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Analyst Blog

GlaxoSmithKline recently announced encouraging initial results from the phase IIIb/IV FLAMINGO study on ViiV Healthcare’s HIV drug, Tivicay (dolutegravir). The open-label, 48-week study compared the use of Tivicay with Prezista (darunavir) in combination with Norvir (ritonavir) in treatment-naïve adults suffering from HIV-1.

It was found that significantly more patients in the Tivicay (90%) arm exhibited virologic suppression as compared to the Prezista (83%) arm.

We note that ViiV Healthcare, a company focused on the treatment of HIV, was established by Glaxo and Pfizer in 2009. After certain amendments in Oct 2012, Glaxo, Pfizer and Shionogi now own 76.5%, 13.5% and 10% of ViiV Healthcare, respectively.

We remind investors that on Aug 12, 2013, Tivicay was cleared by the U.S. Food and Drug Administration (FDA) as an add-on therapy to other antiretroviral agents for the treatment of patients suffering from HIV-1, who are above 12 years and weigh at least 88 lbs (40 kg).

The FDA approved Tivicay on the basis of encouraging data from four pivotal phase III trials (n ~ 2,557). Tivicay is an integrase inhibitor. ViiV Healthcare is also looking to get the HIV drug approved in the EU and has submitted a marketing authorisation application to the European Medicines Agency for the same in Dec 2012.

A fixed dose combination of Tivicay and abacavir/lamivudine is also being evaluated. ViiV Healthcare expects to submit regulatory applications for the drug later in the year.

We note that sales at ViiV Healthcare have been on the decline over the past few quarters due to generic erosion of Combivir, Epivir and several other products in the U.S. Tivicay, with multi-million dollar potential, should help in the top-line rebound.

Glaxo currently holds a Zacks Rank #3 (Hold). At present, companies like Novo Nordisk and Bayer look well-positioned with a Zacks Rank #2 (Buy).

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