EU approves first long-acting HIV treatment for teens

LONDON - The European Commission has authorized the use of Vocabria and Rekambys, a long-acting injectable regimen, for adolescents living with HIV-1, ViiV Healthcare, majority-owned by GSK (NYSE: GSK), announced today. GSK, with a market capitalization of $71 billion and maintaining a "GREAT" financial health score according to InvestingPro, continues to strengthen its position in the pharmaceutical sector. This treatment is the first complete long-acting injectable regimen for HIV, offering an alternative to daily oral medications.

The approval allows for the treatment of HIV-1 infection in adolescents aged 12 and above, weighing at least 35 kg, and who have achieved viral suppression. This new option is significant for the estimated 1.55 million adolescents globally who live with HIV and often struggle with treatment adherence and stigma associated with the disease.

Clinical trials and real-world studies have shown that the long-acting regimen, consisting of cabotegravir and rilpivirine injections, reduces the annual dosage from 365 pills to as few as six treatments per year. This simplification has been preferred by 99% of adolescents in the MOCHA study due to convenience and reduced pill burden. GSK’s strong gross profit margin of 72.4% and revenue growth of 5.6% reflect its successful commercialization strategy. Analysis from InvestingPro suggests GSK is currently trading below its Fair Value, indicating potential upside for investors.

The MOCHA study (IMPAACT 2017, Study 208580), a Phase I/II trial, supported the Marketing Authorisation with week 24 data demonstrating that out of 144 participants, 96.5% maintained viral suppression. The regimen was previously approved for use in adults in December 2020.

ViiV Healthcare, a specialist HIV company majority-owned by GSK with Pfizer (NYSE:PFE) and Shionogi as shareholders, has expressed a commitment to expanding access to HIV medicines for all age groups. Harmony (JO:HARJ) P. Garges, MD, Chief Medical (TASE:PMCN) Officer at ViiV Healthcare, emphasized the importance of this authorization for adolescents in Europe who may find a long-acting regimen more suitable for their needs.

The approval of this treatment provides a new avenue for addressing the challenges faced by young individuals living with HIV, aligning with ViiV Healthcare’s mission to ensure comprehensive care for those affected by the virus. With GSK’s earnings report due in 5 days, InvestingPro subscribers can access additional insights, including 8 more ProTips and detailed financial metrics to evaluate the company’s growth trajectory. This information is based on a press release statement.

In other recent news, GSK Plc’s CEO, Emma Walmsley, has announced plans for more business deals to intensify the company’s focus on cancer treatments. This follows a recent agreement with cancer biotech firm IDRx, Inc., worth up to $1.15 billion, aimed at procuring an experimental drug for the treatment of gastrointestinal stromal tumors. GSK plans to advance the IDRx drug to late-stage trials within the year.

Meanwhile, TD Cowen has raised concerns about the global pharmaceutical industry’s future due to the impact of U.S. tariffs and geopolitical tensions. In its analysis, it highlighted that large-cap pharma companies, including GSK, are well-positioned to mitigate these risks.

In a separate development, Jefferies has downgraded GSK from ’Buy’ to ’Hold’, citing potential headwinds for Arexvy & Shingrix, and the US Medicare Part D redesign. Despite this, Jefferies maintains that GSK’s targets for a Sales Compound Annual Growth Rate (CAGR) of over 7% and a 2026 Core EBIT margin of over 31% are still achievable. These are some of the recent developments that investors should keep an eye on.

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