GlaxoSmithKline plc (GSK) recently announced a revision in the US prescribing information and medication guides for all rosiglitazone-containing medicines, which include Avandia, Avandamet and Avandaryl. The revised labels of these type II diabetes treating drugs are required to include additional safety information and restrictions on the use of these medicines.
The revised labels restrict the use of these drugs to patients who are already taking a rosiglitazone-containing medicine or new patients who are unable to achieve adequate glycemic control on other diabetes medications. The drugs can also be used by patients who in consultation with their physicians have decided not to take Takeda Pharmaceuticals’ Actos (pioglitazone) or other pioglitazone-containing medicines for medical reasons.
In September last year, the US Food and Drug Administration (FDA) had asked Glaxo to set up a Risk Evaluation and Mitigation Strategy (REMS) program for patients taking this class of drugs. The company is currently working with the regulatory body to finalize the details of the program.
Meanwhile, the European Medicines Agency (EMA), taking a far more stringent step, suspended the marketing authorization of all rosiglitazone-containing drugs in September 2010. As a result of this suspension physicians will switch their patients to competing drugs, namely Actos and Merck & Co. Inc.’s (MRK) Januvia.
Avandia is a thiazolidinedione anti-diabetic agent indicated as an adjunct to diet and exercise to improve glycemic control in adults with type II diabetes. The product first came under scrutiny in 2007 when the New England Journal of Medicine published an analysis of studies conducted with people who had taken Avandia.
According to the analysis, a higher risk of heart attack was observed in patients taking Avandia compared to patients taking other diabetes drugs or no diabetes medication. Avandia’s label was revised to include a warning regarding the potential cardiovascular risk.
Following the emergence of safety concerns related to the use of Avandia, GlaxoSmithKline’s Avandia franchise saw sales plunging to $682 million in 2010 from $2.4 billion in 2007.
Our Take
We currently have a Neutral recommendation on GlaxoSmithKline, which is supported by a Zacks #3 Rank (short-term Hold rating). We view the revised labeling on Avandia and other rosiglitazone-containing medications as a major negative given the fact that it will adversely affect the already dwindling sales of the drug.
However, the company’s diversified base and presence in various geographical areas should provide cushion against any top-line risk.
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