Glaxo Rises to Highest Since 2002 on FDA Panel BackingAllison Connolly and Anna Edney
GlaxoSmithKline Plc 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 3 percent to 1,658 pence at the close of trading in London, the highest price since April 30, 2002. Theravance Inc., which is licensing the drug to Glaxo, rose 16 percent to $32.56 at the close in New York, its highest price since July
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, by May 12.
“While the votes were not unanimous, we believe the outcomes were more favorable than the actual tally, given the rationale behind some of the No votes,” M Ian Somaiya, an analyst at Piper Jaffray & Co. in New York, said in a note to clients today.
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 London-based Glaxo’s shares.
Patients who took Breo in clinical trials had increased risk of pneumonia and fractures, similar to other combination products to treat chronic obstructive pulmonary disease. The dry powder inhaler is a combination of the compound vilanterol and a corticosteroid.
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.