GlaxoSmithKline (GSK) recently announced positive results from the Harmony 6 phase III study, evaluating the use of albiglutide in type II diabetes patients. The company also announced that it has received data from the event driven meta-analysis conducted during the clinical trials for the assessment of cardiovascular safety.
Glaxo believes that available data is sufficient for the approval of albiglutide for the type II diabetes indication. The company plans to submit regulatory applications for albiglutide in early 2013.
The company reported encouraging results from the phase III Harmony 8 study, evaluating albiglutide versus Merck’s (MRK) Januvia (sitagliptin). Approximately 507 type II diabetes patients with renal impairment were enrolled in the study. The drugs were compared on the basis of reduction in HbA1c, an indicator of glucose level in the blood. Albiglutide showed a statistically significant reduction in HbA1c from the baseline. Results showed that the reduction in HbA1c for albiglutide and Januvia was 8.08% and 8.22%, respectively. Additionally, the rate of weight loss was higher in the albiglutide arm.
Albiglutide meta-analysis comprises the analysis of cardiovascular events observed during the 8 phase III Harmony studies and 1 phase II study. It was found that no excess cardiovascular risk was associated with the use of albiglutide.
We note that Harmony 8 is the third completed study out of the 8 Harmony phase III studies. In April 2012, the company reported positive results from the phase III Harmony 6 study, evaluating the efficacy and safety of albiglutide in type II diabetes patients. The study compared albiglutide with preprandial insulin, in combination with a long-acting insulin glargine. The drugs were compared on the basis of reduction in HbA1c, an indicator of glucose level in the blood. The study met its primary endpoint of showing non-inferiority to preprandial insulin.
In contrast, earlier in November 2011, the company had announced disappointing results from the phase III Harmony 7 study. The study failed to meet its primary endpoint of showing non-inferiority to Novo Nordisk’s (NVO) Victoza (liraglutide), although albiglutide did show a statistically significant reduction in HbA1c from the baseline. Results showed that the reduction in HbA1c for albiglutide and Victoza was 0.78% and 0.99%, respectively. The rate of weight loss was lower in the albiglutide arm.
In April 2012, Glaxo announced top-line data from the other 5 Harmony studies (Harmony 1 to Harmony 5). Detailed data from these ongoing studies (expected to complete by early 2013) will not be disclosed. However, the company hinted that two year data from the studies were in line with the other completed studies and would support the regulatory filings.
Our Recommendation
We currently have a Neutral recommendation on Glaxo. The stock carries a Zacks #4 Rank (Sell rating) in the short run. A major part of Glaxo’s revenues will be exposed to generic competition as multiple drugs are scheduled to lose exclusivity in the next few years.
We expect the company’s top line as well as gross margins to remain under pressure in the coming quarters. In addition to generic competition, EU pricing pressure will continue to affect sales.
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