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Pharma Stock Roundup: FDA Nod for SNY, Roche Drugs, Generic Advair Relief for GSK?

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Key highlights this week include FDA approval of two highly-awaited drugs -- Sanofi (SNY - Free Report) and Regeneron’s Dupixent and Roche’s (RHHBY - Free Report) Ocrevus. Both drugs have blockbuster potential. Meanwhile, Mylan (MYL - Free Report) got a complete response letter (CRL) from the FDA for its generic version of Glaxo’s (GSK - Free Report) Advair.

Recap of the Week’s Most Important Stories

Sanofi/Regeneron’s Eczema Drug Approved: Sanofi and partner Regeneron gained FDA approval for their eczema treatment, Dupixent. This makes Dupixent the first and only biologic medicine to be approved for the treatment of adults with moderate-to-severe atopic dermatitis (AD) intolerant to or having an inadequate response to an existing therapy. There are about 300,000 adult patients in the U.S. The companies intend to target physicians who treat patients with this chronic and debilitating form of eczema and are experienced in prescribing biologics. Dupixent has been priced at a wholesale acquisition cost of $37,000 annually. Although the companies pointed out that the price is lower than the cost of biologic treatments for psoriasis, Dupixent could face some initial pricing hurdles given the current focus on drug pricing. Sanofi and Regeneron are working on optimizing patient access and reducing barriers to treatment.

Dupixent has blockbuster potential and is being investigated for other indications as well including asthma and nasal polyps (Read more: Regeneron & Sanofi's Atopic Dermatitis Drug Gets FDA Nod).

Mylan Generic Advair CRL a Breather for Glaxo? Mylan got hit by a CRL from the FDA for its generic version of Glaxo’s top-selling respiratory drug Advair Diskus. With Mylan not providing any details about the reason for the CRL, there is low visibility on the length of delay. Nonetheless, the CRL is good news for Glaxo which can now enjoy a few more months of Advair sales without generic competition. At the time of releasing 4Q16 results, Glaxo had guided towards 2017 core EPS growth of 5-7% CER if Advair does not face generics this year. However, a mid-2017 entry of generic Advair would lead to core EPS remaining flat or declining slightly. And despite the CRL for Mylan’s generic version, Glaxo could nevertheless face generic competition for the drug if Hikma gains FDA approval for its generic version of the treatment by May 10, 2017.

Roche MS Drug Gains FDA Approval: Swiss giant Roche’s multiple sclerosis (MS) drug, Ocrevus, which has blockbuster potential, gained FDA approval for the relapsing and primary progressive forms of the disease. This makes Ocrevus the first and only approved disease-modifying therapy for primary progressive form of multiple sclerosis (PPMS) which is one of the most disabling forms of MS. The FDA was initially expected to respond on Ocrevus last year but the FDA action date was extended by three months in Dec 2016 due to additional data submitted by Roche related to the commercial manufacturing process for the drug (Read more: Roche's Ocrevus Wins FDA Approval for 2 Forms of Sclerosis).

Year-to-date, Roche has outperformed the Zacks categorized Large Cap Pharmaceuticals industry with the company’s shares gaining 13.6% compared to the industry gain of 6.7%.

Roche is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Speedy Review for Novartis CAR-T Drug: Novartis’ (NVS - Free Report) regulatory application for its experimental CAR-T treatment, CTL019, has been granted priority review by the FDA. The company is looking to get the drug approved for use in children and young adults with relapsed and refractory (r/r) B-cell acute lymphoblastic leukemia (ALL). However, Novartis is not the only company looking to get its CAR-T treatment approved. Kite Pharma is also looking to gain approval for its CAR-T product this year (Read more: Novartis' CTL109 BLA Gets Priority Review Status from FDA).

Allergan Acne Drug Hits Endpoint in Late-Stage Studies: Allergan (AGN - Free Report) and partner Paratek said that their experimental acne treatment, sarecycline, hit the primary efficacy endpoints in a couple of late-stage studies. The companies now intend to seek FDA approval in the second half of the year (Read more: Allergan Acne Candidate Meets Endpoints in Phase III Studies).

Priority Review for AstraZeneca’s Lynparza: The FDA granted priority review for AstraZeneca’s (AZN - Free Report) new drug application for Lynparza tablets for use in platinum-sensitive, relapsed ovarian cancer patients in the maintenance setting. A response from the FDA should be out in the third quarter of 2017. Approval for this setting would expand the patient population for Lynparza significantly (Read more: AstraZeneca's Lynparza NDA Accepted for Review by FDA).

AstraZeneca also got orphan drug status from the European Medicines Agency (EMA) for inebilizumab for the treatment of neuromyelitis optica spectrum disorder (NMOSD), a rare, life-threatening autoimmune disease. There is significant unmet need for NMOSD, which affects about five in 100,000 people. Inebilizumab already has orphan drug status in the U.S.

Performance

Large Cap Pharmaceuticals Industry 5YR % Return

The NYSE ARCA Pharmaceutical Index was up slightly (0.08%) over the last five trading sessions. Among major pharma stocks, Glaxo and Lilly were up 0.4% this week. Over the last six months, Lilly gained 5.6% while AstraZeneca was down 5.1% (See the last pharma stock roundup here: Is Sanofi Buying Flexion? Pfizer, Merck KGaA Drug Approved).

What's Next in the Pharma World?

Watch out for the usual pipeline and regulatory updates. Companies like AstraZeneca will be presenting data on their oncology portfolio at the annual meeting of the American Association for Cancer Research (AACR).

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