Recently, GlaxoSmithKline (GSK - Analyst Report) announced that two new melanoma drugs, Tafinlar (dabrafenib) and Mekinist (trametinib) have been cleared by the US Food and Drug Administration (FDA). Glaxo intends to launch both drugs by early third quarter of 2013.
The FDA approved Tafinlar for BRAF V600E mutation-positive unresectable or metastatic melanoma patients. However, Tafinlar is not recommended for patients suffering from wild-type BRAF melanoma. The FDA also cited several warnings and precautions related to the use of Tafinlar, which can lead to fatal side effects including increasing the risk of developing new primary cutaneous malignancies.
Mekinist was approved for the treatment of patients suffering from unresectable or metastatic melanoma with BRAF V600E or V600K mutations. We note that Mekinist is not indicated for patients who have received a prior BRAF inhibitor treatment.
Meanwhile, Glaxo acquired a Switzerland based private clinical-stage biopharmaceutical company, Okairos AG for €250 million (approximately $325 million). The acquisition adds several early stage vaccines candidates targeting respiratory syncytial virus (RSV), hepatitis C virus (HCV), malaria, tuberculosis, ebola and HIV.
We believe that these candidates will boost Glaxo’s vaccines pipeline and on approval complement Glaxo’s existing vaccines portfolio, which includes Rotarix (rotavirus) and Cervarix (human papillomavirus virus).
Glaxo carries a Zacks Rank #3 (Hold). We are positive on Tafinlar and Mekinist gaining FDA approval. Moreover, Glaxo boasts of a robust pipeline. A number of pipeline-related news is expected in the coming quarters.
Given the declining sales from generic competition, we believe Glaxo’s pipeline must deliver. Companies that currently look attractive include Santarus, Inc. , Jazz Pharmaceuticals (JAZZ - Analyst Report) and Salix Pharmaceuticals . All three carry a Zacks Rank #1 (Strong Buy).