London based AstraZeneca plc (AZN - Free Report) received a second Complete Response Letter (CRL) from the FDA for its new drug application (NDA) for investigational drug ZS-9.
The company is looking to get ZS-9 (sodium zirconium cyclosilicate) approved for the treatment of hyperkalemia (high potassium level in blood serum).
A look at AstraZeneca’s share price movement shows that the stock has outperformed the Zacks classified Large Cap Pharma industry this year so far. Specifically, AstraZeneca gained 12.3% during this period, while the industry rose 7%.
The company said that no new clinical data generation is required but an inspection of the manufacturing facility by the FDA will follow. AstraZeneca is committed to resolve the pending issues of CRL.
We remind investors that AstraZeneca had earlier received a complete response letter from the FDA for ZS-9 in May 2016. The CRL had cited observations from a pre-approval manufacturing inspection and the receipt of new data, which was yet to be reviewed. AstraZeneca re-submitted the NDA in Oct 2016.
Meanwhile, ZS-9 has received a positive opinion by the Committee for Medicinal Products for Human Use in the European Union.
ZS-9 became part of AstraZeneca’s pipeline following the Dec 2015 acquisition of ZS Pharma.
In a separate press release, the company announced a strategic collaboration with Circassia Pharmaceuticals plc, for the development and commercialization of the former’s inhaled respiratory medicines - Tudorza and Duaklir - for the treatment of chronic obstructive pulmonary disease (COPD), in the U.S. Tudorza is already approved and marketed in the U.S. since 2012 whereas Dukalir is subject to two ongoing clinical trials and will be submitted for review to the FDA in 2018.
Under the collaboration terms, Circassia will promote Tudorza in the U.S. through its already 100 strong representatives, which it plans to double soon. Circassia has been granted the option to gain the full commercial rights to the drug in the future. Rights to Duaklir in the U.S. have also been granted to Circassia. Per the deal, AstraZeneca will receive $50 million in Circassia stock. It will also receive a milestone payment of $100 million on approval of Duaklir in the U.S. or on Jun 30, 2019, whichever is earlier. Circassia will have to pay another $80 million on the exercise of option to gain commercial rights for Tudorza. Profits from the sale of Tudorza in the U.S. will be equally shared by the two companies
The collaboration is a strategic fit for AstraZeneca. The commercialization of the drugs will be taken care of by Circassia and will help AstraZeneca focus on its other respiratory drugs Symbicort, Bevespi Aerosphere, benralizumab and other respiratory development programmes.
Teva Pharmaceutical Industries Limited (TEVA - Free Report) and GlaxoSmithKline PLS (GSK - Free Report) also market products in the COPD segment.
Zacks Rank and Key Pick
AstraZeneca currently carries a Zacks Rank #3 (Hold). A stock worth considering in the drugs sector is Grifols, S.A. (GRFS - Free Report) with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Grifols rose 16.8% in the past one year while earnings estimates for 2017 estimates increased more than 9% to $1.14 in the past 30 days.
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