AstraZeneca slips as Brilinta faces six month wait for possible US approval | guardian.co.uk

More developments with AstraZeneca's blood thinning treatment Brilinta, but not necessarily positive ones.

In December the US Food and Drug Administration asked for more information on Brilinta rather than giving it immediate approval, dashing Astra's hopes of an early launch. The company intends Brilinta as a new blockbuster to make up for expiring patents on some of its current bestsellers such as Nexium and Seroquel.

Now the FDA has said it will decide whether to approve Brilinta on July 20 - it could have gone for a two month or six month review and in the end plumped for the longer period. The problem is that although a US panel voted in the drug's favour last July, a key group of patients in a clinical trial have failed to show any benefit from the treatment.

This means more delay in launching the drug, although Astra repeated it was confident in its submission.

The news has sent Astra's shares down 16.5p to 2946.5p, with analysts mixed on the implications. Navid Malik at Matrix said:

[This] is not a good sign in our view. It is likely that if approved in the US, Brilinta may have its label restricted against high-dose aspirin, which will limit its commercial opportunity and there may be a requirement for a further clinical study post-approval.

We still have $2bn of peak sales for Brilinta in our model; however, with the extended review for Brilinta following re-submission post the FDA complete response letter, we have doubts about the perception that the issues the FDA is dealing with are straightforward. We believe that given the high-dose aspirin explanation for the lack of efficacy with Brilinta US patients, the FDA has a tough task: it has to decide whether to approve a drug which cannot be used with aspirin at high dose, which is standard of care and best practice. This would suggest that the FDA has some more serious issues to contend with than the market is discounting.

We retain our reduce rating and a target price of £28.06.

Seymour Pierce also has a reduce rating on the shares. Analyst Mike Mitchell said:

Any possibility of market entry in the first half of 2011 (admittedly, not widely expected) has been removed. While our current expectation is that approval will ultimately be successful, the episode is a continued reminder of the slow and challenging regulatory hurdles present within the industry. AstraZeneca remains, in our view, an inadequately diversified business, exposed to the broader headwinds of the pharmaceutical industry.

But Shore Capital keeps its buy recommendation, with analyst Brian White saying:

Following on from the December complete response letter and the January 21 resubmission regarding the Brilinta new drug application, the FDA has provided a new action date of July 20. While there was a possibility that this could have been a Class 1 resubmission [that is, a two month review], we always felt that this was unlikely given the protracted nature of the FDA review process so far. It is worth noting that our revised forecasts in our recent research note we assumed a 12 month delay from our original expectation of a December launch.

via guardian.co.uk

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