EU Approval for AstraZeneca's Xigduo - Analyst Blog

Comment

Shutterstock photo

AstraZeneca ( AZN ) and Bristol-Myers Squibb Company 's ( BMY ) diabetes drug, Xigduo gained approval in the EU. The European Commission approved the drug for improving glycemic control in adults suffering from type II diabetes. We note that Xigduo is a fixed dose combination of Forxiga, a SGLT2 inhibitor, and metformin hydrochloride.

The approval was expected as the European Medicines Agency's Committee for Medicinal Products for Human Use had rendered a positive recommendation on Xigduo in Nov 2013.

AstraZeneca has a strong presence in the diabetes care market. The diabetes franchise is one of the company's five growth platforms. The company has several diabetes products including Onglyza and Forxiga (both are approved for type II diabetes) and has stepped up investment levels in this area.

AstraZeneca and Bristol-Myers signed an agreement last month under which the former will acquire the latter's global diabetes business. The deal is expected to close shortly. The pre-existing collaboration between the companies will be terminated and AstraZeneca will gain global rights to diabetes products including Xigduo.

We are pleased with the approval of Xigduo in the EU. Now that AstraZeneca will acquire full rights to the drug, it stands to gain more. However, although AstraZeneca holds a strong position in the diabetes market, we note that the market is highly crowded with players like Novo Nordisk ( NVO ).

AstraZeneca carries a Zacks Rank #3 (Hold). Generic competition has adversely impacted AstraZeneca's revenues over the past few quarters - this has put significant pressure on the company. In the near term, we believe that investor focus will be on the release of its fourth quarter and full year 2013 results (Feb 6, 2014).

Some better-ranked stocks in the pharma space include Allergan ( AGN ), which carries a Zacks Rank #2 (Buy).



ALLERGAN INC (AGN): Free Stock Analysis Report

ASTRAZENECA PLC (AZN): Free Stock Analysis Report

BRISTOL-MYERS (BMY): Free Stock Analysis Report

NOVO-NORDISK AS (NVO): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
More Headlines for: AGN , AZN , BMY , NVO


More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com