GSK to buy Bellus for US$2 billion to gain cough medicine

GSK agreed to buy Canadian biotech Bellus Health for about US$2 billion to bolster its pipeline of experimental medicines.  

The UK drugmaker will pay US$14.75 per share in cash for Bellus, a 103 per cent premium to the stock’s Monday close, it said in a statement on Tuesday (Apr 18). The deal is expected to yield multi-billion-dollar annual sales in the single digits, Luke Miels, GSK’s chief commercial officer, said on a call with reporters.

The takeover will bring GSK a cough medicine that’s shown promising results in clinical trials and has advanced through much of the research process. GSK has been trying to replenish its product pipeline as the company faces pressure to improve shareholder returns and keep up with UK rival AstraZeneca. 

The announcement comes two days after Merck agreed to buy Prometheus Biosciences for about US$10.8 billion, pointing to a deal resurgence as large drugmakers target biotechs to gain new products to replace ageing best-sellers. 

Adding external deals to supplement internal innovation “is definitely the strategy that we intend to pursue, so you can expect that we will continue to do more deals,” Miels said. 

The drugmaker split from its consumer arm last year, listing that unit separately to focus on the pharma and vaccines business. It’s under pressure to find blockbuster products to offset others going off patent, such as the HIV drug dolutegravir, which will lose its exclusivity towards the end of the decade.

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Bellus’s experimental cough medicine, called camlipixant, will probably launch in 2026 and the transaction should start boosting earnings per share in 2027, according to GSK. 

About 28 million patients worldwide suffer from refractory chronic cough, which camlipixant targets. The disease is marked by a persistent cough that lasts for more than eight weeks, doesn’t respond to treatment for an underlying condition or remains unexplained. 

A typical patient is in the 50s, female and will spend five years going through the health system trying to get appropriate treatment, according to Miels. 

Patients often cough between 500 and 900 times a day, which can lead to social stigma, particularly after the pandemic, and other conditions such as depression.

Bellus’s board has backed the deal and the companies said the transaction will probably close in the third quarter. BLOOMBERG