technology that Prevnar has reached.
Simon Baker
Now we may have partly answered this question with that answer, but I'll ask it anyway because I'm sure there's more to it than pneumococcal. But what do you see as the most underappreciated assets in GSKs commercial and development portfolio? I think with any pharma company people, the market tends to, tends to focus on narrow segments of the portfolio. I certainly don't think that GSK is any different there. And my view is that you probably have more things which you've been overlook than many, but it would be great to get your thoughts on what they are?
Luke Miels
Yes. I think in the late stage portfolio camlipixant, the chronic cough medication is, and I just think it's because there are no solutions today for chronic cough that are widely adopted. So people don't have fully established models, but the FDA is quite striking. There's about 28 million people with chronic cough more than more than eight weeks and there is about 10 million people who have been coughing for more than a year, and it is gone through typically on average, about five specialists before they reach a diagnosis.
So, there is a big opportunity in the U.S. and you break that down even more and you look at just all that 10 million those that are being managed by pulmonologists. At any one time, it's around 800,000 people in the U.S., and pulmonologist side, I think, is about a 3% satisfaction with current options. So this is a very difficult condition. It's one that's typically, as I said, takes a long time to diagnose in a journey through the health care system. After things such as lung cancer and IVF and reflux are excluded.
And so that one, I think is a significant opportunity, and we have got a track record in building products, and in new areas, and we have done that successfully. And hopefully, we are about to show continuing in 2024 that we have done that with Arexvy. That one, I think momelotinib, a long acting IL-5, I think people tend to look at it as okay you are just going to cannibalize Nucala. I think that ignores a lot of analogs in the industry, where you bring in a longacting product with the well known mechanism that is material upside.
We still only have about a third of the eligible patients even in the U.S. despite really high insurance coverage, being treated with biologics that's in complete contrast to say rheumatoid arthritis. It makes no sense. And so, I think a long-acting, twice-yearly shot to give full coverage for severe eosinophilic asthma patients is going to be exciting and one that is going to be much bigger than Nucala. And we have shown with Trilogy that we can grow a product without cannibalizing our own business.
So in the late stage portfolio, they are the two big ones. I think in the early stage portfolio, one to watch is HSV. It is a therapeutic for the genital herpes using the adjuvant technology that we have with Arexvy and Shingrix, but it is being developed as a therapeutic, and there could be applications for HSV 1, as well. So that's definitely another asset to watch. So they are probably the main ones that people are not as aware of.
And I think also, Jemperli is getting quite interesting in particular subgroups in colorectal cancer, MSOs, high populations, and also the endometrial gynecological cancers. They're the ones I think that people are probably under representing in their models.
Simon Baker
And it is interesting you mentioned, rheumatoid arthritis, because if we go back to the advent of biologics in that space, these were seen as highly specialist salvage therapies prescribed by very few people beyond the real leading KOLs, and now they are incredibly why do you use standard of care within the primary setting. Do you think over time biologics in the respiratory space this could move maybe not as far as that, but we go from the severe to the moderate to the bit less moderate and what's the real opportunity here?
Luke Miels
I completely agree and I can still remember working on leflunomide, there is been intrigued by the lack of shift towards TNS. And I think, as you see, physicians get more comfortable. Also, physicians who are in the teaching pipeline that come through and they are educated in academic settings and that becomes just a standard proposition to employ this, you also see a proliferation of alternative mechanisms. We have the IL-5. We have, obviously Xolair has been there a long time with the IgE, but the T slips IL-413.
So, there is just a lot more commonality, and insurance is really not the barrier. It is really physician reluctant to deploy them more broadly. I think what is interesting is we've generated this data ourselves and are publishing this ability to intervene earlier in the disease and potentially move patients to remission. I think that could be the inflection point there as well as just lowering the burden for the patient and adjacent in terms of big shops a year, there could be a part B medicine versus a part D for older patients. And of course in the commercial setting, there are certain advantages to physician administered products as well which are well known.
But I think, yes, it has the opportunity. And then the other important thing is with Nucala, it took us about eight years to get a number of indications in and we still don't have COPD completed yet. Our intention when we launched depemokimab is to get all the primary indications, EGPA, HES, nasal polyps, all of these within two years of the initial indication and severe asthma. And the only one that's a little bit delayed is COPD, because we want to de-risk it with Nucala. But yes, that's going to have a big difference in terms of the utility for allergists other groups to use it.
And I think that's the other interesting thing is allergists seem to be quite aggressive in using biologics, and also, we're seeing E&O and so surgeons being very quick to adopt these products in nasal polyps as we've generated the data there. So, let's see what it's like in five years-time. I definitely think we're going to be a lot more broadly used and people are more comfortable with them, and in 10 years time it should be the exception rather than rule for these severe patients.
Simon Baker
So having that broad range of indications within the respiratory setting is as important from a formula in a reimbursement point of view as we see in the inflammation space where multiple indications really doesn't agree?
Luke Miels
Definitely, it's simplification, and being able to be used more broadly. And of course, allergists, pulmonologists treat patients with several of these indications, and yes, it's just simpler for the systems, simpler for the offices.
Simon Baker
That's very clear. Another new product, which has produced some excellent data recently, has been gepotidacin. But again, I think that's probably something where the market's not given much to it because historically there's this unfortunate paradox that the better the data on an antibiotic, the smaller the cells because it gets used for that rainy day that never comes. Is that still the case or should we think about this differently?
Luke Miels
Yes, I mean, it's very interesting. When we're looking at the Phase 3 program, the decision for gepo, we spent a lot of time on this. And what appealed to me is, if you look at a typical treatment hierarchy for uncomplicated UTIs it’s about 13.5 million women in the U.S., many of these women are drug resistant or intolerant. You see multiple events at nursing homes, et cetera. And typically, they're prescribed Nitrofurantoin, which is penny it's off patent. And if they fail that, which a large proportion of them do, then the drug of choice at that point often is fluoroquinolone.
And that's despite FDA guidance to say, don't employ fluoroquinolones, that alone with of the renal complications, et cetera. So what attracted me to gepo was that you could almost turn that argument on its head because gepo is only been developed in two indications. It's being developed for uncomplicated UTIs and drug resistant gonorrhea. So, a very, very targeted mechanism, limited use outside those settings in contrast to fluoroquinolone, which are used everywhere.
And so, our arguments going to be after the patient fails for Nitrofurantoin, you shouldn't be using a broad spectrum antibiotic, which is typically the argument used to stop novel antibiotics being used. You're degrading fluoroquinolone as resistance is increasing in the U.S. and Europe from using these, you should be using gepotidacin, which is designed to reduce resistance emerging. We've got good data on that and preserving fluoroquinolones for more severe infections beyond uncomplicated UTIs.
So, that's the argument that we're mounting. We recruited the study very quickly. As you said, the data's good. We just now need to obviously get approval, but that's our strategy in terms of guidelines and the argument, it's about preserving broad-spectrum antibiotics by using a very targeted specific antibiotic, which is only going to be used in uncomplicated UTI and gonorrhea. So, it's very different to a novel broad--spectrum antibiotic, which yes, tends to be preserved.
Simon Baker
And does it therefore offer a potential blueprint for further work in this area because GSK has got a very long history within the anti-infected space.
Luke Miels
Yes.
Simon Baker
And moving to a more niche indication model rather than looking for that new standard of care, is that from a commercial point of view probably the way forward?
Luke Miels
Yes, and I mean, it's very interesting. I mean, the numbers are quite compelling. If we got a quarter of those 25% fluoroquinolone patients in the U.S., we have a blockbuster product here. So, it is material, it's highly synergistic with the portfolio that we've assembled as well. And another example to build on your point is a deal that we did with SCYNEXIS for Brexafemme.
So, it's an antifungal because of course antimicrobial resistance is not limited to bacteria. Fungal infections are very problematic and increasingly problematic. And then we also did another deal for a product called tebipenem, which is an oral carbapenem. So, it's another argument if you look at complicated UTI, these patients require admission in many cases, and subsequently, when they're admission admitted, they may get hospital-acquired pneumonia or other infections, and they complicated to manage.
What attracted us to tebipenem again is a very good value deal, was the fact that these patients with complicated UTIs could be managed by urologists and infectious diseases physicians in the community and not required admission to a hospital. You can have a nurse come and supervise the taking of the oral dose and that from a cost-effectiveness, resistance, et cetera, and just the complications for the patients also really compelling opportunity.
So again, where we can and discipline way find products that are going to do something different in the antibiotic and effectors area will pursue that aggressively.
Simon Baker
And do we see those arguments carrying dramatically different weight in different regions? What's the European perspective versus the U.S.?
Luke Miels
Yes, definitely different arguments. I mean the U.S. hospitalization costs et cetera the system tends to be a lot more sensitive to that. Europe, it's more cost effectiveness than the comparators. So, some of these -- we think there is a business for gepotidacin in Europe, but tebipenem is more of a classical U.S. product because of that dynamic in terms of admission versus at home treatment in the U.S. And we think the effectiveness is very strong because of the costs associated with admission for complicated UTI patients in U.S.
Simon Baker
Excellent, I think we have come up to time. So, Luke, thank you very much for a fascinating discussion and for participating in the conference. And thank you to everybody listening. Thank you.
Luke Miels
Thank you, Simon, and thanks everyone listening for your interest in the Company. Thank you.
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GSK plc (GSK) Presents at Redburn Atlantic CEO Conference (Transcript)