Gsk Share Discussion Threads

[philanderer] 07/12/2018 09:50

MoneyWeek

'Has Glaxo paid too much for Tesaro?'

[anhar] 07/12/2018 09:50

...There are reasons for the debt that I won't discuss here.

Indeed there are. It's called poor management.

[alphorn] 07/12/2018 09:45

anhar - I knew that you were.

I was giving some balance as to what pharma's produce that can have a significant influence on people's lives.

There are reasons for the debt that I won't discuss here.

[anhar] 07/12/2018 09:40

Alphorn: anhar - good post. I would not agree with 'proven losers' though - a great company in terms of important medicines over time; the list would be long.

A term that I have used before is that these shares are 'bond like'.

Big Pharma has to run very fast just to stand still just to replace products going off-patent.

By "proven losers" I was referring to their terrible long term share price performance which has been known for some time, it's not just a recent thing caused by the general market fall. I have no idea about the qualities of their products, they may well be a great company in that regard as you say but that is not reflected in the long term share price.

You may have noticed that people here report on every tiny little drug development as though it's going to be the next big thing that will turn GSK round. It never is. That could change in future and as an income investor I hope it does as that may lead, eventually, to an increased dividend if my strat doesn't take me out of this share before that, but the number of false starts is very large.

The reason that GSK has been such a poor capital share is that this "great company" has long made inadequate profits, not helped by their enormous debt. That debt is set to increase with the latest large US acquisition.

[montyhedge] 06/12/2018 21:09

GSK shareprice below what it was 25 years ago. Not a growth stock then.

[montyhedge] 06/12/2018 18:26

1275p target she has made a real Horlicks of this bid.

[ny boy] 06/12/2018 16:15

I will wait and see if 1366p Level arrives, lost 1430p support today.

Still could be a relief rally at anytime, watching closely

[blueteam] 06/12/2018 14:28

see this as a buy and hold now at these levels.

[rikky72] 06/12/2018 14:18

I think the point here is that if Tesaro have the specialist knowledge and experience of the therapeutic mechanism then future drugs have a better chance of being best in class. Some are focusing too much on their launched drug whereas it is their pipeline plus their expertise which carries the long term promise

[essentialinvestor] 06/12/2018 13:50

TM, a little disappointing their in-house team could not
develop something similar?. I've seen it referred to as a third tier parp inhibitor.
Would just need to trust their understanding is far better than ours,
in my case that's deffo the case!.

I asked a friend of mine who works in pharmacology, all he could offer
was AZN have the lead, and the area is very hit and miss.

[tradermichael] 06/12/2018 13:47

The slides that Hal Barron presented in July indicate the way the company plans to move. The purchase of Tesaro was a well-planned and well-executed part of this new programme. It was NOT an impulse buy, and NOT a rush to spend the Horlicks money!

"The industry needs more innovative medicines for patients with real unmet needs.
Drugs that modulate the immune system have had profound effects on patients with many different diseases.
Our scientific understanding of the role the immune system plays in the development of human disease is rapidly advancing.
GSK has deep understanding in Immunology, with several promising medicines in the pipeline."


Recommended reading:

hxxps://www.gsk.com/media/5041/rd-update-slides-hal-barron.pdf

[alphorn] 06/12/2018 13:42

Interesting. They have always funded ventures casting the net out, needed to supplement in-house work.

As a side issue, this may be an example for the techiies where R&D funding goes 'off the books' into the Balance Sheet as I posted earlier. I will look at the next FS's if I have a moment.

(example: if £10m is used to fund in-house research it is an expense. If £10m is used to buy shares in an outfit that does the exact same research is it an investment?).

[tradermichael] 06/12/2018 13:29

The media/market largely missed this signal in October:

GSK Funds a New Startup with Immunometabolic Focus
Published: Oct 08, 2018 By Alex Keown

Backed by GlaxoSmithKline and Boston’s SV Health Investors, a new biopharmaceutical company known as Sitryx launched with $30 million in a Series A funding round to develop disease-modifying therapeutics in immuno-oncology and immuno-inflammation.
Based in Oxford, England, Sitryx intends to use its funding to address a broad range of immunometabolic targets. The company said it has assembled a portfolio of products that will address oncology and immuno-inflammatory indications through differentiated chemistry approaches, including small molecules, proteolysis targeting chimera (PROTACS) and topical formulations.
Not only was Sitryx supported financially by GSK, but the fledgling company also said it is working closely with GSK’s drug discovery teams. That cooperation between the startup and the global powerhouse underscores the larger company’s long-term commitment to developing immuno-associated treatments. In July, GSK’s R&D Head Hal Barron unveiled the company’s new strategy that focuses on new treatments through modulating the immune system.
Immunology is at the heart of GSK’s new approach to R&D,” John Lepore, GSK’s head of research said in a statement. “Through our Immunology Network, we believe the emerging field of immunometabolism that Sitryx is focusing on has the potential to bring new therapeutic opportunities to patients for a broad range of diseases including cancer. Our investment in Sitryx will allow us to access this exciting science through working closely with world-renowned academic scientists in an open collaborative way.”
Sitryx said it has received access to “certain GSK technologies” as well as the licensing of intellectual property, including chemical matter, from GSK. GlaxoSmithKline̵7;s interest in Sitryx arose from work within the Immunology Network, a unique open collaboration initiative connecting GSK to the work of academic scientists and their novel immunology research, the company said.
In addition to GSK, the Sitryx funding round was supported by SV Health Investors, Sofinnova Partners and Longwood Fund. Sitryx noted that the investment will be used to develop disease-modifying therapies in immuno-oncology and immuno-inflammation. The area of immunometabolism and the role of metabolic pathways in immune cell function is a hot new area of focus for some companies. Sitryx said changes to these pathways have been shown to be pivotal in the development of a number of severe diseases, including a range of cancer and autoimmune conditions. Correcting immune cell function and/or inhibiting tumor cell growth through immunometabolic therapies have the potential to be key, complementary and highly differentiated approaches to treating disease, Sitryx said.
Sitryx will be helmed by Neil Weir, who was most recently senior vice president of discovery at UCB Pharma.
“Immunometabolism is an extremely exciting and compelling scientific area and, at Sitryx, we have seen that modulation of these key cellular pathways has broad therapeutic potential across multiple disorders with unmet medical need, particularly in the areas of immuno-oncology and immuno-inflammation,” Weir said in a statement.
Sitryx co-founders include Houman Ashrafian, partner at SV Health Investors; Luke O’Neill, professor of biochemistry at Trinity College Dublin; Jonathan Powell, associate director of the Institute for Cancer Immunotherapy at Johns Hopkins University; Jeff Rathmell, director of the Vanderbilt Center for Immunobiology; Michael Rosenblum of the UCSF School of Medicine; and Paul Peter Tak, the former chief immunology officer at GSK.

[tradermichael] 06/12/2018 12:32

Well said …. ;0)

[solomon] 06/12/2018 12:27

I'm sure that TM will agree that GSK has the divi attraction but that it can be more than matched in value by judicious trading.

[rikky72] 06/12/2018 10:58

The funny thing is that, if successful, this is exactly the type of deal that can create shareholder value in the longer term. It just seems to me that these have been thought of as an income share for so long (and performed that way) that many investors now only see this as a dividend play and takes fright at anything they perceive that might affect the divi. A disappointing fall but hoping to see at least a good partial recovery in the medium termonce things have settle for

[alphorn] 06/12/2018 10:53

anhar - good post. I would not agree with 'proven losers' though - a great company in terms of important medicines over time; the list would be long.

A term that I have used before is that these shares are 'bond like'.

Big Pharma has to run very fast just to stand still just to replace products going off-patent.

[philanderer] 06/12/2018 10:01

6th dec HSBC 'buy' .. tp 1820p cut from 2000p

[ny boy] 06/12/2018 09:56

Still not tempted following the broker downgrades, 1430p may prove to be flimsy support, this deal is certainly testing investors patience, disappointing considering the share price was gaining upside traction, until the news of this awful deal arrived!

[anhar] 06/12/2018 09:30

In December 2000, two of the UK's largest pharmaceutical companies, Glaxo Wellcome and SmithKline Beecham came together to form global giant GlaxoSmithKline.

At that time, GSK's share price was close to £21, valuing the firm at close to £110bn and putting it in the top three of the FTSE 100.
Fast forward almost 18 years and GSK's share price is around £14.75, or about a third lower than at the time of the merger.

That’s a bitter pill to swallow for investors as the deal has failed to prevent the destroyal of roughly £30bn of shareholder wealth.

TM: Most will be aware of this appalling long term capital performance by GSK. The mystery is why you think it's the one share in which to invest so much, with that history. This is not a new thing, it's been clear for many years that GSK is an awful share for capital gain purposes.

I invest only for income and have held for a long time now during which it has done what I wanted on dividends, up to a point though even that's been frozen for years now, but if I was a capital player and willing to risk it all or most on just one stock, I would never consider GSK. They are proven losers, at least over the last 18 years.

Long term my dividend stocks have in total done very well on capital, though that's not why I invest this way, but GSK is one of the exceptions. In fact with the market fall pushing up the FTSE100 yield, and GSK's frozen 80p dividend making a yield of 5.6% at 1435p, it's getting closer to my exit point.

[ny boy] 06/12/2018 08:55

Still waiting to see if 1430p is reached and holds as support, or whether bears are targeting the next solid support @ 1366p?

[xxxxxy] 05/12/2018 21:20

Considering

[tim 3] 05/12/2018 18:53

Was congratulating myself on this the other day especially considering the amount of poor performance of my other shares recently .. what a difference a few days make.