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GlaxoSmithKline (GSK - Analyst Report) and Theravance, Inc. (THRX - Analyst Report) recently announced data from four pivotal phase III studies conducted with their pipeline candidate, LAMA/LABA (UMEC/VI), for chronic obstructive pulmonary disease (COPD). LAMA/LABA is a combination of a long-acting muscarinic antagonist/LAMA (GSK573719 or umeclidinium bromide/UMEC) and a long-acting beta2 agonist/LABA (vilanterol/VI).

While two studies compared the efficacy and safety of LAMA/LABA with VI, UMEC and placebo, the other two other studies compared the efficacy and safety of LAMA/LABA with Pfizer’s (PFE - Analyst Report) Spiriva. Spiriva is commonly used as a maintenance treatment for COPD. The four studies together enrolled over 4,000 COPD patients.

In both the placebo-controlled, 24-week, randomized, double-blind studies, LAMA/LABA showed a statistically significant benefit over VI, UMEC and placebo. In the first head-to-head comparison with Spiriva, LAMA/LABA showed a statistically significant improvement. However, in the second study, LAMA/LABA failed to do so although it demonstrated numerical difference.

Currently, a 52-week safety study and two replicate 12-week crossover exercise studies are ongoing for LAMA/LABA. Glaxo plans to submit regulatory applications for LAMA/LABA towards the end of 2012.  

Our Take

LAMA/LABA, if approved, will be positioned as a replacement for Advair, one of Glaxo’s highest revenue earners with 2011 sales exceeding £5 billion. We note that Glaxo along with Theravance is also developing other COPD candidates including Relovair and MABA (GSK961081).

Earlier in May 2012, Glaxo had acquired 10,000,000 shares of Theravance for approximately $21.2887 per share. With this transaction, Glaxo increased its holding in Theravance to 26.7% from 18.3%. The increased holding by Glaxo reflects its confidence in the pipeline candidates.

We currently have Neutral recommendations on both Glaxo and Theravance. Both the stocks carry a Zacks #3 Rank (Hold rating) in the short run.

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