GSK’s $2-billion purchase of Bellus delivers second big exit for Montreal’s Bellini family

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The Bellini family’s two-decade quest to repeat the blockbuster success of BioChem Pharma Inc. has finally paid off as British drug giant GSK plc said Tuesday it would buy cough treatment developer Bellus Health Inc. for US$2-billion.

GSK will pay US$14.75 a share for Laval, Que.-based Bellus, 103 per cent above its Monday Nasdaq closing price. “We don’t give up,” Bellus chief executive officer Roberto Bellini, the son of chairman and former CEO Francesco Bellini, said in an interview. “We’re used to the ups and downs of the biotechnology space.”

The deal is the latest in a series of US$1-billion-plus takeovers of Canadian life sciences companies, including Clementia Pharmaceuticals Inc., Trillium Therapeutics Inc. and Baylis Medical Co. Inc.’s cardiovascular device business.

Bellus is conducting key late-stage human trials to prove its drug, camlipixant, can reduce chronic coughing, a condition that affects 28 million people in the U.S., Japan, China and key European markets. Chronic coughing, which disproportionately affects women in their 50s, refers to coughing unrelated to another health condition that lasts eight weeks or more – and upward of one year for more than 10 million people globally.

Some cough hundreds of times a day and many suffer complications, including incontinence, headaches, vomiting, sleep deprivation and even rib fractures, as well as social stigma and psychological problems. There is no approved cure; the U.S. Food and Drug Administration hasn’t approved a new medication for coughing since dextromethorphan – a staple in cold medications – in 1958. Some doctors resort to morphine for treatment.

In December, 2021, Bellus published data from a trial of 310 chronic coughers showing a 53-per-cent reduction in cough levels – and 34 per cent lower than those who took placebos – for those who took its pills. Its latest trials, testing 1,350 people for three- and six-month periods, are set to produce results next year.

Bellus is one of four companies that set out to develop drugs to stop a sensory receptor in the upper airway from messaging the brain to trigger coughs. Bayer AG abandoned development of its drug in 2022, while Japan’s Shionogi & Co. Ltd.’s treatment is at an earlier stage of development.

Merck & Co. is further ahead of Bellus bringing its drug, gefapixant, to market but it has a significant side effect: the drug leads to taste loss. That means the Bellus drug has “best in class potential,” equity research analysts with investment bank Piper Sandler said in a report last month.

GSK chief commercial officer Luke Miels told reporters Tuesday he expected camlipixant to receive regulatory approval in 2026 and to be rapidly adopted, contributing to GSK earnings in 2027 and peaking at billions of dollars of sales a year. He said the drug would be priced at US$300 to US$600 a month per patient wholesale in the U.S. GSK already sells several therapies for respiratory ailments, including asthma treatments.

The takeover, which is expected to close during the third quarter, comes 21 years after the Bellinis became involved in Bellus, and after many setbacks.

Francesco Bellini built BioChem into one of Canada’s most successful biotechnology enterprises, selling it to Shire Pharmaceuticals Group PLC for $5.9-billion in 2001. He then partnered with Power Corp. of Canada to buy a stake in Bellus’s predecessor Neurochem Inc. in 2002.

He became CEO, convinced its lead drug, which promised to slow the onset of Alzheimer’s disease, could be a blockbuster like BioChem’s 3TC, a vital ingredient in the drug cocktail that transformed the fight against HIV/AIDS in the 1990s.

But the U.S. Food and Drug Administration in 2007 determined the drug’s effect on patients was “inconclusive,” sending Neurochem stock into a tailspin. In 2010, the company changed its name to Bellus and Dr. Bellini handed the reins to his son Roberto, now 43.

The next drug Bellus drug tried to develop – to combat a kidney ailment – failed effectiveness trials in 2016. The stock crashed again. Bellus had few prospects, nine employees, $8-million cash and a market capitalization of $15-million. Roberto Bellini wondered if he’d made the right choice following his father’s footsteps.

But he decided to press on and discovered the Neomed Institute, a research centre housed in a Montreal facility vacated by AstraZeneca in 2012, had a few molecules in development. One had potential as a cough suppressant similar to a molecule Merck had picked up in a US$500-million acquisition. Mr. Bellini convinced his board to license global rights to Neomed’s molecule in early 2017.

“This really became Roberto’s company when he bought the cough asset,” said Brian Bloom, CEO of Toronto boutique life sciences investment bank, Bloom Burton & Co.

Bellus raised money after generating positive efficacy results in rodents and showing the drug was safe in humans. But its stock plummeted again in mid-2020, after the drug was shown to have no noteworthy impact on less frequent coughers.

But management was encouraged by results showing more seriously affected patients experienced a meaningful level of cough reduction while on the drug. The company carried on, publishing promising data for chronic sufferers in late 2021. It began talks with GSK last year.

Mr. Bloom said Bellus succeeded by combining smart capital, strong leadership and a good asset, showing “Canada can punch above its weight and do what others do in other regions with more capital and talent.”

Roberto Bellini said he is “fully committed to run Bellus” for now, but added that, in the future, “I’d be excited to do this all over again.”