Abbott Labs (ABT) and AstraZeneca (AZN) recently announced that they no longer intend to continue with the development of Certriad, a fixed-dose, single pill formulation of Abbott Lab’s next-generation triglyceride lowering pill, TriLipix and AstraZeneca’s powerful statin drug, Crestor.
The companies were looking to position this new combination fenofibrate-statin as the best HDL-raising, LDL/triglyceride-lowering efficacy available.
Abbott Labs and AstraZeneca decided to discontinue development of the candidate based on a review of the complete response letter (CRL) received from the US Food and Drug Administration (FDA) and the delay in the candidate’s approval.
The companies were initially planning to launch Certriad in the first half of 2010. However, given the complete response letter, Certriad’s approval could have been delayed by anything ranging from 6 months to more than a year, depending on the FDA’s requirements.
In its complete response letter, the FDA had asked for additional information. Based on all these factors, Abbott Labs and AstraZeneca decided that the development of Certriad is no longer commercial attractive.
The scrapping of the development of Certriad is a disappointment for both companies which were looking to drive sales of their cardiovascular franchises by launching Certriad. The co-development and license agreement between Abbott Labs and AstraZeneca will end on January 22, 2011. Abbott Labs does not expect the discontinuation of the development of Certriad to affect its 2010/2011 earnings.
Neutral on Abbott Labs
We currently have a Neutral recommendation on Abbott Labs, which is supported by a Zacks #3 Rank (short-term Hold rating). Despite lingering challenges like the impact of US healthcare reform, product recalls, foreign exchange headwinds and EU pricing austerity, we believe Abbott Labs’ strong business segments, contributions from recent acquisitions and impressive late-stage pipeline should help the company deliver strong earnings growth.
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