GlaxoSmithKline plc (NYSE:GSK ) UBS Global Healthcare Conference Call May 24, 2022 9:15 AM ET

Kimberly Smith - Head of Global Research & Medical Strategy

All right. Good morning, everyone. Welcome back to day two of the UBS Global Healthcare Conference. My name is Laura Sutcliffe, I am a pharmaceuticals analyst here at UBS. And it's my great pleasure to have with me this morning, Dr. Kimberly Smith, who is the Head of R&D at ViiV Healthcare which most of you will know is GSK's HIV business, although, of course, it's a JV with Pfizer and Shionogi.

So Kim, welcome. It would be great if you could start just by talking -- just introducing yourself and talking a little bit about kind of where you're leading the HIV business at GSK at the moment and then we'll get stuck into some more detailed questions. In the audience, if you have questions, please scan the QR code. You're just a couple of clicks away from appearing on this iPad and we'll get your questions answered.

Excellent. So as Laura said, I'm head of R&D for ViiV Healthcare. I've been with ViiV Healthcare since 2013. Prior to that, I spent 20 years as an HIV infectious diseases treater and researcher. So where are we going with HIV? Well, we see ourselves as the innovators. As the only company that's 100% focused on HIV, we feel like we want to move the needle for patients and we want to address the questions that they have, provide better and better medicines. And so we're leading the field towards using fewer medicines to keep HIV under control. We're leading the field towards long-acting therapy. So instead of taking a pill every day, we now have an option for individuals to dose once every two months. We're looking to take that even longer. We're also looking to find a way to get that long-acting therapy in the patient's hands so they can do it themselves. So self-administered, long-acting therapy, because right now, you go into the clinic every two months and get your dose.

And then, we're also working on -- we're working towards cure. We have a collaboration with the University of North Carolina, a little company called Qura, that's Q-U-R-A, where we have our ViiV scientists really in the lab, shoulder to shoulder with UNC basic scientists working on cure strategies. And so we really see ourselves as sort of an end-to-end business for HIV. We've also, just now this year, entered into the PrEP space. So we got our first agent for HIV prevention approved at the end of last year. And so this year, we've launched it. And so we are in every part of HIV, from HIV prevention treatment all the way through to working towards cure.

Super. So maybe let's talk about how things are today. So how the pandemic has impacted the way in which patients are being treated, how you've managed the launch of your first long-acting treatment against those headwinds or maybe there's some tailwinds we don't know about and what else you see in terms of patients taking up new treatments like your two drug regimens.

Great. So what has happened with the pandemic? What hasn't happened with the pandemic? What we know is that the pandemic did change HIV care and that people typically came into the clinic, saw their doctors. HIV treatment is very dynamic. People do switch as newer and better medicines become available, people tend to switch on to newer medicines. And that's really what we -- what's been driving a lot of our business, is moving people from three drug regimens to two drug regimens or from oral therapies to long-acting therapies. And so the pandemic meant people weren't coming into the clinic because the clinics were shut down and because a lot of the doctors who take care of HIV or the same infectious disease doctors who got pulled away to manage COVID. And so you saw the switch market really collapse. And so -- and even the Department of Health and Human Services in -- who put out the guidelines for HIV therapies actually made a recommendation that you kind of -- during the pandemic, that you don't switch people, that you kind of keep things steady because they're not coming into the clinic.

Now people were having virtual visits in some cases but not a lot of switching. So at the height of the pandemic, switching -- the switch market went way down. It's begun to come back but it hasn't recovered all the way yet.

Now so we launched Cabenuva which is our first long-acting therapy, again, dosed in the clinic every two months in the middle of COVID which is not ideal because people weren't in the clinic. And this was -- I'll just say that this was highly anticipated because first long-acting therapy, people have been wanting long-acting therapies for a long time. And literally, doctors had a waiting list of people who they were going to put on Cabenuva as soon as it got approved. But then we had a pandemic and so it's impacted the speed at which we saw uptake of Cabenuva for sure. But we're, again, starting to see that turn around, too. Because when we first launched it, we launched it with monthly dosing. We've since then got approval for every two monthly dosing. And we initially had -- you started it with an oral lead-in. You took pills for a month and then went to the injection. That's now gone, that's optional. And so it's easier for docs now.

And so they've had a year now to start getting their clinics ready, create the infrastructure that you need, because this does change HIV treatment in so many ways. It's -- instead of you just write in the script or putting your script into the electronic medical record, you actually are giving them their dose in the clinic. And so there were some logistics that needed to happen for clinics to be ready to do it. But we're really seeing a significant uptick and a tremendous amount of excitement from providers and patients for Cabenuva.

And then, let me just also talk about the shift from three drug regimens to two drug regimens. So our two drug regimen, Dovato which is dolutegravir and lamivudine, has shown itself to be as effective as a three drug regimen. And it has -- it is very popular as a switch option. So if you're on three drugs and you can take two drugs and get the same outcomes, most patients easily say they would rather take less. And so we're seeing that switch start to come back with people switching to Dovato. And I think Dovato is somewhere around 15% of switches now and then we're starting to see significant uptake of Cabenuva.

Okay. So I think we'd all admit that you were right about two drug regimens. People were skeptical and you guys were right. Do you think there's a more obvious appreciation for a move to long-acting therapies in the longer term? Or do you feel yourself kind of butting up against the same skepticism, the long-actings of the future?

You're right, people were skeptical and didn't believe that two drug regimens were going to work. We were confident. And the reason we were confident because we had the right drugs and we followed the data. For long-acting, I have no doubt that we're right about long-acting being the future of HIV treatment. And I know it because of the response from patients. So the patients that are in our clinical trials, we surveyed them, we asked them how they felt about the long-acting treatment, 9 out of 10 of them said, comparison to oral, they'd rather be on long-acting. And when you ask them why, it's because it changes their life, literally changes their life.

They no longer think about the fact that they're living with HIV which is still a very stigmatized disease. So they're not thinking about it every day like they used to when they were taking a pill. They don't worry about forgetting it. They don't worry that when they travel, somebody is going to go through their luggage and pull out their pill bottle and say, what the heck is this and then they have to disclose to the world that they're living with HIV. I mean there's so many things about their lives changed. It's like they come and say, it's like a weight was lifted off of me.

And so that energy, that excitement from patients is what makes us know long-acting is critically important. But if you didn't believe that, you can look at what our competitors are doing. And so they were skeptical about two drug regimens. All the regimens that they're studying now are two drugs. They are skeptical about long-acting, everything they're studying now is long-acting. And so we've led the field. We're ahead of the field quite a bit because we were innovative years ago and they're trying to catch up now.

So I think when we first started sort of appreciating these drugs, we were thinking, okay, there's kind of -- there's a niche of people for whom taking a once daily pill is like a serious burden and we can envisage those people taking long-acting. We'll forecast as such, maybe like 10%, 15% of the market, whatever the numbers were. Do you feel like -- so what you're doing, what your competitors are doing, it's all pushing in one direction. Do we think that actually the potential for it is really maybe much greater than that? I'm not asking you for a number but do you see it as being like a much, much bigger chunk, ultimately?

I do see it being a bigger chunk. We have the first long-acting. It will -- we've said roughly, I think, estimated, 15% addressable market, something like that. Because if you've previously failed an NNRTI or previously failed an INSTI, that's not an option for you, right? But when you have more different long-acting regimens that are out there that can meet the needs of the folks who Cabenuva's not the right option for, absolutely, I think you will see the long-acting market grow. There will always be an oral market, there's no question. It won't take over completely. But I do think that there will be a real uptick in long acting in the -- over the course of the next decade.

So as the home of Cabenuva, what does your ideal long-acting treatment look like? Like how long are we talking, like six months, like a year-long impact? What's the kind of dream long-acting treatment?

Depends on the patient. But I think that there's probably a sweet spot that's somewhere between three months and six months. Because when you think about how frequently are people coming into the clinic now when they're doing well, so when they're doing well, people are coming into the clinic every quarter or maybe three times a year, in some cases, twice a year. And so if you can get to those types of intervals, then that will be easier.

And I think we have an intention to get there. And so we have every two months now. Our next step is to get to longer, at least every three months, so people will be coming in quarterly and then from there to every six months. And then we also want to deliver self-administered so that you're not getting your medicine in the clinic, you have it at home. And like a lot of medicines that people inject themselves subcutaneously, we'd like to be able to have your HIV treatment be able to be that. But there's different populations. So HIV, as I mentioned, everyone knows is still a very stigmatized disease. One of the things that people like about Cabenuva is that they've got nothing in their house that says anything about HIV. They don't need pills, they have nothing. And so when they go into the clinic and get their shot, they're done. They just keep going.

But for the individuals who are out to their family or out to their partners and they're very open about living with HIV and they want that control, a self-administered is attractive to them because they are okay with having something in their house. And they want to have the control to be able to do it themselves. And so different medicines -- was I the only one that heard that?

I know. I love it. I love it. But so different combinations, different modes of administration to meet the needs of different individuals.

Perfect. And I think you have a partnership around your subcutaneous delivery, if I remember correctly. Is that right?

Well, we have a new partnership that we announced last year with a company called, Halozyme, that makes a recombinant hyaluronic acid. And what that does is allows you to give a bigger subcutaneous dose. And so it's been used a lot for immunoglobulin and makes life easier for individuals that need to have a regular dose or something like that or for monoclonal antibodies. And -- but it hasn't been used in HIV. We saw a clear opportunity to use that product in combination with our pipeline medicines to basically give bigger doses subcutaneously and get to longer intervals.

Great. So learning from Cabenuva so far, sort of expected and unexpected findings or anecdotes from the launch curve?

Well, like I said, launching into COVID was not ideal, I mean, because people weren't in the clinic. But what has been a real learning is that the work that the clinics need to do to get themselves ready from an infrastructure standpoint shouldn't be underestimated. So a lot of -- some of the big clinics have created teams of folks. So they have like -- they have a reimbursement person, they have a person that they contact the patient for their visit, they have the pharmacist, they have the person who's doing the administration. They create a team. And why did they do that? Because the demand is so significant.

So they basically are pushed into creating an efficient way to do it because patients are coming in and asking their docs about it all the time, especially now that we have a direct-to-consumer -- there's a commercial out there for Cabenuva and people see that. They see the commercial and it says, now your HIV can be treated once every other month. And patients then come into their doc's office and say, hey, doc, I want that. And so the clinics have been doing their work to build that infrastructure. It gets talked about at conferences all the time. How can you implement Cabenuva in the best way? And so it's pretty much the talk of therapy now. How do you make it work and get it out to more people?

And then now we've launched Apretude which is long-acting PrEP. And so that got approved at the end of last year. And so those lessons from Cabenuva are being -- we're using those to understand how best to launch long-acting PrEP.

So while we're on the topic of PrEP, how do you think we should think about which patients can be reached with Apretude? Because there are generic oral options, it's a market where there's some choice. It's a market that a few years ago, didn't really exist. So who should we think about as kind of the right patient population of Apretude and your plan to kind of grow that?

So the CDC says that there's roughly 1.2 million people who could benefit from PrEP and about 25% of those folks are on oral PrEP right now. So it says we've got a long way to go. And there's obviously a huge growth opportunity in the PrEP space. And you might say, well, why are there so few people? And some of it is because the idea of actually having to take a pill every day to prevent HIV is just not acceptable to some folks. And a lot of those folks who might be vulnerable are not engaging with the health care system.

And so we believe that what we're offering with long-acting is very, very different and our studies showed that we were superior, not by a little bit but by a lot. So we are 3x to 9x better than oral PrEP. That got the attention of the community. That got the attention of providers. That got the attention of the U.S. government and the CDC. They basically -- the U.S. government has had a plan to end the AIDS epidemic and that's been in place for -- probably started during the Obama administration. So it's been in place for a while. Progress has been slow. You haven't had all the tools you need. This is a new important tool to get to the end of the epidemic.

And so you can imagine seeing Apretude in STD clinics, in federally-qualified health clinics, anywhere where you're interacting with potential vulnerable populations. And so that's what we see happening, reaching out to folks who otherwise aren't getting talked to. Because right now, the people that are on PrEP, about 70% of the folks that are on PrEP are white men who have sex with men, whereas roughly 70% of the new cases are among black and Latino men who have sex with men. So you kind of aren't getting necessarily the medicine to the people who need it.

And so you've got to -- we've got some campaigns that are intended to really talk to the folks that are already on PrEP and give them the opportunity to switch because a lot of people like the idea of going from a pill every day to every two months, especially when there's superior outcome. And then reach out to individuals who haven't been talked to about it. And so it's the initial switch group and then expand the people who haven't been talked to.

And do you think you can capture the population that maybe uses oral PrEP quite sporadically and bring them into a more regular care?

Absolutely, because those individuals, one of the -- when you look at the studies of people who were started on PrEP, a lot of them stop within -- stop taking their medicine within six months. Their vulnerability hasn't gone away. It's just that the idea of taking a pill every day is tough for some folks. And so it's those folks that you got to get back in and get them on something that's every couple of months so that they cannot think about it, it becomes part of the routine.

All right. Could we take a moment maybe to think about ex U.S. developed markets where, in a lot of cases, almost all patients who have HIV know they have HIV and are on treatment. If we think about it as a more mature market in that sense, how is the switching dynamic from oral to long-acting is going to work there? And then maybe in a few minutes, we can touch on the PrEP opportunities as well.

Sure. I think let's talk a little bit about Europe. Europe is different than the U.S. in that there has been a lot more -- they've been a lot more cost conscious for a long time. Actually, Europe has been way faster to have uptake of two drug regimens. They were really some of the fast movers of two drug regimens from a cost consciousness standpoint and just because they believed in the data. And so Europe is a little bit different. When it comes to long-acting, different countries within Europe will implement long-acting and be more aggressive, some not so much, some eager. Places like Germany, pretty eager; other places, U.K. may be less eager. So it will vary depending on which part of Europe you're talking about.

Okay, fair enough. And then PrEP, is this maybe -- we've always seen the opportunity, I think, as mainly being in the U.S. Is that fair?

I think the biggest opportunity is in the U.S. but biggest commercial opportunity is in the U.S. We will obviously file in Europe and other parts of the world. But the biggest numbers are in the parts of the world that have the biggest number of cases and that's in sub-Saharan Africa. And so we have a commitment to access. And so we will -- we're working with the Medicines Patent Pool to make cabotegravir for PrEP available in the least developed countries as well because we believe that it will change the trajectory of the epidemic for the world, not just in the U.S.

And so -- but other parts of the world will have an interest as well. So Canada has already approved. Japan will -- I think, recently either soon to be approved or is already approved. And so there are other pockets but the biggest opportunity for PrEP commercially is definitely U.S.

Okay. And as a company that's developing all these wonderful new treatments, how do you make sure that you have as many patients as possible on those new treatments before you start to come up against a generic oral scenario for some of your biggest drugs?

I think if you're adding value, if you're adding something that is unique, then yes, there are generic orals that will be available but patients want what is going to fit best into their lifestyle and keep them suppressed. And so we see long acting as the future of HIV treatment because patients see that. And so, yes, there will be -- dolutegravir will come off patent in 2028 or something like that. Clearly, there will be a lot of people on dolutegravir-based regimens in the future and bictegravir-based regimens at all -- but there will be a significant number and I think a growing number of people who want those novel options that change their lifestyle, make their life better.

And so when the UNH has this sort of 90-90-90 plan which was how do you get to the end of the epidemic, it's 90% of people know their status, then 90% are in clinic and 90% have an undetectable viral load. But there's a fourth 90 and the fourth 90 is quality of life. And when you start talking about long-acting, it actually changes quality of life and that's a big deal.

All right. So how do we get there? The -- I think it's pretty widely acknowledged that you have a best-in-industry pipeline at this point. Is it by luck? By scale? Can you just talk to us a bit about how you've gone about building that? Because you can't impact kind of slips and trips at competitors but to some degree, you make your own luck, right? You have all the assets that you need. So could you just talk to us about the process over the years of kind of compiling that pipeline and putting yourself in this very advantageous position?

I do believe you make your own luck, that's right. So one, I would say, first and foremost, we listen to the patient. And so we listen to the patient and they tell us what the unmet need is and we look to make medicines to respond to that unmet need. And so in 2016, we purchased the BMS HIV pipeline. That brought in a number of assets, early assets and it also brought us a brilliant discovery unit, so a discovery scientist. And so those folks are literally churning out candidates all the time. And so that is what has allowed us to build our future portfolio. We also partner well. So we've partnered with Janssen to make Cabenuva. We've partnered with the NIH to bring in a broadly neutralizing antibody. That's an important product for the future. Those partnerships are what allow us to, I think, move as fast as possible.

Shionogi is the other example. I mean they're part owners of ViiV but there are also great discovery scientists in Shionogi. And so we in-licensed from Shionogi, a third-generation integrase inhibitor last year. So they're still doing discovery. And so that's how we've built this. I do think we have the best pipeline in the industry and it's because we're always looking to improve. And again, we're good at being partners.

So lots of directions we could go with this. I don't know how much you've disclosed about the third-generation integrase inhibitor but sort of what's attractive to you about that sort of new molecule and class?

It has a half-life that's longer than cabotegravir. And so it will help us to get to longer and longer regimen. So I've talked about six months being a nice interval. We think that, that integrase inhibitor gives us the best chance to have that entity anchor that's six months. It also has great potency in the preclinical data and a very broad spectrum against resistant viruses. So we think of this as a drug that has a half-life that's longer than cabotegravir and a barrier to resistance that's better than dolutegravir; so the best of both worlds. And so that's why we're so excited about it and that's why it's third generation. And so that will get into the clinic no later than the beginning of next year. And we see that as being the anchor for the future.

And so our strategy, as I mentioned, self-administered and ultra-long-acting. Between now and the end of the decade, those two drug long-acting regimens will be anchored by cabotegravir plus a novel mechanism of action that's from our pipeline. And then, once you get into 2030 and beyond, then the anchor will become that third-generation entity and a novel mechanism of action. And I do want to take one minute and mention, again, the broadly neutralizing antibody that we in-licensed from the NIH. We will share proof-of-concept data showing that drug as its antiviral effect at the International AIDS Conference at the end of July. We are very excited to share the data. I think that's novel and innovative to think about a broadly neutralizing antibody as a drug.

So I think you just partially answered my next question which is if there's another nonintegrated inhibitor mechanism that you're excited to have in your pipeline, maybe you have more than one because I know that sometimes you have a couple of different assets in each group which mechanism are you most excited about? And if it's not broadly neutralizing antibodies, could you just spend 10 seconds explaining to anyone in the room, why broadly neutralizing antibodies are potentially a very exciting thing?

So broadly neutralizing antibodies, just to describe them a little bit, are antibodies that are identified in individuals. There are a few individuals in the world, relatively small percentage of individuals who actually make antibodies that control HIV. And so the NIH has been expert at identifying those individuals, isolating those antibodies and then optimizing those antibodies into products. And so we in-licensed one of them from the NIH called N6LS. And the nice thing about it is that it's inherently long-acting, inherently pretty well-tolerated for broadly -- for antibodies generally. And we think it's going to have pretty good potency. And so we think it's an ideal partner for cabotegravir. And so that's what's exciting about broadly neutralizing antibodies, the inherent long-acting and, again, antibodies being well tolerated.

The other potential is that because it's an antibody, you always have the potential that it has some additional effect besides this antiviral effect. Is it doing something to help reduce the reservoir, help boost the immune system? Those are the questions that we have to answer.

Right. And any other mechanisms you'd like to highlight for us?

Well, so we have capsid inhibitors. We have a couple of those in our pipeline. Those are exciting because of their potency. You just need to make sure that you're finding ones that are going to be well tolerated, long-acting and have a high barrier to resistance. We also have maturation inhibitor in our pipeline. We are the only company with maturation inhibitors. And we've got one in Phase IIb. And so we hope to share some data on that beginning of next year. And so it's broad; so we've got a lot of options to pair with Cab. And that's -- I mean that's the key piece, is anchor it with an integrase inhibitor because providers trust integrase inhibitors and they have a high barrier to resistance and then bring in the novel mechanism in combination.

And anything you're missing in your pipeline?

Anything we're missing? Well, so I didn't mention the non-nucleoside reverse translocation inhibitor or NRTTI that we have in our pipeline. And that's because, clearly, that particular class has run into a problem with islatravir, with the significant toxicity that we're waiting to see how that plays out. And so that's the other class that we're -- we've got something there. We're just waiting to see if it's something we can use.

Do you have any feel as to why that class is doing what we're seeing?

All we -- all I can say is that we know that the drug concentrates in cells. And so this particular toxicity -- and for those of you who haven't heard, I mean, islatravir was associated with reductions in lymphocytes and particularly CD4 lymphocytes. Well, CD4 lymphocyte increases the hallmark of successful HIV treatment. So having a drug that drops those cells is a problem. Why it's happening, we're waiting on them that tells the mechanism. They're -- I don't know that they know yet. They're still working on it. But the concentration in cells, some people have speculated is a mitochondrial toxicity. All of those things are out there being speculated on. I think we just have to wait and see what they tell us.

Understood. Okay. And then maybe as we sort of get into the last five minutes of this presentation, the reason your business exists is so that in the future, HIV won't exist. Could you just talk about some of your cure efforts? And I think as well as this being an interesting topic in and of its own right, at some point, over the horizon, comes a moment where within the next five years or so, someone will make an announcement that feels very pivotal. And I'm not saying it's necessarily this five year time window that's directly in front of us now but we're always like, cure is very, very far away. So when does that come a little bit closer?

Yes, that's a great question. I think we're all waiting for that breakthrough that makes us believe that we can cure this disease. There are, as you know, a couple of examples of people have been cured but they've gotten bone marrow transplants, stem cell transplants in response to having HIV and leukemia. So nobody has just been given that kind of transplant just to treat their HIV and try to cure it. They've been trying to cure their leukemia and did it in a way that allowed them to cure HIV. You learn from that, right? That is -- that becomes sort of a blueprint for maybe there's a path of how you can cure it.

I think we recognize that HIV hides in the immune system, it goes latent. And so the immune system is not seeing it. And you've got to find a way to make the immune system see the virus and so sort of turn off that latency. So we talk about latency reversing agents. And so we have some of those in our pipeline. And then you're going to need something to clear it once you've gotten that virus out of the reservoir. And so you think about broadly neutralizing antibodies as being potentially good options for doing that. You wake up the virus, have it circulating and now you've come in with a broadly neutralizing antibody to clear it. And so the strategy is out there and it's not just us, all of the -- all of pharma companies that are working in HIV are all working in the cure space and a tremendous number of academic researchers are working on it. I feel like with all the work that's happening, we will get there eventually. But I do still think it's more than five years away. I think it's maybe decades away.

And then even once you get it, is it scalable, right? So I mean, 38 million people in the world living with HIV, how do you get something that can get to all of them? And it would be horrible if we found a cure but it was only developed -- only available to developed countries or to people who can afford it. So I think we're a ways away. The idea of getting to a vaccine is also exciting if we can find a way to train the immune system to control HIV. And there are a number of companies that are working on it. We're looking to potentially get into that space as well.

Perfect. That's all great food for thought. Thank you so much for joining us today. Thanks to everyone who was in the room and online. Please do come and find us if you've got any further questions.

End of Q&A