Growth drivers

On its fourth-quarter earnings conference call, GlaxoSmithKline (GSK) highlighted the prioritization of R&D (research and development) programs, business development, and new product launches as its key growth drivers in 2018. What’s in the cards for the company in 2019?

What Are the Key Growth Drivers for GlaxoSmithKline in 2019?

R&D program prioritization

According to the company’s fourth-quarter earnings conference call, GlaxoSmithKline has either terminated or divested 80 R&D programs to focus its resources on high-potential research opportunities.

Since July 2017, the company has actively targeted the development of oncology assets. It currently has 16 investigational oncology assets in its pipeline and is expecting three pivotal readouts by the end of 2019. According to the company’s fourth-quarter earnings conference call, since the second quarter of 2018, it has secured four oncology assets from its Tesaro acquisition and five from other business development activities, while it’s internally developed three.

Business development

According to GlaxoSmithKline’s fourth-quarter earnings conference call, it’s focused on business development as a strategy to optimize its portfolio.

On July 25, 2018, GlaxoSmithKline issued a press release announcing a four-year collaboration with consumer genetics company 23andMe. The deal is expected to enable GlaxoSmithKline to identify novel drug candidates as well as to derive insights about various diseases.

On December 3, 2018, GlaxoSmithKline issued a press release announcing its acquisition of oncology-focused company Tesaro for a consideration of $5.1 billion. On January 22, 2019, the company announced the completion of this acquisition deal.

On February 5, 2019, GlaxoSmithKline issued a press release announcing its global alliance with Merck KGaA for the co-development and co-commercialization of the M7824 immunotherapy.

Additionally, according to the company’s fourth-quarter earnings conference call, it has divested its health food drinks business to Unilever in certain Asian markets.

To streamline its consumer healthcare business, GlaxoSmithKline first acquired Novartis’s (NVS) stake in their consumer healthcare joint venture in March 2018. Thereafter, in December 2018, the company announced a joint venture with Pfizer (PFE) to create a global consumer healthcare company.

New product launches

GlaxoSmithKline’s recently launched products, such as the Shingrix vaccine for the prevention of shingles in adults 50 years or older and respiratory products such as Trelegy and Nucala, are expected to continue to drive its revenue growth in 2019. According to the company’s fourth-quarter earnings conference call, it also expects to benefit from the uptake of its dolutegravir-based drugs as well as its two-drug regimens in HIV indications.

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