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GlaxoSmithKline (GSK - Analyst Report) and partner Theravance Inc. (THRX - Analyst Report) recently received a boost when the Pulmonary-Allergy Drugs Advisory Committee of the US Food and Drug Administration (FDA) voted in favor of approving their candidate FF/VI (furoate/vilanterol, proposed brand name: Breo Ellipta).

The companies are looking to get the candidate approved as a long-term, maintenance therapy of airflow obstruction and for bringing down exacerbations in patients suffering from chronic obstructive pulmonary disease (COPD). Nine of the thirteen panel members voted in favor of approval of the candidate for the above indication.  Moreover, the candidate was also recommended (by a similar majority) as a treatment for the reduction of COPD exacerbations in patients having a history of exacerbations.

We remind investors that the New Drug Application (NDA) was accepted for review by the FDA in Sep 2012. A final decision from the US regulatory body is expected by May 12, 2013. Although the FDA is not bound to accept the recommendation of the advisory panel it does pay heed when reviewing new drug applications. We note that the candidate is under review for the COPD and asthma indications (proposed trade name: Relvar).

We note that Glaxo and Theravance are also looking to get another COPD candidate approved. In Feb 2013, the FDA accepted the regulatory application of Glaxo/Theravance’s UMEC/VI (proposed trade name: Anoro). The companies are looking to get the candidate approved in the US as a once daily therapy for treating patients suffering from COPD. A decision from the US regulatory body on UMEC/VI’s NDA is expected by Dec 18, 2013.

We are positive on Theravance’s pipeline programs in collaboration with Glaxo. We note that Glaxo has a robust pipeline. A number of pipeline-related news is in fact expected in the coming quarters. Given the declining sales from generic competition, we believe Glaxo’s pipeline must deliver.

Glaxo, a large cap pharma stock, carries a Zacks Rank #3 (Hold). We have a similar stance on Theravance, a biopharmaceutical company. Stocks such as Gilead Sciences, Inc. (GILD - Analyst Report) and Celgene Corporation (CELG - Analyst Report) appear to be more favorably placed in the biopharma space. Both stocks carry a Zacks Rank #2 (Buy).

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