Dive Brief:
- GSK on Tuesday said it’s agreed to buy Rapt Therapeutics for $2.2 billion, gaining access to a drug that promises to help a wider population of patients avoid allergic reactions to food.
- The medicine, ozureprubart, targets the immunoglobulin E, or IgE antibodies that are produced when a patient’s immune system overreacts after encountering allergens. Once released, the IgE antibodies help trigger allergic reactions that can sometimes be deadly for patients.
- Ozureprubart is currently in Phase 2b testing, and Rapt believes it has the potential to be administered every eight to 12 weeks, instead of the two-to-four week regimens currently used for Roche and Novartis’ Xolair. The company also expects the drug to be used by a bigger pool of patients, including those with high levels of IgE or a body weight that makes them ineligible to take Xolair.
Dive Insight:
The Rapt deal offers the potential of another blockbuster to beef up the British drugmaker’s retrenched pipeline. Former CEO Emma Walmsley, who had run GSK since April 2017, stepped down at the end of last year after streamlining the business and focusing it more on oncology and innovative medicines.
Through much of Walmsley’s tenure, GSK faced pressure from investors who believed that the company was underperforming rivals. Traditionally a powerhouse in vaccines, GSK opted not to develop its own shot during the COVID-19 pandemic and partnerships with other vaccine makers stumbled. Meanwhile, the maker of AZT faced pressure on its pioneering HIV business as patent losses loomed.
The last year, however, saw a turnaround for GSK. The company’s shares have jumped about 42% over the last 12 months in New York trading, far outpacing the 26% climb in the S&P 500 Pharmaceuticals Index. Major drug approvals helped, including wins for a multiple myeloma medicine and a twice-yearly asthma treatment billed as a potential change in standard of care.
And just this month, GSK announced promising results for an experimental hepatitis B treatment. The company’s chief scientific officer, Tony Wood, highlighted that drug recently when he told investors GSK aims to launch 15 medicines with peak sales potential of more than $2 billion each in the coming years.
The Rapt drug fits into that vision for future blockbusters. In the U.S. alone, more than 17 million people suffer from food allergies, causing some 3 million visits to hospitals and emergency care centers. Effective drugs to prevent allergic reactions could compete in a market worth $10 billion or more, Jefferies analyst Michael Leuchten wrote in a note to clients.
Ozureprubart may end up being a “multi-blockbuster opportunity” for food allergy treatment as well as other indications linked to IgE, Leerink Partners analyst Thomas Smith wrote in a separate note. The deal is a “strong strategic fit” for GSK, he added.
For Rapt, the GSK deal caps an unlikely turnaround. The company abandoned its previous lead drug amid safety concerns and later had to cut staff twice. As late as July of last year, Rapt shares were trading below $8. But promising early results for ozureprubart, licensed from China in late 2024, changed its fortunes. On Tuesday, Rapt shares soared close to the GSK offer price of $58.
The companies expect the deal to close in the first quarter of this year.
