GlaxoSmithKline's New Antibiotic Approved, Goldman Sachs Sees Modest Impact

Goldman Sachs has released a research report assigning a "neutral" rating to GlaxoSmithKline (GSK.US) with a target price of $42. This report follows the approval by the U.S. Food and Drug Administration (FDA) of GlaxoSmithKline's new oral antibiotic, gepotidacin (Blujepa), for treating uncomplicated urinary tract infections (uUTIs) in adult and adolescent females aged 12 and above. The approval was based on two late-stage trials where Blujepa demonstrated efficacy superior to or equivalent to the standard of care for uUTIs. The safety and tolerability of Blujepa were consistent with previous trials, with the most common adverse events being gastrointestinal reactions such as diarrhea and nausea, which were mostly mild to moderate.

Goldman Sachs views the approval of Blujepa as an expected development for GlaxoSmithKline, reinforcing the company's position in the infectious disease sector. While the approval supports the company's message that its research and development pipeline is robust, it is not surprising to Goldman Sachs or the market. The firm considers this a relatively modest opportunity, unlikely to significantly boost the company's stock price or serve as a major catalyst for investor confidence in the company's innovative capabilities.

From a commercial perspective, Goldman Sachs highlights that Blujepa is the first new oral antibiotic for uUTIs in nearly 30 years. In the U.S., up to 16 million women are affected annually, with over half experiencing some form of infection in their lifetime, and approximately 30% of patients experiencing recurrent infections. Additionally, resistance to existing treatments is rising, underscoring the need for new therapeutic options.

GlaxoSmithKline anticipates that its anti-infective drugs, including gepotidacin, tebipenem, and Brexafemme, will achieve peak sales exceeding 2 billion pounds. Goldman Sachs estimates that the unadjusted sales for gepotidacin will be 70 million pounds in the 2025 fiscal year, below market expectations of 73 million pounds. By 2035, the firm projects unadjusted sales for the drug to reach 681 million pounds, still below market expectations of 720 million pounds.