Plunging Share of GSK in HIV Business Hit Investors’ Confidence Hard

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GSK, GSK in HIV Business

The recent unexpectedly high loss of market share in the HIV drug business of a British pharmaceutical major has caused investors’ to lose confidence. GlaxoSmithKline (GSK), a prominent drug maker based in London, clocked its losses to be 0.8 percent on July 5, 2017 by the end of 1220 GMT and its shares plummeted to 1.8%.

The loss is driven by a stringent competition due to the expected launch of novel therapies by rival companies and a general slump in demand for its antiretroviral (ARV) medicines used for the treatment of HIV infection.

GSK among Worst Losers in FTSE-100 Index

Citigroup downgraded the GSK’s stock to ‘neutral’ from ‘buy’ category and pared its earnings forecasts by a huge margin of 9%. The company was one of the most hit as marked by the London Stock Exchange’s FTSE-100 index.

GSK’s drug dolutegravir is marketed as medicines Tivicay and Triumeq and has been has been a lucrative business so far for the company. These medicines can be used in combination with other ARV drugs and Triumeq is used in the treatment of HIV-1 infection. The GSK in HIV drug portfolio is headed by its subsidiary ViiV Healthcare and has been growing from strength to strength, after it gained regulatory approval in various nations of North America, Europe, and Asia.

Merck & Co.’s HIV Pill EFdA to Disrupt Competitive Scenario

The company is likely to face stiff competition from Gilead Sciences and Merck & Co., prominent American pharmaceutical players, with their novel HIV drugs in the pipeline. Currently, three-in-one daily pill for HIV treatment is being developed by Gilead Sciences, while Merck & Co. claims to develop a novel HIV drug EFdA. The company hopes to market EFdA as early as 2021 and the therapy can be taken as a daily drug or in the form of a twice-yearly injection.

Citi currently forecasts heavily risk-adjusted peak annual sales of $150 million for EFdA but it believes commercial success could add more than $5 billion to forecasts. Citigroup has currently forecast the pill risk-adjusted annual sales to reach US$150 million. Furthermore, the vast commercial success of the pill is likely to bolster the sales figure, opines market analysts.

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