Analysts have been reacting to the decision by a US Food and Drug Administration advisory panel to keep GlaxoSmithKline’s controversial diabetes drug Avandia on the US market and while the company is pleased, many observers are questioning whether the treatment can ever recover its dominant position.
A joint meeting of the FDA’s Endocrinologic and Metabolic Drugs
and Drug Safety and Risk Management Advisory Committees voted 22-1 to keep Avandia (rosiglitazone) on the US market, stating that the benefits clearly outweighed the risks. The panel did find however, by 20 votes to 3 that evidence exists that the drug adds to the risk of cardiovascular disease.
Navid Malik at Collins Stewart said that GSK “can now
re-launch the drug with full knowledge that its safety has been rigorously tested by the FDA panels”, though it remains to be seen what action the agency will now take. It seems highly likely, however, that new warnings will be added to the drugs label and the analyst notes that “this was pretty much anticipated, and will hurt the franchise.” However, Mr Malik added, “doctors in the US have become accustomed to managing their way through risks when using commonly prescribed drugs” and while certain patients with a cardiovascular risk profile will be excluded from using the drug, most “will continue to see substantial benefit from its use”.
He added that Collins Stewart’s revised forecasts for Avandia see flat sales for this year and next, but he argues that investors need to look past the Avandia problem. “With ten launches this year (including five growth drivers)” and up to 25 others making it to the market before 2009 “the GSK launch schedule is the best in the industry,” he said. “This is where investors should focus back on now, the Avandia issues are declining”.
Others were less sure about GSK’s prospects, and Banc of America's Chris Schott issued a note saying that the firm “will continue to face significant marketing challenges with Avandia and we see limited rationale to prescribe the drug for most patients". Graham Parry at Merrill Lynch noted that the ‘black box’ warnings that could be added to the label will “ provide a point of differentiation versus the main competitor, Takeda's Actos (pioglitazone), seeing more market share losses for Avandia".
Biota ups damages claim for Relenza
Meantime, GSK’s partner for Relenza (zanamivir), Australia’s Biota Holdings, has upped its damages claim against the UK drugs giant to as much as $600 million, accusing it of failing to promote and market the flu treatment sufficiently in order to compete with Roche’s rival product Tamiflu (oseltamivir).
As part of a legal case which began in May 2004, the updated damages assessment filed with the Victorian Supreme Court estimates Biota’s losses in the range of A$564-A$704 million, net of royalties paid to date and up from a previous estimate of A$308-A$430 million. The Melbourne-based firm said the increase “ is attributable to a number of factors”, including growth in the global stockpiling market for influenza antiviral treatments now estimated to be worth $5.6 billion, up from Biota’s initial forecast of $3 billion in 2005.
GSK has repeatedly rejected Biota's claims and says it has met its obligations. The case is scheduled to go to trial in April 2008.