Back to top

Analyst Blog

AstraZeneca (AZN - Analyst Report) announced that its type II diabetes drug, Forxiga, has been approved by the Japanese Ministry of Health, Labour and Welfare (MHLW). AstraZeneca and Japan-based Ono Pharmaceutical Co., Ltd. will co-promote Forxiga, a sodium glucose co-transporter-2 (SGLT2) inhibitor, in Japan.

We remind investors that the marketing application for Forxiga was submitted to MHLW by Bristol-Myers Squibb Company (BMY - Analyst Report). However, AstraZeneca acquired full rights to Forxiga from Bristol-Myers in Feb 2014.

Forxiga is already approved in the U.S. (Jan 2014) and the EU (Nov 2012) for type II diabetes.

Our Take

We are pleased with the approval of Forxiga in Japan. According to the company, approximately 9.5 million people are suffering from type II diabetes in Japan. Generic competition has adversely impacted AstraZeneca's revenues over the past few quarters – this has put significant pressure on the company. In this context, the recent string of approvals for Forxiga and the subsequent up-take of the drug will give a much needed boost to the company’s top line.

We note that Astellas Pharma, Inc.’s (ALPMY) Suglat, a SGLT2 inhibitor, which gained Japanese approval in January this year, has a head start over Forxiga. Meanwhile, Mitsubishi Tanabe Pharma’s SGLT2 inhibitor, canagliflozin (U.S. trade name: Invokana) is currently under regulatory review in Japan.

AstraZeneca, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). A better-ranked stock in the biopharma sector is Alexion Pharmaceuticals, Inc. (ALXN - Analyst Report). Alexion carries a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%