How Did GSK’s HIV Business Perform in 1Q16?
What Drove GlaxoSmithKline's Solid 1Q16 Results?
ViiV Healthcare
GlaxoSmithKline’s (GSK) HIV medicines business is managed by ViiV Healthcare, a global specialist company in HIV medicines. This company has GlaxoSmithKline as a major shareholder while Pfizer (PFE) and Shionogi are among the other shareholders. ViiV Healthcare is completely focused on delivering advances in HIV treatment and care.
HIV products reported growth of 57% at constant exchange rates to 729 billion pounds in 1Q16 over 1Q15. The growth is driven by the new products Tivicay and Triumeq, partially offset by declining sales of Epzicom/Kivexa. Geographically, the sales of HIV products in the US markets increased by 76% while the sales in Europe and international markets increased 39% and 31%, respectively, mainly driven by Tivicay and Triumeq. During 1Q16, Epzicom/Kivexa sales fell by 15%, Selzentry sales fell by 3%, Combivir sales fell 50%, and Lexiva sales declined 13%.
Tivicay and Triumeq
Tivicay and Triumeq are key products for the treatment of patients with HIV-1 infections. Tivicay is prescribed in combination with other antiretroviral drugs while Triumeq is a combination of three antiviral drugs. Tivicay reported a 60% growth at constant exchange rates in its 1Q16 revenues at 188 million pounds while Triumeq reported over 100% growth at constant exchange rates in its 1Q16 revenues at 328 million pounds. The combined revenues for both these drugs are estimated to reach 4.5 billion pounds by 2020.
Recently completed Bristol-Myers Squibb deal
ViiV Healthcare announced on February 22, 2016, that in order to strengthen the HIV pipeline and outlook, the group completed the acquisition of Bristol-Myers Squibb’s (BMY) research and development assets for HIV. These assets include late-stage HIV research and development assets as well as a portfolio of preclinical and discovery-stage HIV assets.
Investors can consider the SPDR S&P International Healthcare Sector ETF (IRY), which holds 5.4% of its investments in GlaxoSmithKline while it holds 5.5% in Sanofi (SNY), 4.3% in AstraZeneca (AZN), and 3.3% in Teva Pharmaceuticals (TEVA) in order to divest the risk. Investors can also consider the Vanguard FTSE All-World Ex-US Index Fund (VEU), which holds ~0.6% of its total investments in GlaxoSmithKline.
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