GlaxoSmithKline plc GSK announced that the FDA has issued a complete response letter (CRL) to its supplemental biologics license application (sBLA) for label expansion of its asthma drug, Nucala for a new indication - eosinophilic chronic obstructive pulmonary disease (COPD).
Glaxo was looking to get Nucala approved as an add-on treatment to inhaled corticosteroid-based maintenance treatment for the reduction of exacerbations in COPD patients guided by blood eosinophil counts.
The CRL was not exactly a surprise as in July an FDA advisory committee had voted against recommending approval of Nucala for COPD. The committee recommended that the risk-benefit profile of Nucala, demonstrated in studies, was not adequate to support its approval. Glaxo informed that the FDA has sought more information before giving an approval.
Nucala is already approved for the treatment of severe eosinophilic asthma and eosinophilic granulomatosis with polyangiitis (EGPA). It is being evaluated in late-stage studies for nasal polyps.
Glaxo's shares have outperformed the industry , rising 11.6% compared with a 4.6% increase for the industry.
Nucala and Glaxo's other new products like inhaled Ellipta portfolio (COPD and asthma), Tivicay and Triumeq (HIV) and Menveo, Bexsero (meningitis vaccines) are all doing well and represent significant commercial opportunity. These new products generated 22% of Glaxo's Pharmaceuticals and Vaccine sales in 2016 and 30% in 2017 and continue to boost revenues in 2018.
However, Glaxo's older inhaled respiratory products, particularly Seretide/Advair, are facing competitive and continued pricing pressure, thus hurting sales. Also, continued transition to newer products is affecting sales of Advair. The drug is also expected to face generic competition in the United States this year, which will further hurt sales.
It is noteworthy here, however, that three companies Mylan MYL , Hikma Pharmaceuticals and Novartis NVS , which are trying to bring a generic version of Advair, have received a CRL from the FDA, thereby delaying the entry of generics in the U.S. market.
Glaxo currently carries a Zacks Rank #3 (Hold). A better-ranked large-cap drug stock is Eli Lilly & Company LLY , carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Lilly's earnings estimates increased 6% for 2018 and 3.6% for 2019 over the last 60 days. The company delivered a positive earnings surprise in each of the trailing four quarters, with an average beat of 10.15%. The company's shares have increased 26.8% year to date.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Eli Lilly and Company (LLY): Free Stock Analysis Report GlaxoSmithKline plc (GSK): Free Stock Analysis Report Novartis AG (NVS): Free Stock Analysis Report Mylan N.V. (MYL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research