|
Avandia News
GlaxoSmithKline: Avandia to stay but damage is done
By PBR Staff Writer
1st August 2007 - An FDA advisory committee has recommended that GlaxoSmithKline's diabetes treatment Avandia should remain available on the US market, albeit with stronger health warnings. Although the company has avoided the more negative impact of a market withdrawal, the future competitiveness of the franchise has been put into doubt.
'Content Although not a prerequisite, the FDA follows the advice of its advisory committees in the majority of cases. The FDA had called for an advisory panel to assess the safety risks and benefits of Avandia (rosiglitazone) following the publication of clinical study analysis in May which suggested that use of the treatment was linked to a 43% increased risk of heart attack.
The immediate impact of the ruling was a 3.4% gain for GlaxoSmithKline's share price on the London Stock Exchange, while the company sought to address short term shareholder concerns by confirming its 2007 earnings outlook. In the medium to long term, however, it would appear that the sales growth potential of Avandia has been blunted, despite the 'worst case' scenario of market withdrawal having been avoided.
It looks extremely likely that the FDA will issue Avandia a 'black box' warning as a result of the advisory panel recommendation, a regulatory burden that will limit the ability of GlaxoSmithKline's product to compete with Takeda's rival glitazone product Actos (pioglitazone) and newer diabetes treatments such as Merck & Co.'s Januvia (sitagliptin).
The competitive dynamic of Avandia vis-a-vis Actos could be particularly damaging for GlaxoSmithKline; prior to the safety scare, Avandia commanded a 51% share of the US market for glitazone diabetes treatments, with Actos accounting for the remaining 49%. However, by July, Avandia's share had fallen to 33% with Actos' share having risen to 67%.
Crucially, at this stage, there is no evidence to suggest that Actos is linked to a similar increase risk of heart attack and Takeda has moved quickly to assure both healthcare professionals and patients that its drug has a proven safety record. The FDA is likely to assess clinical studies of Actos to verify these claims as part of its continued studies surrounding Avandia.
Retention of Avandia's presence on the US market is a positive for GlaxoSmithKline. Nevertheless, the product was forecast to be one of the company's key sales growth drivers out to 2012. Clearly, the growth potential of the franchise will be significantly diminished should Takeda's Actos successfully retain its recently enhanced share of the glitazone market.
Furthermore, there remains considerable doubt as to whether GlaxoSmithKline's late stage pipeline can deliver sufficient sales growth to counter anticipated declining sales from its currently marketed portfolio as patent expiries and generic competition intensifies at the end of the decade. The weakened position of Avandia will only serve to heighten these fears among shareholders.
|
