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Jazz's (JAZZ) Epidyolex Gets Approval for New Indication in UK

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Jazz (JAZZ - Free Report) announced that GW Pharmaceuticals, its newly acquired subsidiary, received an approval from the UK Medicines and Healthcare Products Regulatory Agency (MHRA) for an expanded use of Epidyolex (cannabidiol) to treat tuberous sclerosis complex (TCS) associated seizures.

Following its label expansion in the UK, Epidyolex is eligible to treat seizures in three forms of epilepsy. In September 2019, the drug was granted a marketing authorization (MAA) in the country as an adjunctive therapy for seizures associated with Lennox Gastaut syndrome (LGS) and Dravet syndrome.

The authorization for TSC makes it the fourth approved indication for a cannabis-based medicine in the UK for GW Pharmaceuticals. Apart from Epidyolex, GW has the marketable drug Sativex (nabiximols) in its pipeline. It is a cannabis-based mouth spray for multiple sclerosis (MS)-related spasticity. Sativex is yet to receive an approval in the United States.

Shares of the company fell 4.2% on Aug 10 following the above-mentioned news. In fact, the stock has declined 12.4% so far this year, in line with the industry.

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The approval is based on data from a positive phase III safety and efficacy study evaluating cannabidiol. The study met its primary endpoint, which is, reduction in seizure frequency when treated with cannabidiol as compared to placebo. Data from the study exhibited 49% seizure reduction in patients taking cannabidiol as compared to 27% for placebo. All key secondary endpoints were supportive of the effects on the primary endpoint.

TSC is a rare genetic condition that causes most benign tumors to grow in vital body organs and is a leading cause for genetic epilepsy. Typically diagnosed in childhood, the indication has an estimated prevalence between 3,700 and 11,000 people in the UK. Following label expansion, Epidyolex is expected to drive sales for the company.

In the United States, the drug is marketed under the brand name Epidiolex. In August 2020, the same was approved in the country to treat seizures associated with TCS in addition to the treatment of seizures associated with LGS and Dravet syndrome. In April 2021, Epidyolex was approved in the EU for the same indication.

Jazz acquired GW Pharmaceuticals, a British cannabinoid drug company in May, which added a third high-growth commercial franchise to the company’s business.

Zacks Rank & Stocks to Consider

Jazz currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the biotech/drug sector are Catalent (CTLT - Free Report) , Horizon Therapeutics (HZNP - Free Report) and Ironwood Pharmaceuticals (IRWD - Free Report) , each of which sports a Zacks Rank #1 (Strong Buy) at present. You can see  the complete list of today’s Zacks #1 Rank stocks here.

Catalent’s stock has risen 14.5% in the year so far.

Horizon’s earnings per share estimates for 2021 have increased from $3.62 to $4.46 in the past 30 days. The same for 2022 has risen from $5.18 to $5.84 over the same period. The stock has rallied 43.5% in the year so far.

Ironwood’s earnings per share estimates for 2021 have increased from $1.05 to $2.04 in the past 30 days. The same for 2022 has risen from $1.18 to $1.72 over the same period. The stock has rallied 18.5% in the year so far.

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