) recently suffered a pipeline setback, when its Crohn's disease
candidate, vercirnon, failed to meet both the primary and the key
secondary endpoint in the SHIELD-1 phase III study (first of four
phase III studies). Glaxo was evaluating the use of vercirnon in
adults suffering from moderately-to-severely active Crohn's
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The randomized, double-blind, placebo-controlled, 12-week,
SHIELD-1 study evaluated vercirnon in two doses (500 mg once
daily and 500 mg twice daily) versus placebo in Crohn's disease
patients. Not only did vercirnon fail to show significant
clinical response and clinical remission (reduction or
disappearance of symptoms) at 12 weeks, a direct correlation was
found between dosage strength of vercirnon and overall adverse
event rates. Adverse events and withdrawals in patients receiving
vercirnon were similar to that in the placebo arm.
Glaxo has stopped recruiting new patients and dosing in the
ongoing phase III development program for vercirnon until data
from SHIELD-1 study has been reviewed in depth. The phase III
development program includes four studies (SHIELD-1, SHIELD-2,
SHIELD-3 and SHIELD-4), aimed to evaluated the safety and
efficacy of vercirnon in more than 2,500 moderately-to-severely
active Crohn's disease patients.
We are disappointed with the pipeline setback at Glaxo. The
biggest near-term challenge for Glaxo will be to replace the
revenues that will be lost to generic competition. Products like
Paxil, Lamictal, Combivir and Epivir are already facing declining
sales due to intense generic competition. Going forward, a major
part of Glaxo's revenues will be exposed to generic competition
as products like Pandemrix and Prepandrix are all scheduled to
lose exclusivity in the next few quarters.
We believe that positive data from the program would have
supported regulatory filings and increased Glaxo's chances of
gaining marketing approval for vercirnon and provided a much
needed boost to Glaxo's revenues.
We note that in Jan 2010, Glaxo licensed vercirnon from
). ChemoCentryx' share price fell approximately 29% on the news.
Glaxo currently holds a Zacks Rank #3 (Hold). Companies that look
attractive at present include
Gilead Sciences Inc.
) with a Zacks Rank #1 (Strong Buy) and
Johnson & Johnson
) and ChemoCentryx with a Zacks Rank #2 (Buy).