GSK agrees to buy respiratory medicine specialist Aiolos Bio for $1.4bn

GSK has struck a $1.4bn deal to acquire Anglo-American biotech Aiolos Bio, which makes respiratory medicines, as the British pharma group seeks to broaden its range of asthma treatments.

The acquisition will give GSK access to a treatment entering mid-stage trials, Aiolos’s AIO-001. Tony Wood, chief scientific officer of GSK, said the asthma drug could “expand the reach of our current respiratory biologics portfolio, including to the 40 per cent of severe asthma patients . . . where treatment options are still needed”.

Aiolos launched just three months ago, after raising $245mn in financing from investors including Atlas Venture and Bain, but its treatment is ready to enter mid-stage, phase II trials, according to GSK. The group will pay $1bn upfront to acquire the San Francisco and London based biotech, with up to $400mn in milestone payments to come.

The deal comes as pharmaceutical companies are gathered in San Francisco for an annual industry conference this week, with GSK rivals Johnson & Johnson striking a $2bn deal to acquire an oncology biotech, and Merck and Novartis signing smaller deals on Monday.

GSK struck five deals in 2023 and chief commercial officer Luke Miels told the Financial Times in December that the company intended to do a similar amount of M&A in 2024, with a focus on bolt-on deals in respiratory and infectious diseases.

The £64bn company has long lagged behind £168bn Anglo-Swedish rival AstraZeneca, with investors raising questions over GSK’s pipeline of products and its growth plans. AIO-001 could rival AstraZeneca’s existing treatment Tezspire for asthma patients with so-called “low type-2 inflammation” but would only require dosage twice a year, compared with every month.

At the pharma industry conference on Tuesday, GSK chief executive Emma Walmsley said medicines like AIO-001 and its array of vaccines offered ways of “keeping people out of hospital” at a time when “governments are under huge pressure over healthcare budgets”.

Shares in GSK closed up 1.7 per cent on Tuesday following news of the deal. Analysts at Barclays said the acquisition was “in line with GSK’s strategy of adding bolt-on assets in its core therapeutics areas” such as respiratory medicines, referencing its $2bn agreement last April to buy Bellus Health, a Canadian maker of a drug for chronic coughs.

GSK has had recent success by beating Pfizer to market last year with the world’s first vaccine for respiratory syncytial virus (RSV), a condition that affects 64mn people worldwide.

The company hopes Arexvy, the RSV jab, could eventually reach $3bn in sales. It also has two further respiratory drugs in late-stage trials.