GlaxoSmithKline plc (GSK) recently announced top-line results on its phase III candidate, albiglutide. Albiglutide is being investigated in 8 phase III studies named Harmony 1 to Harmony 8. The company said that it has received top-line data from 7 of the 8 studies.
The company reported positive results from the phase III Harmony 6 study, evaluating the efficacy and safety of albiglutide in patients with type II diabetes. The 26-week study compared albiglutide with preprandial insulin, both 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. Albiglutide showed a statistically significant reduction in HbA1c from the baseline. Results showed that the reduction in HbA1c for albiglutide and preprandial insulin was 0.82% and 0.66%, respectively. Additionally, the rate of weight loss was also higher in the albiglutide arm.
The current study results were a welcome change for the company as 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.
Meanwhile, Glaxo also announced top-line data from the other 5 Harmony studies (Harmony 1 to Harmony 5). Detailed data from these studies were not disclosed. However, the company hinted that the 2 year data from the studies were in line with the other two completed studies and would support the regulatory filings.
As mentioned above, Harmony 7 and Harmony 6 are complete. While Harmony 8 is expected to complete in mid – 2012, the remaining 5 studies are expected to be complete by early 2013.
Our Recommendation
While several products in the Pharmaceuticals segment are facing generic competition, the Consumer side of the business is performing well and should help drive top-line growth. Moreover, Glaxo’s diversified base and presence in different geographical areas should help support revenue growth.
Meanwhile, Glaxo’s restructuring initiative should help offset the impact of increasing generic competition in the next few years and help increase earnings at a faster pace than revenues. Share buybacks should also drive bottom-line growth.
We currently have a Neutral recommendation on Glaxo. The stock carries a Zacks #3 Rank (Hold rating) in the short run.
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