Glaxo Rises After Lung Drug Gets FDA Panel Backing: London Mover
Stock Chart for GlaxoSmithKline PLC (GSK)
GlaxoSmithKline Plc (GSK) rose to the highest price in 11 years after advisers to the U.S. Food and Drug Administration recommended that experimental treatment Breo Ellipta be approved to treat a lung disorder.
Glaxo rose as much as 4.1 percent to 1,673.5 pence, the highest intraday price since April 29, 2002. The shares were up 3.1 percent at 1,656 pence at 8:54 a.m. in London, giving the comp1ny a market value of 81.2 billion pounds ($124 billion).
The positive panel vote may mean a broad label approval for the drug, which was developed to treat chronic obstructive pulmonary disease, according to Bloomberg Industries analysts. The FDA is expected to decide whether to approve the treatment, which the London-based drugmaker licensed from Theravance Inc. (THRX), by May 12.
“The benign tone of the FDA briefing documents makes us materially more upbeat over the near-term approval,” Andrew Baum, an analyst at Citigroup, wrote in a note to investors. He recommends buying the shares.
It’s unlikely the FDA will block final approval despite side effects, Tim Anderson, an analyst at Sanford C. Bernstein, wrote in a note. He forecasts that sales of Breo Ellipta will reach 703 million pounds in 2020. Anderson has a “market perform” rating on the shares.
Glaxo is Theravance’s largest shareholder, with 27 percent of the South San Francisco, California-based company’s stock, according to data compiled by Bloomberg.
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