) announced that their type II diabetes candidate, Forxiga
(dapagliflozin) has received European approval. The European
Commission (EC) approved the once-daily oral product for
improving glycemic control in type II diabetes patients above 18
years along with lifestyle management and other glucose-lowering
products, such as insulin. Forxiga can be used as a monotherapy
in patients who are intolerant to metformin.
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The EU approval did not come as a surprise as earlier in April
2012 the Committee for Medicinal Products for Human Use (CHMP) of
the European Medicines Agency (EMA) had issued a positive opinion
regarding the approval of Forxiga in the EU.
We note that the regulatory path for Forxiga has been quite
diverse as far as approval in the US and EU is concerned. The
candidate received a complete response letter (CRL) in the US in
The diabetes market, while crowded, represents significant
commercial potential. Key players in the diabetes market include
) among others.
Neutral on AstraZeneca
We are encouraged by AstraZeneca's focus on the high-potential
emerging markets. We are pleased with its efforts to expand its
pipeline and portfolio through mergers and acquisitions.
The Ardelyx agreement, Ardea acquisition, the
) collaboration and the expansion of the diabetes alliance with
Bristol-Myers, all these represent the company's efforts in this
direction. We expect more such deals in the near term.
However, we remain concerned about the generic competition faced
by the company's key products. In 2011, the company lost revenues
worth almost $2 billion to generic competition. The weak
late-stage pipeline at AstraZeneca coupled with the slow Brilinta
uptake also bothers us.
We currently have a Neutral recommendation on AstraZeneca. The
stock carries a Zacks #3 Rank (Hold rating) in the short run.