The FDA Helps Investors Breathe Well


The Food and Drug Administration wasn't exactly ecstatic in its review of GlaxoSmithKline and Theravance's lung drug Breo. But it didn't crush the inhaled drug, either.

A mediocre review was music to the ears of investors, which sent Theravance's shares up by double digits.

Breo would be Theravance's second product. It also sells an antibiotic called Vibativ, but it's a minor product at the moment. Theravance only recognized $5.8 million in revenue in the fourth quarter, which included not only revenue from royalties on sales of Vibativ, but also included amortized upfront licensing payments from one of its partners.

Theravance is counting on its respiratory partnership with Glaxo to help it breathe easier. Breo could be a blockbuster in a few years considering that Glaxo's Advair, which treats COPD as well as asthma, racks up sales of $8 billion a year. With Advair exclusivity in doubt -- patents are expired, but no generics of the inhaled product have been approved yet -- Glaxo is happy to have the additional drug even if it'll cut into Advair sales initially.

The FDA's review was posted ahead of Wednesday's advisory panel to review the drug. The outside experts will review Breo's safety and efficacy data to treat chronic obstructive pulmonary disease, or COPD.

The Pulmonary-Allergy Drugs Advisory Committee will be asked to vote on whether the drug should be used as a long-term maintenance treatment for COPD as well as whether it reduces COPD exacerbations. Either alone could get the drug approved, but getting both indications on the label would help with sales considering the extensive competition for COPD patients.

The FDA seems generally happy with the data, but questioned whether both components of the drug -- a corticosteroid called fluticasone furoate and a long-acting beta-agonist, or LABA, called vilanterol -- were required for efficacy. The reviewers don't seem to be convinced that fluticasone furoate is necessary for the maintenance treatment, but may limit COPD exacerbations.

Investors should pay close attention to the safety discussion about the vilanterol component because the duo has another COPD treatment, Anoro, which contains vilanterol combined with a long-acting muscarinic antagonist, or LAMA, called umeclidinium bromide. Anoro was recently submitted to the FDA and could face its own advisory committee meeting later this year.

The FDA isn't required to follow the advisory committee's advice, but given the marginally positive FDA review, a strong endorsement should make an approval likely, while a negative vote will cause the FDA to follow suit. If the committee is wishy-washy, it'll probably be hard to know which way the FDA will ultimately decide.

If Breo is approved, it'll have to compete with Boehringer Ingelheim and Pfizer's Spiriva, Merck's Foradil, and AstraZeneca's Symbicort, as well as the aforementioned Advair. While there's a lot of competition, Breo could take sales from Foradil and Symbicort since it only has to be taken once a day -- half as often as Foradil and Symbicort. The toughest competition is likely to come from Spirvia, which is only taken once daily.

Don't hold your breath, though; first the drug has to get approved.

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