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GlaxoSmithKline ( GSK - Analyst Report ) recently announced that it has submitted marketing applications for Promacta (eltrombopag), known as Revolade in the EU and other countries. The company has submitted a supplemental New Drug Application (sNDA) to the US Food and Drug Administration (FDA) for Promacta. A variation to the Marketing Authorisation Application (MAA) to the European Medicines Agency (EMA) for Revolade has also been submitted.
Glaxo is looking to get the drug approved for the treatment of thrombocytopenia in adult patients with chronic hepatitis C virus (HCV) infection to enable the initiation of interferon-based therapy and to achieve optimum results with interferon-based therapy. We note that interferon-based therapies are commonly prescribed treatments for chronic HCV infection.
In November 2011, Glaxo had presented positive results from phase III trials evaluating the use of Promacta for thrombocytopenia in patients with chronic HCV infection. Full results from the ENABLE 1 trial and initial data from ENABLE 2 were reported. Both trials met the primary endpoint. It was found that patients who received Promacta along with Roche’s ( RHHBY ) Pegasys (peginterferon alfa-2a) and ribavirin antiviral therapy achieved a statistically significant improvement over patients receiving placebo.
Promacta is approved for the treatment of idiopathic thrombocytopenic purpura (ITP), a condition which causes increased risk of bruising and bleeding. Glaxo has a research collaboration agreement with Ligand Pharmaceuticals Inc. ( LGND - Snapshot Report ) for this drug. Promacta sales more than doubled from the year-ago quarter to £27 million in the first quarter of 2012.
Neutral on Glaxo
We currently have a Neutral recommendation on Glaxo. The stock carries a Zacks #3 Rank (Hold rating) in the short run. A major part of Glaxo’s revenues will be exposed to generic competition as multiple drugs are scheduled to lose exclusivity in the next few years.
We expect the company’s top line as well as gross margins to remain under pressure in the coming quarters. In addition to generic competition, EU pricing pressure will continue to affect sales.
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