Glaxo Seeks Label Expansion Of Nucala In Pediatric Patients

GlaxoSmithKline plc (NYSE:GSK) announced the submission of a supplemental Biologics License Application (sBLA) for its asthma drug, Nucala (mepolizumab), to the FDA. The sBLA is seeking label expansion of Nucala as an add-on treatment in pediatric patients with severe eosinophilic asthma. The drug is already approved for adolescent and adult patients for the same indication

The sBLA is supported by data from a pediatric open-label study which evaluated Nucala for pharmacokinetics, pharmacodynamics and long-term safety in patients aged six to 11 years.

Notably, Nucala received approval for similar indication in Europe in August 2018. In December 2017, Nucala was also approved for eosinophilic granulomatosis with polyangiitis in the United States.

Glaxo’s shares have gained 13.7% so far this year, outperforming the industry’s rally of 8.2%.

The company is also developing the drug in additional indications. A phase III is currently evaluating Nucala in patients with nasal polyps. A potential approval in pediatric asthma patients and successful development in other indications will further boost the prospects of the drug, driving the company’s top-line.

However in September, Glaxo suffered a regulatory setback related to Nucala when the FDA issued a complete response letter for a sBLA seeking label expansion of Nucala in eosinophilic chronic obstructive pulmonary disease.

Meanwhile, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) and its partner Sanofi (NYSE:SNY) received approval for Dupixent as an add-on maintenance therapy for treating moderate-to-severe asthma with an eosinophilic phenotype last month. This is likely to intensify competitive pressures on Nucala. Notably, the companies are also developing Dupixent in pediatric patients.

Nucala is a key drug in Galxo’s portfolio of new respiratory drugs, Sales of Nucala were more than $500 million in the first nine months of 2018, registering growth of around 80%. However, Glaxo’s older inhaled respiratory products, particularly Seretide/Advair, are facing competitive and continued pricing pressure, consequently hurting sales.

Further, continued transition to newer products is affecting sales of Advair. The drug is expected to face generic competition in the United States this year, which will hurt sales further.

Zacks Rank & Stock to Consider

Glaxo currently carries a Zacks Rank #3 (Hold). A better-ranked large-cap drug stock is Johnson & Johnson (NYSE:JNJ) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

J&J’s earnings estimates increased from $8.14 to $8.16 for 2018 and from $8.61 to $8.66 for 2019 over the last 60 days. The company delivered a positive earnings surprise in the trailing four quarters, recording average beat of 1.65%.

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