Good news recently flowed in at
) when the joint advisory committee (comprising Endocrinologic
and Metabolic Drugs Advisory Committee and the Drug Safety and
Risk Management Advisory Committee) to the US Food and Drug
Administration (FDA) voted in favor of easing safety restrictions
related to its type II diabetes drug, Avandia (rosiglitazone).
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Of the 26-member panel, 13 voted in favor of modifying and 7 in
favor of removing the Avandia Risk Evaluation and Mitigation
Strategy (REMS) program. However, 5 members voted in favor of
continuing the REMS and one recommended removal of Avandia from
the US market.
A final decision from FDA on Avandia label is expected in the
forthcoming months. Although the FDA is not bound to accept the
recommendation of the advisory panel it does pay heed to its
We note that the Avandia label restricts use of the drug in
patients already receiving Avandia and in patients who
experienced inadequately benefit with currently approved diabetes
drugs and have decided not to take Actos (pioglitazone).
We remind investors that Avandia came under the FDA scanner in
2007 after an article in the New England Journal of Medicine
(NEJM) linked the use of Avandia with increased risk of
cardiovascular events. Following the report Glaxo revised the US
label on Avandia.
In 2010, the European Medicines Agency (EMA) banned Avandia,
while the FDA severely restricted the use of the drug. Annual
sales of Avandia have fallen drastically to £6 million (in 2012)
from £1.6 billion in 2006.
We note that Avandia patents have already expired in the US. We
believe that even if the FDA takes a positive stance on the
Avandia label, with major players like
) already in the diabetes market, Avandia sales are not likely to
We note that Glaxo's product portfolio was boosted recently with
the approvals of two melanoma drugs, Tafinlar (dabrafenib) and
Mekinist (trametinib) and chronic obstructive pulmonary disease
drug, Breo Ellipta. Moreover, Glaxo boasts of a robust pipeline.
A number of pipeline-related news is expected in the coming
quarters. We believe that the pipeline at Glaxo must deliver to
combat the generic threat faced by the key drugs of the company.
Glaxo carries a Zacks Rank #3 (Hold). Companies that currently
look attractive include
), which carries a Zacks Rank #1 (Strong Buy).