Recently, GlaxoSmithKline (GSK) exercised its option to obtain exclusive license regarding further development and commercialization of ChemoCentryx’s Traficet-EN, a specific CCR9 antagonist. The drug candidate is meant for the treatment of inflammatory bowel diseases Incorporatedluding Crohn’s disease.

Under the terms of the agreement, ChemoCentryx will receive an option exercise fee of $35 million as well as milestone payments. In addition, on successful commercialization, ChemoCentryx will receive royalties on sales of the drug. Following the option exercise, Glaxo will be responsible for further development of Traficet-EN.

We believe Glaxo is strengthening its pipeline to meet the patent challenges in the forthcoming period. Several products like Valtrex, Coreg IR, and Requip are all facing declining sales due to intense generic competition. The entry of generic versions of Merck’s (MRK) Cozaar is likely to stunt sales of Coreg further. Going forward, a major part of Glaxo’s revenues will be exposed to generic competition as products like Advair, Combivir, Epivir, Relenza, Avandia, Avandamet, Boniva and Ziagen are all scheduled to lose exclusivity in the next few years.

Given the situation, Glaxo has made significant progress with its late-stage pipeline. We think Glaxo possesses one of the strongest late-stage pipelines among large-cap pharma players. The company’s main focus areas include biopharmaceuticals, immuno-inflammation, infectious diseases, metabolic pathways, neuroscience, oncology, ophthalmology and respiratory. Glaxo has a number of potential billion-dollar products for cardiovascular disease, oncology, pain management, vaccines, central nervous system disorders and gastrointestinal disease.

We believe that Glaxo remains interested in accelerating growth through acquisitions and partnering arrangements. The company has also been active in expanding its presence in emerging markets as evident by its deals with companies like Bristol-Myers Squibb (BMY) and Dr. Reddy’s Laboratories (RDY), among others. We are Neutral on the stock.

Zacks Investment Research

1. ($GSK) GlaxoSmithKline Invests in Patch VaccinesGlaxoSmithKline (GSK) recently entered into a strategic alliance with Intercell (INRLF.PK) for the development and...
2. (GILD) Gilead Sciences-GlaxoSmithKline Deal Targets AsiaRecently, Gilead Sciences (GILD) entered into a licensing agreement with GlaxoSmithKline (GSK) to commercialize Viread...
3. (GSK) GlaxoSmithKline Earns FDA Approval for Arzerra, a Chronic Lymphocytic Leukemia DrugGlaxoSmithKline (GSK) and Denmark-based Genmab received some good news with the US Food and Drug...
4. (GSK) GlaxoSmithKline Collaborates With ProsensaYesterday, GlaxoSmithKline (GSK) entered into an exclusive worldwide collaboration with Prosensa for the development and...
5. (GSK) GlaxoSmithKline Plc Expands Presence in China With Jiangsu Walvax Biotech Joint VentureGlaxoSmithKline Plc (GSK) continues to expand its presence in China and other emerging markets. Earlier...
6. (GSK) GlaxoSmithKline Moves Ahead With CervarixYesterday, GlaxoSmithKline (GSK) received a favorable recommendation from the US Food and Drug Administration’s (FDA)...

Search Posts by Tag: BMY | Bristol-Myers Squibb Company | Dr. Reddy's Laboratories Limited | Glaxosmithkline plc | GSK | Merck & Company Inc | MRK | RDY | Drug Manufacturers - Major | Healthcare

RSS Feeds by Tag: BMY | Bristol-Myers Squibb Company | Dr. Reddy's Laboratories Limited | Glaxosmithkline plc | GSK | Merck & Company Inc | MRK | RDY | Drug Manufacturers - Major | Healthcare |

Other Posts by: vitalstocks | RSS Feed for this author