Bristol-Myers Squibb Company
) announced that their type II diabetes drug, Farxiga, has been
approved by the U.S. Food and Drug Administration (FDA).
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The approval was in line with expectations as the FDA's
Endocrinologic and Metabolic Drugs Advisory Committee (EMDAC) had
rendered a positive recommendation on Farxiga.
We however note that Farxiga's path to approval has been far from
smooth. In Jul 2011, the EMDAC had recommended against approving
mainly due to safety concerns. Not surprisingly, the FDA issued a
complete response letter (CRL) to AstraZeneca/Bristol-Myers in
Jan 2012. While issuing the CRL, the U.S. regulatory body had
asked for additional data to better assess Farxiga's risk-benefit
profile. The agency said that the additional data may come from
ongoing or new studies.
Following the receipt of the CRL, AstraZeneca/Bristol-Myers
conducted several new studies on Farxiga. The companies not only
included data from these studies in the resubmitted NDA but also
provided additional long-term data (up to four years of duration)
from earlier studies.
We note that the drug was approved in the EU in Nov 2012 and is
marketed under the trade name Forxiga for treating type II
AstraZeneca to Have Full Global Rights to
AstraZeneca and Bristol-Myers recently signed an agreement under
which the former will acquire the latter's global diabetes
business. The deal is expected to close this quarter. The
pre-existing collaboration between the companies will be
terminated and AstraZeneca will gain global rights to major
diabetes products including Farxiga.
As per the latest deal, the approval of Farxiga triggers a $700
million payment from AstraZeneca to Bristol-Myers.
We are pleased with the approval of Farxiga in the U.S. Now that
AstraZeneca will acquire full rights to the drug, it stands to
gain more. Generic competition has adversely impacted
AstraZeneca's revenues over the past few quarters - this has put
significant pressure on the company. In this context, the
approval of Farxiga and the subsequent up-take of the drug will
give a much needed boost to the company's top line.
AstraZeneca carries a Zacks Rank #3 (Hold). Some better-ranked
). Both carry a Zacks Rank #2 (Buy).