Targeted business development acquisitions, improvements in R&D and operating performance, and a strengthened post-demerger balance sheet are creating new capacity and flexibility for GSK to invest in growth and innovation for patients and shareholders.
By Andrew Humphreys • email@example.com
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|2021||2020||1H 2022||1H 2021|
|All figures are in millions of dollars except EPS and were translated using the Federal Reserve Board’s average rate of exchange in 2021: £1.3764.|
All sales are in millions of dollars and were translated using the Federal Reserve Board’s average rate of exchange in 2021: £1.3764.
- Triumeq $2,590
- Shingrix $2,369
- Tivicay $1,901
- Advair/Seretide $1,868
- Trelegy Ellipta $1,675
- Nucala $1,572
- Breo/Relvar Ellipta $1,543
- Xevudy $1,319
- Benlysta $1,203
- Dovato $1,083
- Ventolin $988
- Fluarix, FluLaval $935
- Bexsero $895
- Infanrix, Pediarix $747
- Rotarix $745
- Boostrix $717
- Juluca $712
- Anoro Ellipta $694
- Lamictal $658
- Flovent/Flixotide $611
- Augmentin $586 $
- Zejula $544
1H 2022 sales
- Xevudy $2,440
- Shingrix $1,967
- Triumeq $1,174
- Trelegy Ellipta $1,111
- Tivicay $917
- Nucala $911
- Breo/Relvar Ellipta $804
- Dovato $794
- Advair/Seretide $776
- Benlysta $705
- Ventolin $516
- Bexsero $451
- Infanrix, Pediarix $406
- Juluca $392
- Boostrix $391
- Flovent/Flixotide $372
- Augmentin $356
- Lamictal $340
- Rotarix $326
- Zejula $300
- Anoro Ellipta
Outcomes Creativity Index Score: 13
- Manny Awards — N/A
- Cannes Lions — N/A
- Clio Health — N/A
- Creative Floor Awards — 8
- London International Awards – N/A
- MM+M Awards — 5
- One Show — N/A
GSK separated during 2022 to create two new leading companies, both with the opportunity to impact human health at scale and deliver compelling performance for shareholders. The demerger represents the most significant corporate change for GSK during the past 20 years, according to management. Both new companies have clear targets for growth and the ability to positively impact the health and lives of billions of people. Meanwhile, the pharma giant announced the decision to change its name to GSK from GlaxoSmithKline in the company’s April 27, 2022, earnings release, and officially made the change on May 16.
New GSK is uniting science, talent, and technology to “get ahead of disease together.” Following the demerger, GSK is concentrating purely on biopharmaceuticals, prioritizing investment towards the development of innovative vaccines and specialty medicines, maximizing the increasing opportunities to prevent and treat disease. Step-change in growth includes anticipated sales growth of more than 5 percent and adjusted operating profit growth of more than 10 percent on a compound basis 2021-26; research and development concentrated on the science of the immune system, human genetics and advanced technologies; positively impacting the health of more than 2.5 billion people over 10 years; and maintaining a leading environmental, social and governance (ESG) performance.
Haleon will be a worldwide leader 100 percent focused on consumer health. Management said Haleon will have a clear purpose to deliver better everyday health with humanity, and a focused strategy to deliver sustainable above-market growth and attractive returns to shareholders. Strong prospects for growth include an exceptional portfolio of category-leading brands with an attractive global footprint and competitive capabilities; a compelling strategy to outperform in a growing, £150 billion-plus sector that is “more relevant than ever;” 4-6 percent annual organic sales growth in the medium term, sustainable moderate margin expansion and high cash conversion; and an attractive growth profile with the capacity to invest and deliver shareholder returns.
The July 18, 2022, arrival of the Haleon Group marks a new world leader in consumer healthcare with a clear strategy to outperform and run a responsible business, company executives said. According to management, the balance sheet has been strengthened for GSK, through dividend of more than £7 billion from Haleon. American Depositary Shares representing shares of Haleon plc commenced “regular-way” trading on the New York Stock Exchange on July 22.
Financial & product performance
Total turnover for GSK during 2022’s first half reached £14.12 billion ($19.43 billion), representing a year-over-year increase of 28 percent at AER and 25 percent at CER, reflecting strong performance in all three product groups. Commercial Operations turnover, excluding pandemic sales, rose 15 percent at AER and 12 percent at CER.
Specialty Medicines sales for GSK amounted to £5.84 billion ($8.04 billion), up 69 percent at AER and 63 percent at CER compared to first-half 2021, driven by consistent growth in all therapy areas. Specialty Medicines, excluding sales of the COVID-19 treatment Xevudy, reached £4.07 billion ($5.6 billion), rising 18 percent at AER and 14 percent at CER. HIV sales were reported at £2.59 billion ($3.56 billion) with growth of 14 percent at AER and 10 percent at CER.
Oncology sales for first-half 2022 were £281 million ($387 million), up 23 percent at AER, 19 percent at CER.
Immuno-inflammation, Respiratory and Other sales increased 26 percent at AER and 21 percent at CER to £1.2 billion ($1.65 billion).
Vaccines turnover for GSK during the January–June 2022 period amounted to £3.38 billion ($4.66 billion), up 21 percent at AER, 17 percent at CER. Excluding unrepeated 2021 pandemic adjuvant sales, vaccine sales grew 33 percent at AER and 30 percent at CER. This performance reflects a favorable comparator to first-half 2021, which was adversely impacted by COVID-19 related disruptions in several markets, and the strong commercial execution of the shingles vaccination Shingrix, particularly in the United States and Europe.
GSK’s General Medicines sales in the first half of 2022 totaled £4.9 billion ($6.74 billion), up 3 percent at AER and 2 percent at CER, with the impact of generic competition in United States, Europe, and Japan offset by Trelegy growth in respiratory and the post-pandemic rebound of the antibiotic market since H2 2021 in Other General Medicines. General Medicines includes £76 million ($105 million) of turnover between GSK and Haleon recorded in continuing operations with an offsetting amount accounted for in discontinued operations.
Total operating profit for GSK during the 2022 first half was reported at £3.37 billion ($4.64 billion) versus £2.49 billion ($3.42 billion) during H1 2021. GSK said this included the £0.9 billion upfront income received from the settlement with Gilead Sciences and increased profits on turnover growth of 25 percent at CER, partly offset by higher re-measurement charges for contingent consideration liabilities.
Adjusted operating profit was recorded at £3.95 billion ($5.44 billion), marking 33 percent growth at AER and 26 percent at CER over first-half 2021 on a turnover increase of 25 percent at CER. The Adjusted operating margin of 28.0 percent was 1 percentage point higher at AER and stable at CER compared to the reported January-June 2021 period. Management said this primarily reflected the impact from low-margin COVID-19 solutions sales (Xevudy), which reduced adjusted operating profit growth by 2 percent at AER, 1 percent at CER and reduced the adjusted operating margin by 3.3 percentage points at AER and at CER. This was offset by operating leverage from strong sales growth, beneficial mix, and higher royalty income according to GSK.
Total EPS (adjusted to reflect GSK’s share consolidation on July 18, 2022) from continuing operations was 54.8p (75 cents) during H1 2022 versus 50.3p (69 cents) during the one-year-earlier period. This growth primarily reflected the £0.9 billion upfront income received from the Gilead settlement and increased profits on turnover growth of 25 percent at CER, partly offset by higher re-measurement charges for contingent consideration liabilities as well as an unfavorable comparison due to a credit of £325 million to taxation in Q2 2021.
Following completion of the Consumer Healthcare business demerger on July 18, GSK plc Ordinary shares were consolidated in order to maintain share price comparability before and after the demerger. GSK plc shareholders received 4 new ordinary shares for every 5 existing ordinary shares. GSK reported that earnings per share, diluted EPS, adjusted EPS and dividends per share have been retrospectively adjusted to reflect the share consolidation in all the periods presented.
Adjusted EPS was 67.0p (92 cents) versus 49.3p (68 cents) in H1 2021, an increase of 36 percent at AER and 27 percent at CER, on a 26 percent CER rise in adjusted operating profit. The results included higher COVID-19 solutions sales at low margin with the reduction to growth from COVID-19 solutions being 2 percent at AER and 2 percent at CER. Leverage from growth in sales of Specialty Medicines, beneficial mix, higher royalty income and a lower effective tax rate was partly offset by higher supply chain, freight and distribution costs, lower associate income and higher non-controlling interests.
Cash generated from operations attributable to continuing operations for the first six months of 2022 was £3.94 billion ($5.42 billion) compared to the H1 2021 amount of £1.76 billion ($2.42 billion). The growth primarily reflected a significant increase in operating profit including the upfront income from the Gilead settlement, favorable exchange and favorable timing of collections and profit share payments for Xevudy sales, partly offset by increased contingent consideration payments reflecting the Gilead deal and a higher seasonal increase in inventory.
GSK CEO Emma Walmsley stated, “This is GSK’s first set of results as a newly focused biopharma company, and we have delivered an excellent second-quarter performance, with strong growth in Specialty Medicines, including HIV, and a record quarter for our shingles vaccine Shingrix. With this momentum in sales and operating profit growth, we have raised our full-year guidance and are confident in delivering the long-term growth outlooks we set out for shareholders last year. We continue to strengthen our pipeline, notably with very positive high-level results from our late-stage RSV vaccine candidate, together with targeted business development acquisitions of Sierra Oncology and Affinivax. These improvements in R&D and operating performance, together with a strengthened post-demerger balance sheet, create new capacity and flexibility for GSK to invest in growth and innovation for patients and shareholders.”
According to GSK management, “With the momentum from the business performance to date (through Q2 2022), GSK now expects 2022 sales to increase between 6 to 8 percent and adjusted operating profit to increase between 13 to 15 percent, excluding any contributions from COVID-19 solutions. Adjusted earnings per share is expected to grow around 1 percent lower than operating profit. We have delivered first-half performance ahead of our full-year guidance, slightly better than expected, informed by strong business delivery and the dynamics of prior year comparators.”
According to company management, “Predominantly reflecting a more challenging H2 2021 sales comparator as well as an expected increase in R&D spend, we expect lower reported growth in the second half. Key external factors that will influence the second half of 2022 include the continued risk from COVID-19 dynamics and possible developments in the current uncertain global economic environment.”
GSK is collaborating with companies and research groups around the globe to work on promising COVID-19 vaccine candidates through the use of GSK’s innovative vaccine adjuvant technology. GSK said the use of an adjuvant is of particular significance in a pandemic situation since it may reduce the amount of vaccine protein required per dose, enabling more vaccine doses to be produced and therefore contributing to protecting more people.
According to management, GSK’s response to COVID-19 has been one of the broadest in the industry, with potential treatments in addition to the company’s vaccine candidates in development with partner organizations. GSK has been working with Sanofi, Medicago, and SK bioscience to develop adjuvanted, protein-based vaccines.
GSK and Sanofi revealed positive data in June 2022 from the companies’ vaccine study, which assessed an adjuvanted bivalent D614 and Beta (B.1.351) vaccine candidate. Sanofi-GSK’s vaccine is the first candidate to show efficacy in a placebo-controlled study in an environment of high Omicron variant circulation. The vaccine candidate demonstrated a favorable safety and tolerability profile.
Additionally reported in June, Sanofi unveiled positive data from two trials conducted with the company’s new next-generation COVID-19 booster vaccine candidate modeled on the Beta variant antigen and including GSK’s pandemic adjuvant. Taken together, management said these data strongly indicate the potential of Sanofi-GSK’s next-generation Beta-based booster to be a relevant response to public health needs.
GSK Vaccines President Roger Connor stated, “These positive data show efficacy of our protein-based, bivalent adjuvanted vaccine candidate in an environment of high Omicron variant circulation. Our vaccine candidate has the potential to make an important contribution to public health as the pandemic evolves further. We are looking forward to the discussions with regulatory authorities with the aim of making our vaccine candidate available later this year.”
GSK said these efforts are supported by federal funds from the Biomedical Advanced Research and Development Authority, part of the office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services in collaboration with the U.S. Department of Defense Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense under Contract # W15QKN-16-9-1002 and by the National Institute of Allergy and Infectious Diseases.
Health Canada during February 2022 granted approval for the Medicago COVID-19 vaccine Covifenz (plant-based virus-like particles [VLP], recombinant, adjuvanted). Covifenz is indicated for active immunization to prevent coronavirus disease 2019 caused by severe acute respiratory syndrome coronavirus 2 (SARS‑CoV‑2) in individuals 18 to 64 years of age.
“This first approval is an important milestone in our approach of pairing GSK’s well-established pandemic adjuvant with promising antigens to develop protein-based, refrigerator-stable COVID-19 vaccines to help protect people against COVID-19 disease,” Connor noted. “We look forward to working with Medicago to make the vaccine available in Canada and to progress further regulatory submissions.”
SK bioscience and GSK announced during April 2022 the filing of a biologics license application for SKYCovione, a recombinant protein-based COVID-19 vaccine candidate adjuvanted with GSK’s pandemic adjuvant, to the Korean Ministry of Food and Drug Safety (KMFDS) following positive Phase III data. The self-assembled nanoparticle vaccine candidate targets the receptor binding domain of the SARS-CoV-2 Spike protein for the parental SARS-Cov-2.
SKYCovione is jointly developed with the Institute for Protein Design (IPD) at the University of Washington School of Medicine with combination of GSK’s pandemic adjuvant. The development of the vaccine has been supported by funding from the Coalition for Epidemic Preparedness Innovations (CEPI).
GSK is exploring treatments for COVID-19 patients, collaborating with Vir Biotechnology to evaluate monoclonal antibodies that could be used as therapeutic or preventive options for COVID-19.
GSK and Vir Biotechnology announced in January 2022 a U.S. government deal to purchase additional supply of sotrovimab, authorized for the early treatment of COVID-19. The 600,000 additional doses were supplied to the U.S. government for distribution in first-quarter 2022, allowing additional access to sotrovimab nationwide. The agreement brought the total amount of doses secured through binding agreements to 1.7 million worldwide as of January 2022. The deal included the option for the U.S. government to buy further additional doses during Q2 2022.
The investigational single-dose intravenous (IV) infusion SARS-CoV-2 monoclonal antibody sotrovimab was granted Emergency Use Authorization (EUA) by the FDA during May 2021. Under the EUA, sotrovimab can be used for treating mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg) with positive results of direct SARS-CoV-2 viral testing, and who are at high risk for progression to severe COVID-19, including hospitalization or death.
GSK and Vir anticipated manufacturing 2 million doses worldwide in the 2022 first half and additional doses during the second half of the year.
The European Commission (EC) issued a marketing authorization to Xevudy (sotrovimab) for the early treatment of COVID-19 in December 2021. Sotrovimab is approved in the EU for treating adults and adolescents (aged 12 years and over and weighing at least 40 kg) with COVID-19 who do not require supplemental oxygen and who are at increased risk of progressing to severe COVID-19. Sotrovimab, which incorporates Xencor’s Xtend technology, has been designed to achieve high concentration in the lungs to ensure optimal penetration into airway tissues affected by SARS-CoV-2 and to have an extended half-life.
GSK is additionally working with mRNA specialist CureVac to jointly develop next-generation, optimized mRNA vaccines for COVID-19 with the potential to address multiple emerging variants within one vaccine.
Deals, Collaborations & Partnerships
GSK completed the acquisition of Affinivax during mid-August 2022. A clinical-stage biopharmaceutical company based in Cambridge, Mass., Affinivax has pioneered the development of a novel class of vaccines, the most advanced of which are next-generation pneumococcal vaccines.
Management stated that the acquisition of Affinivax aligns with GSK’s strategy of building a strong portfolio of specialty medicines and vaccines. The acquisition includes the next-generation 24-valent pneumococcal vaccine candidate AFX3772, which is based on the highly innovative Multiple Antigen Presenting System (MAPS) platform technology. A 30-plus valent pneumococcal candidate vaccine is additionally in preclinical development.
The MAPS technology supports higher valency than conventional conjugation technologies, potentially allowing for broader coverage against prevalent pneumococcal serotypes and generating higher antibody responses against many individual serotypes than existing pneumococcal vaccines.
In adult Phase I/II studies, AFX3772 was well tolerated in participants and showed good immune responses versus the current standard of care. The FDA during July 2021 granted Breakthrough Therapy designation for AFX3772 to prevent S. pneumoniae invasive disease and pneumonia in adults 50 years and older. As of August 2022, preparations for the beginning of the Phase III program were under way. Phase II trials began in June 2022 to evaluate the use of the vaccine in the pediatric population.
GSK obtained 100 percent of the outstanding shares of Affinivax. An upfront payment of $2.1 billion was paid upon closing and two potential milestone payments of $0.6 billion are to be paid upon the achievement of certain pediatric clinical development milestones. GSK accounted for the transaction as a business combination.
According to GSK Chief Scientific Officer Tony Wood, “Affinivax’s exciting pneumococcal vaccine candidates, the potentially disruptive MAPs technology and their fantastic scientific talent, further strengthen our pipeline of novel vaccines and presence in the Boston area.”
The acquisition of Sierra Oncology was completed on July 1, 2022. The California-based biopharmaceutical company has concentrated on targeted therapies for treating rare forms of cancer.
With the acquisition came the late-stage potential new medicine momelotinib, which has a unique dual mechanism of action that may address the critical unmet medical needs of myelofibrosis patients with anemia. According to management, momelotinib complements GSK’s Blenrep (belantamab mafodotin). The transaction builds on GSK’s expertise in hematology and aligns with the company’s strategy of building a strong portfolio of specialty medicines and vaccines.
Sierra Oncology submitted a New Drug Application for momelotinib to the FDA in June 2022, and GSK anticipated a regulatory filing in Europe during second-half 2022. If cleared for marketing, momelotinib will contribute to GSK’s growing specialty medicines business, with a U.S. launch anticipated during 2023.
GSK acquired all outstanding shares of Sierra Oncology for $55 per share in cash, representing a total equity value of $1.9 billion (£1.6 billion at current exchange rates). The per-share price represented a premium of 39 percent to Sierra Oncology’s closing stock price on April 12, 2022, and 63 percent to Sierra’s volume-weighted average price (VWAP) during the previous 30 trading days before the acquisition closed.
GSK inked an exclusive license deal in September 2022 for tebipenem pivoxil hydrobromide (tebipenem HBr). The late-stage antibiotic is being developed by Spero Therapeutics as the first oral carbapenem antibiotic to potentially treat complicated urinary tract infections (cUTI), including pyelonephritis, resulting from certain bacteria. Spero will begin a new Phase III clinical study during 2023.
The exclusive license enables GSK to commercialize tebipenem HBr in all regions except for Japan and certain other Asian countries. Spero Therapeutics received $66 million upfront, with the potential for future milestone payments and tiered royalties. GSK will purchase $9 million in shares of Spero common stock.
ViiV Healthcare, the worldwide specialist HIV company majority owned by GSK, with Pfizer and Shionogi as shareholders, and the Medicines Patent Pool (MPP) signed a new voluntary licensing pact in July 2022. The agreement pertains to patents relating to cabotegravir long-acting (LA) for HIV pre-exposure prophylaxis (PrEP) to help enable access in least developed, low-income, lower middle
-income and Sub-Saharan African countries.
Certain generic manufacturers will have the opportunity to develop, manufacture, and supply generic versions of cabotegravir LA for PrEP, the first long-acting HIV prevention product, in 90 countries, subject to required regulatory approvals being obtained. This agreement is anticipated to help to enable at-scale access to generic cabotegravir LA for PrEP. This announcement was made seven months after the first regulatory approval of cabotegravir LA for PrEP in the world, by the FDA, under the trade name Apretude.
A framework contract was signed during July 2022 by GSK with the European Commission’s (EC) Health Emergency Preparedness and Response Authority (HERA) for the reservation of future production and supply of 85 million doses of the company’s pandemic influenza vaccine Adjupanrix [pandemic influenza vaccine (split virion, inactivated, adjuvanted)].
This is one of the first contracts signed by HERA since being established during September 2021. HERA’s core mission is to prevent, detect, and rapidly respond to health emergencies by working closely with other EC and national health agencies, industry and international partners to improve Europe’s readiness for health emergencies.
GSK and the University of Oxford launched the Oxford-GSK Institute during December 2021 to harness advanced technology and unravel mechanisms of disease. According to GSK, the major new collaboration aims to deepen understanding of complex diseases such as Alzheimer’s and Parkinson’s, and increase drug discovery and development success rates. The institute is based at Oxford’s Nuffield Department of Medicine.
With a £30 million investment from GSK, the institute is intended to pioneer further improvements in how new medicines are discovered and developed. The institute will assess and integrate new approaches in genetics, proteomics and digital pathology to understand detailed patterns of disease that vary amongst individuals. The initial research focus will be on neurological diseases, including Alzheimer’s and Parkinson’s disease.
Product Approvals & pipeline updates
ViiV’s Apretude (cabotegravir extended-release injectable suspension) was the recipient of FDA approval in December 2021 as the first long-acting injectable option for HIV prevention. The medicine was approved for use in adults and adolescents weighing at least 35 kg who are at risk of sexually acquiring HIV, including men who have sex with men as well as women and transgender women who have sex with men. Apretude is given as few as six times annually and has demonstrated superior efficacy to a daily oral PrEP option (FTC/TDF tablets) in reducing the risk of HIV acquisition.
Apretude represents the first long-acting injectable pre-exposure prophylaxis (PrEP) option proven superior to daily oral FTC/TDF in reducing HIV acquisition. The product is indicated for HIV PrEP in adults and adolescents at risk of sexually acquiring HIV, weighing at least 35 kg, who have a negative HIV-1 test prior to initiation. The integrase strand transfer inhibitor (INSTI) is administered as a single 600 mg (3-ml) intramuscular (IM) injection of cabotegravir in the buttocks by a healthcare provider every two months after two initiation injections administered one month apart and an optional oral lead-in to assess tolerability.
Triumeq PD won U.S. marketing clearance in late March 2022 as the first dispersible single-tablet regimen containing dolutegravir, a once-daily treatment for children living with HIV. The NDA was approved for a dispersible tablet formulation of the fixed-dose combo of abacavir, dolutegravir and lamivudine for treating pediatric patients weighing 10 kgs to <25 kgs with human immunodeficiency virus type 1 (HIV-1). Also, a supplemental New Drug Application (sNDA) was approved for Triumeq tablet, lowering the minimum weight that a child with HIV-1 can be prescribed this medicine to 25 kgs from 40 kgs.
GSK announced a settlement between ViiV and Gilead in February 2022, resolving global litigation relating to Biktarvy and ViiV’s dolutegravir patents and entry into a patent license deal. Gilead made an upfront payment of $1.25 billion to ViiV during first-quarter 2022. Gilead is also responsible for paying a 3 percent royalty on future U.S. sales of the blockbuster medicine Biktarvy, a triple-combination HIV product containing the HIV integrase inhibitor bictegravir, tenofovir alafenamide and emtricitabine.
ViiV, GSK and Shionogi alleged that Biktarvy infringed certain of their patents relating to dolutegravir. As a result of the settlement deal, patent infringement cases in the United States, UK, France, Ireland, Germany, Japan, Korea, Australia, and Canada were discontinued.
A label update for Cabenuva (cabotegravir and rilpivirine) was cleared by U.S. regulators in March 2022, making the oral lead-in with cabotegravir and rilpivirine tablets optional. Oral cabotegravir and rilpivirine can be taken for a month to evaluate tolerability to the medicines before initiating cabotegravir and rilpivirine injections, a regimen jointly developed as part of a collaboration with Janssen, but this oral lead-in is now optional after clinical study data showed similar safety and efficacy profiles for both initiation methods (with or without the oral lead-in).
Cabenuva is the first complete long-acting HIV treatment regimen and is marketed in the United States as a once-monthly
or every-two-month treatment for HIV-1 in virologically suppressed adults. The medicine contains ViiV’s cabotegravir extended-release injectable suspension in a single-dose vial and rilpivirine extended-release injectable suspension in a single-dose vial, a product of Janssen Sciences Ireland Unlimited Company, one of the Janssen Pharmaceutical Companies of Johnson & Johnson.
During January 2022, the FDA approved Cabenuva for every-
two-month dosing for treating HIV-1 in virologically suppressed adults (HIV-1 RNA less than 50 copies per milliliter [c/ml]) on a stable regimen, with no history of treatment failure, and with no known or suspected resistance to either cabotegravir or rilpivirine.
Priorix (Measles, Mumps and Rubella Vaccine, Live) was the recipient of FDA approval during June 2022 for active immunization for the prevention of measles, mumps and rubella (MMR) in individuals 12 months of age and older. The vaccine is licensed in more than 100 countries, including all European countries, Canada, Australia, and New Zealand, with more than 800 million doses distributed.
The oral hypoxia-inducible factor prolyl hydroxylase inhibitor (HIF-PHI) daprodustat is undergoing regulatory review for the potential treatment of anemia due to chronic kidney disease (CKD) in adult patients on dialysis and not on dialysis. The U.S. FDA’s Cardiovascular and Renal Drugs Advisory Committee was scheduled to review the New Drug Application (NDA) on Oct. 26, 2022.
The daprodustat NDA is based on positive results from the ASCEND Phase III study program, which included five pivotal trials evaluating the efficacy and safety of daprodustat for treating anemia across the spectrum of CKD. Results from the key cardiovascular outcomes trials were published in the New England Journal of Medicine during November 2021 and included non-dialysis (ASCEND-ND) and dialysis (ASCEND-D) CKD patients. These studies showed that daprodustat improved and/or maintained hemoglobin (Hb) within the target level (10-11.5 g/dL), and the primary safety analysis of the intention-to-treat (ITT) populations demonstrated that daprodustat achieved non-inferiority of MACE (major adverse cardiovascular events) versus the standard of care, an erythropoietin stimulating agent (ESA), across non-dialysis and dialysis patient settings.
Daprodustat tablet was approved under the brand name Duvroq during June 2020 by Japan’s Ministry of Health, Labour and Welfare for patients with renal anemia. The European Medicines Agency during March 2022 validated the marketing authorization application for daprodustat, which is undergoing regulatory review. Other regulatory filings were anticipated to continue throughout 2022.
According to GSK, daprodustat was developed based upon the unique Nobel Prize-winning science that showed how cells sense and adapt to oxygen availability.
GSK unveiled long-term data from the Phase III PRIMA (ENGOT-OV26/GOG-3012) trial demonstrating Zejula (niraparib) maintained a sustained and clinically meaningful progression-free survival (PFS) benefit as a maintenance therapy in patients with first-line ovarian cancer following a response to platinum-based chemotherapy. Importantly, this benefit was sustained across all biomarker subgroups according to GSK, including BRCAm, HRd and HRp.
Zejula represents the only once-daily oral monotherapy maintenance treatment approved in the United States and the European Union for patients with first-line platinum-responsive advanced ovarian cancer regardless of biomarker status.
The poly (ADP-ribose) polymerase (PARP) inhibitor niraparib is being investigated in multiple pivotal studies. GSK said the company is building a robust niraparib clinical development program by evaluating activity across multiple tumor types and by assessing several potential combinations of niraparib with other therapeutics. The development program includes several combination studies.
The FDA’s Oncologic Drugs Advisory Committee (ODAC) was scheduled to discuss overall survival (OS) data from the ENGOT-OV16/NOVA Phase III study for Zejula on November 22, 2022. NOVA is a randomized, double-blind, placebo-controlled Phase III study of Zejula for the maintenance treatment of women with platinum-
sensitive recurrent ovarian cancer.
The FDA accepted the NDA in August 2022 for momelotinib, a potential new medicine with a proposed differentiated mechanism of action that may address the significant unmet medical needs of myelofibrosis patients with anemia. The FDA has set a Prescription Drug User Fee Act action date of June 16, 2023. The NDA is based on the results from key Phase III studies, including the pivotal MOMENTUM trial, which met every primary and key secondary endpoint, including Total Symptom Score (TSS), Transfusion Independence (TI) rate and Splenic Response Rate (SRR).
Momelotinib was not approved in any market as of September 2022. Momelotinib has inhibitory ability along three key signaling pathways: Janus kinase (JAK) 1, and JAK2 and activin A receptor, type I (ACVR1). According to research, inhibition of JAK1 and JAK2 may improve constitutional symptoms and splenomegaly. Also, direct inhibition of ACVR1 leads to a decrease in circulating hepcidin, which is elevated in myelofibrosis and contributes to anemia.
Promising Phase IIb interim data were presented by GSK during June 2022 for bepirovirsen, a potential new treatment for chronic hepatitis B. Interim analysis from the B-Clear Phase IIb study demonstrates bepirovirsen’s potential to suppress both the surface antigen and the virus of hepatitis B, resulting in the possibility of functional cure.
The investigational antisense oligonucleotide (ASO) bepirovirsen (product code GSK3228836) is designed to specifically recognize the RNA that the hepatitis B virus uses to replicate itself in infected liver cells (hepatocytes) and make the viral antigens (proteins) which facilitate chronicity of the disease by helping to avoid clearance by the immune system.
Previously known as ISIS 505358 or IONIS-HBVRX, the potential new drug candidate was discovered by and jointly developed with Ionis Pharmaceuticals. Bepirovirsen is one of the ASO HBV program assets in-licensed by GSK from Ionis during August 2019.
GSK said a Phase III monotherapy study for bepirovirsen is anticipated to begin during first-half 2023. The company is exploring potential combination treatments to reduce the global burden of chronic hepatitis B. The clinical trials include a Phase IIb study of bepirovirsen in sequential combination with pegylated interferon treatment and a Phase II trial of bepirovirsen in combination with the company’s chronic hepatitis B targeted immunotherapy.
The World Health Organization (WHO) during September 2022 awarded prequalification to GSK’s groundbreaking malaria vaccine Mosquirix (also known as RTS,S/AS01). The company said this is the first prequalification for a malaria vaccine and is a significant step in rolling out the vaccine in countries with moderate-to -high malaria transmission.
Positive headline results were reported by the company during June 2022 from a pre-specified efficacy interim analysis of the AReSVi 006 Phase III study. The interim analysis was reviewed by an Independent Data Monitoring Committee, and the primary endpoint was exceeded with no unexpected safety concerns observed, according to GSK. The AReSVi 006 study is testing GSK’s respiratory syncytial virus (RSV) vaccine candidate for adults aged 60 years and older.
This marks the first RSV vaccine candidate to demonstrate statistically significant and clinically meaningful efficacy in adults aged 60 years and older. According to GSK, the magnitude of effect observed was consistent across RSV A and B strains, key secondary endpoints and in those aged 70 years and older. As a result, anticipated regulatory filings were expected during first-half 2022.
GSK announced that, further to the voluntary pause shared on February 18, 2022, the company decided to halt enrollment and vaccination in studies assessing the potential RSV maternal vaccine candidate in pregnant women (NCT04605159, NCT04980391, NCT05229068). This decision does not impact the AReSVi 006 study.
Approval in Japan was granted in late May 2022 for Vocabria (cabotegravir injection and tablets), used in combination with Janssen’s Rekambys (rilpivirine long-acting injectable suspension) and Edurant (rilpivirine tablets), as the first complete long-acting treatment for HIV. The approval was granted by Japan’s Ministry of Health, Labour and Welfare (MHLW). Cabotegravir injection used in combination with rilpivirine long-acting is indicated for the treatment of human immunodeficiency virus type 1 (HIV-1) infection in adults who are virologically suppressed, on a stable regimen with no history of treatment failure and with no known or suspected resistance to either cabotegravir or rilpivirine. The long-acting treatment allows people living with HIV to reduce the days they receive treatment from 365 to 12 or 6 per year after initiation.
The integrase strand transfer inhibitor (INSTI) cabotegravir is developed by ViiV Healthcare for treating HIV-1 in virologically suppressed adults. Cabotegravir is approved as a long-acting formulation in combination with injectable rilpivirine.
MHLW during June 2022 accepted the regulatory filing of Shingrix (Zoster Vaccine Recombinant, Adjuvanted) to prevent shingles in at-risk adults aged 18 years and older. Administered intramuscularly in two doses, the non-live, recombinant sub-unit adjuvanted vaccine was originally approved in Japan during March 2018 for adults aged 50 years and older.
The European Commission and the United Kingdom approved Shingrix on August 25, 2020, to prevent shingles and post-herpetic neuralgia (PHN) in adults aged 18 or older at increased risk of shingles. The FDA approved the vaccine on July 26, 2021, to prevent shingles in adults aged 18 years or older at increased risk of shingles due to immunodeficiency or immunosuppression caused by known disease or therapy. The extended indication for preventing shingles and PHN in adults aged 18 years or older at increased risk of developing shingles has additionally been approved in Australia.
Shingrix is recommended in the United States by the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices as the preferred vaccine for the prevention of shingles and related complications for immunocompetent adults aged 50 years and older.
In China, a two-dose schedule for GSK’s HPV vaccine Cervarix [Human Papillomavirus bivalent (types 16, 18) Vaccine, Recombinant)] was approved by the National Medical Products Administration (NMPA) for girls aged 9 to 14 years. With this marketing clearance, Cervarix is the first imported two-dose HPV vaccine for this age group in mainland China. The NMPA authorization of the two-dose regimen adds China to two-dose approvals in 100 countries, including the EU, Asia, Africa, and Latin America. GSK said the three-dose schedule remains on the label for girls and women aged 15–45 years in China.
China’s NMPA approved Benlysta (belimumab) during February 2022 for adults with active lupus nephritis. Benlysta is the first biologic approved in China for both systemic lupus erythematosus and lupus nephritis. The B-lymphocyte stimulator (BLyS) specific inhibitor Benlysta is a human monoclonal antibody that binds to soluble BLyS. By binding BLyS, belimumab inhibits the survival of B cells and reduces the differentiation of B cells into immunoglobulin-producing plasma cells.
During the second half of 2022, Phase III data readouts were anticipated for the pentavalent (MenABCWY) meningitis vaccine candidate, otilimab in rheumatoid arthritis, Jemperli in first-line endometrial cancer, and Blenrep in third-line multiple myeloma.
An investment of £1 billion over 10 years was announced by GSK during June 2022 to accelerate research and development dedicated to infectious diseases that disproportionately impact lower-income countries. This research will concentrate on new and disruptive vaccines and medicines to prevent and treat malaria, tuberculosis, HIV (through ViiV Healthcare), neglected tropical diseases, and anti-microbial resistance, which continue to have a devastating toll on the most vulnerable, accounting for more than 60 percent of the disease burden in many lower-income countries.
GSK Global Health R&D hubs are advancing more than 30 potential new vaccines and medicines, targeting 13 high-burden infectious diseases. The company will maintain donations of albendazole until the elimination of lymphatic filariasis, and will double production of GSK’s adjuvant for use in the RTS,S malaria vaccine. The new commitments support management’s ambition to positively impact the health of more than 2.5 billion people during the next 10 years.federal reserve pandemic coronavirus covid-19 disease control emergency use authorization vaccine treatment testing fda clinical trials preclinical antibodies therapy monoclonal antibodies rna transmission recovery africa japan canada european europe uk france germany eu china world health organization
EY Eyes Comeback for Biopharma M&A
EY noted that the total value of biopharma M&A in 2022 was $88 billion, down 15% from $104 billion in 2021. The $88 billion accounted for most of the…
A recent trickle of mergers and acquisitions (M&A) announcements in the billion-dollar-and-up range suggests that biopharma may be ready to resume dealmaking this year—although the value and number of deals isn’t expected to return to the highs seen just before the pandemic.
2022 ended with a handful of 10- and 11-figure M&A deals, led by Amgen’s $27.8 billion buyout of Horizon Therapeutics, announced December 13. The dealmaking continued into January with three buyouts announced on the first day of the recent J.P. Morgan Healthcare Conference: AstraZeneca agreed to acquire CinCor Pharma for up to $1.8 billion, while Chiesi Farmaceutici agreed to shell out up to $1.48 billion cash for Amryt, and Ipsen Group said it will purchase Albireo Pharma for $952 million-plus.
EY—the professional services firm originally known as Ernst & Young—recently noted that the total value of biopharma M&A in 2022 was $88 billion, down 15% from $104 billion in 2021 [See Chart]. The $88 billion accounted for most of the $135 billion in 124 deals in the life sciences. That $135 billion figure is less than half the record-high $313 billion recorded in 2019, including $261 billion in 70 biopharma deals.
The number of biopharma deals fell 17% to 75 deals from 90. EY’s numbers include only deals greater than $100 million. The other 49 deals totaling $47 million consisted of transactions in “medtech,” which includes diagnostics developers and companies specializing in “virtual health” such as telemedicine.
“We expect this to be a more active year as the sentiment starts to normalize a little bit,” Subin Baral, EY Global Life Sciences Deals Leader, told GEN Edge.
Baral is not alone in foreseeing a comeback for biopharma M&A.
John Newman, PhD, an analyst with Canaccord Genuity, predicted last week in a research note that biopharma companies will pursue a growing number of smaller cash deals in the range of $1 billion to $10 billion this year. He said rising interest rates are discouraging companies from taking on larger blockbuster deals that require buyers to take on larger sums of debt.
“We look for narrowing credit spreads and lower interest rates to encourage larger M&A ($50 billion and more) deals. We do not anticipate many $50B+ deals that could move the XBI +5%,” Newman said. (XBI is the SPDR S&P Biotech Electronic Transfer Fund, one of several large ETFs whose fluctuations reflect investor enthusiasm for biopharma stock.)
Newman added: “We continue to expect a biotech swell in 2023 that may become an M&A wave if credit conditions improve.”
Foreseeing larger deals than Newman and Canaccord Genuity is PwC, which in a commentary this month predicted: “Biotech deals in the $5–15 billion range will be prevalent and will require a different set of strategies and market-leading capabilities across the M&A cycle.”
Those capabilities include leadership within a specific therapeutic category, for which companies will have to buy and sell assets: “Prepared management teams that divest businesses that are subscale while doubling down on areas where leadership position and the right to win is tangible, may be positioned to deliver superior returns,” Glenn Hunzinger, PwC’s U.S. Pharma & Life Science Leader, and colleagues asserted.
The Right deals
Rising interest and narrowing credit partially explain the drop-off in deals during 2022, EY’s Baral said. Another reason was sellers adjusting to the drop in deal valuations that resulted from the decline of the markets which started late in 2021.
“It took a little bit longer to realize the reality of the market conditions on the seller side. But on the buyer side, the deals that they were looking at were not just simply a valuation issue. They were looking at the quality of the assets. And you can see that the quality deals—the right deals, as we call them—are still getting done,” Baral said.
The right deals, according to Baral, are those in which buyers have found takeover targets with a strong, credible management team, solid clinical data, and a clear therapeutic focus.
“Rare disease and oncology assets are still dominating the deal making, particularly oncology because your addressable market continues to grow,” Baral said. “Unfortunately, what that means is the patient population is growing too, so there’s this increased unmet need for that portfolio of assets.”
Several of 2022’s largest M&A deals fit into that “right” category, Baral said—including Amgen-Horizon, Pfizer’s $11.6-billion purchase of Biohaven Pharmaceuticals and the $6.7-billion purchase of Arena Pharmaceuticals (completed in March 2022); and Bristol-Myers Squibb’s $4.1-billion buyout of Turning Point Therapeutics.
“Quality companies are still getting funded one way or the other. So, while the valuation dropped, people were all expecting a flurry of deals because they are still companies with a shorter runway of cash that will be running to do deals. But that really didn’t happen from a buyer perspective,” Baral said. “The market moved a little bit from what was a seller’s market for a long time, to what we would like to think of as the pendulum swinging towards a buyers’ market.”
Most biopharma M&A deals, he said, will be “bolt-on” acquisitions in which a buyer aims to fill a gap in its clinical pipeline or portfolio of marketed drugs through purchases that account for less than 25% of a buyer’s market capitalization.
Baral noted that a growing number of biopharma buyers are acquiring companies with which they have partnered for several years on drug discovery and/or development collaborations. Pfizer acquired BioHaven six months after agreeing to pay the company up to $1.24 billion to commercialize rimegepant outside the U.S., where the migraine drug is marketed as Nurtec® ODT.
“There were already some kind of relationships there before these deals actually happened. But that also gives an indication that there are some insights to these targets ahead of time for these companies to feel increasingly comfortable, and pay the valuation that they’re paying for them,” Baral said.
$1.4 Trillion available
Baral sees several reasons for increased M&A activity in 2023. First, the 25 biopharma giants analyzed by EY had $1.427 trillion available as of November 30, 2022, for M&A in “firepower”—which EY defines as a company’s capacity to carry out M&A deals based on the strength of its balance sheet, specifically the amount of capital available for M&A deals from sources that include cash and equivalents, existing debt, and market cap.
That firepower is up 11% from 2021, and surpasses the previous record of $1.22 trillion in 2014, the first year that EY measured the available M&A capital of large biopharmas.
Unlike recent years, Baral said, biopharma giants are more likely to deploy that capital on M&A this year to close the “growth gap” expected to occur over the next five years as numerous blockbuster drugs lose patent exclusivity and face new competition from lower-cost generic drugs and biosimilars.
“There is not enough R&D in their pipeline to replenish a lot of their revenue. And this growth gap is coming between 2024 and 2026. So, they don’t have a long runway to watch and stay on the sidelines,” Baral said.
This explains buyers’ interest in replenishing pipelines with new and innovative treatments from smaller biopharmas, he continued. Many smaller biopharmas are open to being acquired because declining valuations and limited cash runways have increased investor pressure on them to exit via M&A. The decline of the capital markets has touched off dramatic slowdowns in two avenues through which biopharmas have gone public in recent years—initial public offerings (IPOs) and special purpose acquisition companies (SPACs).
EY recorded just 17 IPOs being priced in the U.S. and Europe, down 89% from 158 a year earlier. The largest IPO of 2022 was Prime Medicine’s initial offering, which raised $180.3 million in net proceeds for the developer of a “search and replace” gene editing platform.
Another 12 biopharmas agreed to SPAC mergers with blank-check companies, according to EY, with the largest announced transaction (yet to close at deadline) being the planned $899 million merger of cancer drug developer Apollomics with Maxpro Capital Acquisition.
“For the smaller players, the target biotech companies, their alternate source of access to capital pathways such as IPOs and SPACs is shutting down on them. So how would the biotech companies continue to fund themselves? Those with quality assets are still getting funded through venture capital or other forms of capital,” Baral said. “But in general, there is not a lot of appetite for the biotech that is taking that risk.
Figures from EY show a 37% year-to-year decline in the total value of U.S. and European VC deals, to $16.88 billion in 2022 from $26.62 billion in 2021. Late-stage financing rounds accounted for just 31% of last year’s VC deals, down from 34% in 2021 and 58% in 2012. The number of VC deals in the U.S. and Europe fell 18%, to 761 last year from 930 in 2021.
The decline in VC financing helps explain why many smaller biopharmas are operating with cash “runways” of less than 12 months. “Depending on the robustness of their data, their therapeutic area, and their management, there will be a natural attrition. Some of these companies will just have to wind down,” Baral added.
Baral also acknowledged some headwinds that are likely to dampen the pace of M&A activity. In addition to rising interest rates and inflation increasing the cost of capital, valuations remain high for the most sought-after drugs, platforms, and other assets—a result of growing and continuing innovation.
Another headwind is growing regulatory scrutiny of the largest deals. Illumina’s $8 billion purchase of cancer blood test developer Grail has faced more than two years of challenges from the U.S. Federal Trade Commission and especially the European Commission—while Congress acted last year to begin curbing the price of prescription drugs and insulin through the “Inflation Reduction Act.”
Those headwinds may prompt many companies to place greater strategic priority on collaborations and partnerships instead of M&A, Baral predicted, since they offer buyers early access to newer technologies before deciding whether to invest more capital through a merger or acquisition.
“Early-stage collaboration, early minority-stake investment becomes increasingly important, and it has been a cornerstone for early access to these technologies for the industry for a long, long time, and that is not changing any time soon,” Baral said. “On the other hand, even on the therapeutic area side, early-stage development is still expensive to do in-house for the large biopharma companies because of their cost structure.
“So, it is efficient cost-wise and speed-wise to buy these assets when they reach a certain point, which is probably at Phase II onward, and then you can pull the trigger on acquisitions if needed,” he added.congress pandemic genetic interest rates european europe
Pfizer’s Albert Bourla spells out ‘transition year’ for Covid products, with sales expected to reach a low point
On the heels of a record sales year, Pfizer is bracing for impact as it expects Covid-19 revenue to bottom out in 2023.
That’s due to lower compliance…
On the heels of a record sales year, Pfizer is bracing for impact as it expects Covid-19 revenue to bottom out in 2023.
That’s due to lower compliance with vaccine recommendations, fewer primary vaccines being administered, and a “significant” government supply that’s expected to last throughout early this year, execs said Tuesday on the company’s Q4 earnings call.
CEO Albert Bourla anticipates $13.5 billion in Comirnaty sales this year, down 64% from 2022, and just $8 billion in Paxlovid revenue, down 58% from 2022.
“We expect 2023 to be a transition year in the US,” he said on the call, adding that the company sold more vaccine and treatment doses this year than were actually used. “This resulted in a government inventory build that we expect to be absorbed sometime in 2023 — probably the second half of the year. Around that time, we expect to start selling Comirnaty through commercial channels at commercial prices.”
Just 15.5% of eligible Americans have received bivalent booster doses, compared to 69.2% who completed their primary series, according to the CDC’s latest data. Last week, the FDA’s vaccines advisory committee voted unanimously in favor of “harmonizing” Covid vaccine compositions, meaning all new vaccine recipients would receive a bivalent shot, regardless of whether they’ve received the primary series.
Even so, only 31% of people in the US received a Covid vaccine this year, and Pfizer expects that number to dip to about 24% in 2023.
Bourla’s expecting a similar slump in Paxlovid sales, due to existing unused government supply. According to data from ASPR updated last week, states have about 4 million unused Paxlovid courses.
The antiviral significantly underperformed this year, missing Bourla’s prior full-year projections by just over $3 billion. Comirnaty seemed to pick up the slack, however, raking in roughly $37.8 billion in global sales, or about $3.8 billion more than Bourla predicted at the end of the third quarter.
“While patient demand for our Covid products is expected to remain strong throughout 2023, much of that demand is expected to be fulfilled by products that were delivered to governments in 2022 and recorded as revenues last year,” CFO David Denton said on the call.
Commercial pricing for both Comirnaty and Paxlovid will likely kick in around the second half of this year, according to Bourla. While the pharma giant previously said it expects to charge between $110 and $130 for the BioNTech-partnered shot (almost quadrupling the price), chief commercial officer Angela Hwang said the team is still “preparing what those pricing scenarios could look like” for Paxlovid and will “share more at the right time.”
The Pfizer team is expecting Covid sales to pick back up in the next couple years — and if all goes according to plan, a successful combination shot for flu and Covid-19 would “bring the percentage of Americans receiving the Covid-19 vaccine closer to the portion of people getting flu shots, which is currently about 50%,” Bourla said. The company launched a Phase I study for an mRNA-based combo vaccine back in November.
Lower projected Covid sales led Bourla to set his full-year sales expectations in 2023 at $67 billion to $71 billion, down roughly 30% from 2022, which let down some analysts.
“PFE guidance for 2023 provided with 4Q22 results was disappointing despite the company talking down financial prospects in recent weeks,” SVB Securities analysts wrote in a note to investors on Tuesday.
However, when it comes to R&D investment, Bourla’s keeping his foot on the gas. As the CEO said back in November, “It’s all about what’s next.”
That’s why he’s earmarking around $12.4 billion to $13.4 billion for R&D this year, up nearly 9% from last year. It’s all part of his effort to make up for an expected $17 billion loss due to patent expiries between 2025 and 2030.
Last quarter, he spelled out ambitious plans to bring 19 new products or indications to market over the next year and a half. The chief executive highlighted a few of those programs on Tuesday, including potential combo shots for flu, Covid-19 and RSV, an oral GLP-1 candidate for diabetes and obesity, and potential vaccines for Lyme disease and shingles.
Other programs, however, didn’t make the cut. Pfizer also disclosed on Tuesday that it cut eight programs, including recifercept, an achondroplasia drug that was the centerpiece of Pfizer’s Therachon buyout in 2019, and two Paxlovid indications that failed their respective Phase III trials.cdc covid-19 vaccine treatment fda
IMF Upgrades Global Growth Forecast As Inflation Cools
IMF Upgrades Global Growth Forecast As Inflation Cools
The International Monetary Fund published its latest World Economic Outlook on Monday,…
The International Monetary Fund published its latest World Economic Outlook on Monday, painting a slightly less gloomy picture than three and a half months ago, as inflation appears to have peaked in 2022, consumer spending remains robust and the energy crisis following Russia’s invasion of Ukraine has been less severe than initially feared.
However, the IMF predicts the slowdown to be less pronounced than previously anticipated.
Global growth is now expected to fall from 3.4 percent in 2022 to 2.9 percent this year, before rebounding to 3.1 percent in 2024.
The 2023 growth projection is up from an October estimate of 2.7 percent, as the IMF sees far fewer countries facing recession this year and does no longer anticipates a global downturn.
You will find more infographics at Statista
One of the reasons behind the cautiously optimistic outlook is the latest downward trend in inflation, which suggests that inflation may have peaked in 2022.
The IMF predicts global inflation to cool to 6.6 percent in 2023 and 4.3 percent in 2024, which is still above pre-pandemic levels of about 3.5 percent, but significantly lower than the 8.8 percent observed in 2022.
“Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe,” Pierre-Olivier Gourinchas, the IMF’s chief economist, wrote in a blog post released along with the report.
“Inflation, too, showed improvement, with overall measures now decreasing in most countries—even if core inflation, which excludes more volatile energy and food prices, has yet to peak in many countries.”
The risks to the latest outlook remain tilted to the downside, the IMF notes, as the war in Ukraine could further escalate, inflation continues to require tight monetary policies and China’s recovery from Covid-19 disruptions remains fragile. On the plus side, strong labor markets and solid wage growth could bolster consumer demand, while easing supply chain disruptions could help cool inflation and limit the need for more monetary tightening.
In conclusion, Gourinchas calls for multilateral cooperation to counter “the forces of geoeconomic fragmentation”.
“This time around, the global economic outlook hasn’t worsened,” he writes. “That’s good news, but not enough. The road back to a full recovery, with sustainable growth, stable prices, and progress for all, is only starting.”
However, just because the 'trend' has shifted doesn't mean it's mission accomplished...
That looks an awful lot like Central Bankers' nemesis remains - global stagflation curb stomps the dovish hopes.
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