AstraZeneca plc (AZN) recently announced that its biologics unit, MedImmune, received yet another Complete Response Letter (CRL) from the US Food and Drug Administration (FDA) for motavizumab, which is being studied for the prevention of serious respiratory syncytial virus (RSV) disease in high-risk infants.
In the letter, the regulatory body has asked AstraZeneca to conduct another trial to support the risk/benefit profile of the candidate in infants with high-risk of RSV. We believe the company will review the CRL thoroughly before coming up with a decision on the next course of action.
The CRL does not come as a surprise as earlier, in June, the FDA’s Antiviral Drugs Advisory Committee had voted against the approval of motavizumab for the prevention of serious RSV disease in high-risk infants. The regulatory path for motavizumab has not been smooth with AstraZeneca having already received a CRL for the candidate earlier, in December 2008. The response to the CRL was submitted by the company in December 2009.
We believe that the timely approval of motavizumab would have helped accelerate sales of the Synagis/motavizumab franchise for the 2011/2012 RSV season. Synagis, a monoclonal antibody for the prevention of respiratory syncytial virus in children, is a key product in AstraZeneca’s RSV franchise.
A common respiratory infection, RSV, occurs during infancy or childhood. It is the leading cause of lower respiratory tract infections in infants in the United States. It is estimated that up to 125,000 infants are hospitalized every year in the country with severe RSV infections.
We currently have a Zacks #2 Rank (short-term Buy rating) on AstraZeneca, given the June 29 favorable court ruling on Crestor’s US patent (which was upheld and validated until 2016), a major win for the company, and the FDA Committee recommending in favor of the approval of Brilinta for acute coronary syndrome.
Longer term, we have a Neutral recommendation on AstraZeneca. While the delay in motavizumab’s approval is disappointing, we believe that investors are more focused on the FDA’s response on the approvability status of Brilinta. A final decision should be out by October 19.
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