REG - GSK PLC - GSK reaches agreement to acquire BELLUS Health Inc

GSKAnnouncement

18/04/2023 07:00

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RNS Number : 5633W  GSK PLC  18 April 2023

Issued: 18 April 2023, London UK

 

GSK reaches agreement to acquire late-stage biopharmaceutical company BELLUS
Health

 

·   Acquisition further strengthens specialty medicines and respiratory
pipeline with camlipixant, a highly selective P2X3 antagonist and potential
best-in-class treatment for refractory chronic cough

·   Currently in phase III clinical development with anticipated regulatory
approval and launch in 2026

·   Accretive to adjusted EPS from 2027 with significant sales potential
through 2031

 

 

GSK plc (LSE/NYSE: GSK) and BELLUS Health Inc. (TSX/NASDAQ: BLU) today
announced that they have entered into an agreement under which GSK will
acquire BELLUS, a Canada-based, late-stage biopharmaceutical company working
to better the lives of patients suffering from refractory chronic cough (RCC)
for US$14.75 per share of common stock in cash representing an approximate
total equity value of US$2.0 billion (£1.6 billion). The acquisition provides
GSK access to camlipixant, a potential best-in-class and highly selective P2X3
antagonist currently in phase III development for the first-line treatment of
adult patients with RCC.

 

It is estimated that 28 million patients suffer from chronic cough, with 10
million patients globally and 6 million in the United States (US) and European
Union (EU) suffering from RCC for over a year. 1  RCC is defined as a
persistent cough for more than eight weeks that does not respond to treatment
for an underlying condition or is otherwise unexplained. 2  RCC significantly
impacts quality of life, with patients suffering from depression (53%),
urinary incontinence (~50%), pain, rib fractures, social withdrawal, and loss
of sleep. 3 (, 4 )  There are no approved medicines for RCC in the US and EU.

 

P2X3 is a validated biological target implicated in cough reflex
hypersensitisation, and camlipixant is a highly selective P2X3 antagonist.
Current clinical data show that by selectively inhibiting P2X3 receptors,
camlipixant may reduce cough frequency for patients suffering from RCC with a
relatively low incidence of dysgeusia, the taste disturbance adverse event
associated with other medicines that broadly target the P2X2/3
receptor. These taste disturbances frequently lead to patients discontinuing
treatment. Notably, low rates of taste-related adverse events were reported at
all doses in the phase IIb trial (≤6.5%). 5 

 

Luke Miels, Chief Commercial Officer, GSK, said: "Patients suffering from
severe forms of refractory chronic cough can experience over 900 coughs
daily, resulting in quality-of-life issues. Camlipixant, a novel, highly
selective P2X3 antagonist, has the potential to be a best-in-class treatment
with significant sales potential. This proposed acquisition complements our
portfolio of specialty medicines and builds on our expertise in respiratory
therapies."

 

The acquisition of BELLUS is highly synergistic with GSK's expertise in
respiratory medicines and is further supported by GSK's leading R&D,
manufacturing, and commercialisation capabilities.

 

Following the anticipated regulatory approval and launch of camlipixant in
2026, the acquisition is expected to be accretive to adjusted EPS from 2027
and has the potential to deliver significant sales through 2031 and beyond.

 

In December 2021, BELLUS announced positive data from the SOOTHE phase IIb
trial, indicating that it met its primary endpoint for the 50 mg and 200 mg
twice-daily doses. Based on these data, BELLUS initiated the CALM phase III
development programme consisting of the CALM-1 and CALM-2 trials, with data
anticipated in H2 2024 and 2025, respectively. BELLUS is also evaluating a QD
(once-daily) formulation for camlipixant, which is currently in phase I.

 

Roberto Bellini, Chief Executive Officer of BELLUS, said: "This acquisition
recognises the value of our highly selective P2X3 antagonist camlipixant and
validates the hard work and dedication of all the BELLUS employees in
advancing camlipixant to date. 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 and is the ideal Company to rapidly bring
camlipixant to the millions suffering from refractory chronic cough around the
world."

 

The transaction remains subject to regulatory approvals.

 

Financial Considerations

Under the terms of the agreement, the acquisition will be effected through a
Plan of Arrangement pursuant to the Canada Business Corporations Act in which
the shares of BELLUS outstanding will be acquired by the Company in
consideration of US$14.75 per share in cash. Subject to customary conditions,
including court approval, the approval of the acquisition by at least 66.67%
of the votes cast at a meeting of BELLUS' shareholders and a majority of the
votes cast by non-interested shareholders at such meeting, and approval by the
appropriate regulatory agencies, the transaction is expected to close in the
third quarter of 2023 or earlier.

 

The per-share price represents a premium of approximately 103% to BELLUS'
closing stock price on 17 April 2023 and a premium of approximately 101% to
BELLUS' volume-weighted average price (VWAP) over the last 30 trading days.
BELLUS' Board of Directors has unanimously recommended that BELLUS'
shareholders vote in favour of the approval of the acquisition.

 

GSK will account for the transaction as a business combination and expects it
to be accretive to adjusted EPS in 2027, the expected first full year of
camlipixant's sales.

 

There is no change to GSK's full-year 2023 guidance or the medium-term outlook
for 2021-2026 of more than 5% sales and 10% adjusted operating profit CAGR* at
CER**.

 

* CAGR: Compound Annual Growth Rate; **CER: Constant Exchange Rate

 

Advisors

PJT Partners is acting as the exclusive financial advisor to GSK. Paul, Weiss,
Rifkind, Wharton & Garrison LLP, and Stikeman Elliott LLP serve as legal
counsel to GSK in connection with the transaction. Centerview Partners is
acting as the exclusive financial advisor, and Skadden, Arps, Slate, Meagher
& Flom LLP, and Davies Ward Phillips & Vineberg LLP serve as legal
counsel to BELLUS.

 

About BELLUS

BELLUS is a late-stage biopharmaceutical company working to better the lives
of patients suffering from persistent cough.

 

About GSK in respiratory

For over 50 years, GSK has led the way in developing medicines that advance
the management of asthma and COPD, from introducing the world's first
selective short-acting beta agonist in 1969 to launching six treatments in
five years to create today's industry-leading respiratory portfolio.

 

About RCC

RCC is a cough that persists for more than eight weeks despite optimal
treatment of any underlying conditions or where there is no identifiable
underlying cause. 6  Cough hypersensitivity syndrome - excessive coughing,
often in response to relatively innocuous stimuli - is now identified as the
primary pathology in RCC. RCC is a frequent, yet often under-recognised,
medical condition with significant physical, social, and psychological
consequences on a patient's quality of life. Two-thirds of patients are women
averaging between 50-60 years old. 7  There are currently no approved
treatments for this condition in the US or the EU.

About camlipixant

Camlipixant is an investigational, twice-daily oral P2X3 receptor antagonist
for the treatment of RCC, which is currently being evaluated in the CALM phase
III clinical development programme. Given the need for novel and effective
medicines for RCC, camlipixant has the potential to be a breakthrough in the
treatment landscape.

 

Camlipixant is not currently approved anywhere in the world.

 

About GSK

GSK is a global biopharma company with a purpose to unite science, technology,
and talent to get ahead of disease together. Find out more at gsk.com/company
(https://www.gsk.com/en-gb/company/) .

 

 GSK enquiries
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                      Frannie DeFranco   +1 215 751 4855       (Philadelphia)

 

Cautionary statement regarding forward-looking statements relating to BELLUS
Health

This press release may include "forward-looking statements" within the meaning
of the applicable securities laws, including with respect to the timing and
completion of the arrangement, the proposed timing of filings, the impact of
the proposed transaction on BELLUS Heath, and the operations of BELLUS Heath
post-transaction. Each forward-looking statement contained in this press
release is based on the current expectations of management and is subject to
known and unknown risks and uncertainties and other unknown factors that could
cause actual results to differ materially from historical results and those
expressed or implied by such statement. In addition to statements which
explicitly describe such risks and uncertainties, readers are urged to
consider statements labelled with the terms "believes," "belief," "expects,"
"intends," "anticipates," "will," or "plans" to be uncertain and
forward-looking. Such statements include, but are not limited to, the
potential of camlipixant to successfully treat RCC and other
hypersensitization-related disorders, the success of BELLUS Health's
preclinical studies and clinical trials, and the timing and outcome of
anticipated regulatory approvals. Additional risk factors include, but are not
limited to, the impact of general economic conditions, general conditions in
the pharmaceutical industry, the impact of the COVID-19 pandemic, including
impact to the initiation and completion of clinical trials in a timely manner
or at all, changes in the regulatory environment, supply chain impacts,
fluctuations in costs, changes to the competitive environment, reliance on
third parties to conduct preclinical studies and clinical trials for
camlipixant. Furthermore, the risks and uncertainties include, among others,
the risk that a condition to closing of the arrangement may not be satisfied,
the risk that any required shareholder, court or applicable regulatory
approvals for the arrangement may not be obtained or be obtained subject to
conditions that are not anticipated, the failure to realize the anticipated
benefits of the transaction, the occurrence of any event that could give rise
to termination of the transaction, and potential litigation in connection with
the transaction or other settlements or investigations that may affect the
timing or occurrence of the transaction or result in significant costs of
defence, indemnification and liability.

 

BELLUS Heath cautions investors not to rely on the forward-looking statements
contained in this press release when making an investment decision in their
securities. Investors are encouraged to read BELLUS Health's filings available
on the SEC website at www.sec.gov and on the SEDAR website at www.sedar.com,
for a discussion of these and other risks and uncertainties. The
forward-looking statements in this press release speak only as of the date of
this press release and BELLUS Heath undertakes no obligation to update or
revise any of these statements, whether as a result of new information, future
events or otherwise, except as required by law.

 

Cautionary statement regarding forward-looking statements relating to GSK
GSK cautions investors that any forward-looking statements or projections made
by GSK, including those made in this announcement, are subject to risks and
uncertainties that may cause actual results to differ materially from those
projected. Such factors include, but are not limited to, those described under
Item 3.D 'Risk factors" in the company's Annual Report on Form 20-F for 2022,
GSK's Q4 Results for 2022 and any impacts of the COVID-19 pandemic.

 

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 1  Song et al. The global epidemiology of chronic cough in adults: a
systematic review and meta-analysis. Eur Respir J. 2015; 45: 1479-1481.

 2  Meltzer et al. Prevalence and Burden of Chronic Cough in the United
States. J of Allergy Clin Immunol Pract. 2021; 9:4037-44.

 3  Dicpinigaitis et al. Prevalence of Depressive Symptoms Among Patients With
Chronic Cough. CHEST. 2006; 130 (6): 1839 - 43.

 4  Chamberlain et al. The impact of chronic cough: a cross-sectional European
survey. Lung. 2015 Jun;193(3):401-8.

 5  BELLUS Health Inc. Investor Presentation, Dec 2021.

 6  Meltzer et al. Prevalence and Burden of Chronic Cough in the United
States. J of Allergy Clin Immunol Pract. 2021; 9:4037-44.

 7  Morice et al. A worldwide survey of chronic cough: a manifestation of
enhanced somatosensory response. Eur Respir J. 2014 Nov;44(5):1149-55.

 

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