Experts: Keep Glaxo Drug on the Market - TheStreet

Experts: Keep Glaxo Drug on the Market

An FDA panel votes 22-1 to keep Avandia available.
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Updated from July 30

GlaxoSmithKline

(GSK) - Get Report

rose on Tuesday, one day after advisers to the Food and Drug Administration said the controversial diabetes drug Avandia should stay on the market.

However, that 22-1 vote in favor of Avandia was accompanied by a 20-3 vote agreeing with certain research that says the drug increases the risk of a heart attack. On Monday, the advisers recommended more restrictions on Avandia, whose label has been the subject of increasingly strengthened warnings over the years.

The advisers didn't take a formal vote on restrictions, although some recommended a "black box" label, the FDA's strongest alert, for cardiovascular risk. The FDA isn't bound by its advisory panels' recommendations, but it usually follows them.

It's rare for a company's stock to rise when FDA advisers seek more restrictions on a drug, but investors were relieved that the experts didn't advocate a ban. The shares were up $1.93, or 3.9%, to $51.33 on heavier-than-average trading.

Several critics said the drug should be pulled from the market, and two high-ranking FDA officials told panel members that Avandia should be banned because the risks outweighed the benefits.

But a third FDA official said there was a "fundamental disagreement" within the agency about Avandia. Last month, Dr. Andrew von Eschenbach, the FDA commissioner, told a congressional hearing that Avandia should receive a black box warning for cardiovascular risk.

Regardless of the FDA's verdict, it appears Avandia's sales growth has stalled. Although doctors don't like to switch patients in midtherapy if a drug is working well and not causing side effects, the furor over Avandia is bound to discourage some physicians from initiating the treatment.

"We don't expect prescriptions to return to anywhere near

previous levels," says Heather Brilliant, a pharmaceuticals analyst for Morningstar, the independent research firm, in a research report. "We think doctors will continue to be hesitant when it comes to prescribing Avandia until the firm can produce solid evidence that supports long-term benefits of the drug that offset the potential for cardiovascular risks."

The good news, Brilliant says, is Avandia's continued sales and a limit on potential liability "since the drug is still available and the advisory committee indicated that the data on Avandia are mixed."

The sales damage is already significant.

Avandia

has been under siege ever since a May 21 article in the

New England Journal of Medicine

said people taking the blood-sugar control pill had a higher -- and statistically significant -- risk of having a heart attack vs. people taking other diabetes pills or placebo.

Second-quarter

sales of Avandia fell 22% worldwide and 31% in the U.S. Worldwide sales were $692 million, which included $198 million for Avandamet and Avandaryl. These drugs combine Avandia's main ingredient with other diabetes medications. Last year, the Avandia family produced $3 billion in sales, or about 7% of the company's corporate revenue.

Glaxo praised the advisers' 22-1 vote for Avandia and ignored the 20-3 vote expressing concern about cardiovascular risk. Glaxo said it would "continue to provide information to the FDA to assist in the agency's final decision-making."

Glaxo also noted that the FDA advisers "declined to comment on comparative risk of Avandia to other oral anti-diabetic medicines."

When the FDA first said advisers would review Avandia, it said the discussion would include the class of drugs known as thiazolidinediones, or TZDs. The other TZD on the market is Actos from Japan's

Takeda Pharmaceutical

.

Advisers didn't offer a recommendation for Actos. Last month, FDA Commissioner von Eschenbach said all TZDs, including Actos, should carry a black box warning.

Glaxo has maintained that Avandia's side effects are comparable to those of most other oral diabetes medications. At the advisory panel meeting, Glaxo

continued its defense, saying the drug is "safe and effective when used appropriately."

The company has conceded that Avandia poses a higher risk of congestive heart failure, which is a weakening of the heart's pumping power. It says such a side effect is

well-known for all TZDs.

Avandia's label already carries a warning about the risk of fluid retention "which may exacerbate or lead to heart failure." The label said this problem is found with all TZDs, and the Actos label contains a similar warning. However, studies say Actos doesn't have the same heart-attack risk.

If both drugs receive a black box warning, the comparative damage for Avandia probably would be reduced.

Meanwhile, sales of Actos have benefited from Avandia's woes, and so have sales of several other types of diabetes drugs. Diabetics have several choices, and doctors often prescribe more than one medication. Some drugs stimulate the pancreas to produce more insulin and some tell the liver to produce less glucose.

TZDs are insulin-sensitizers, which help the body to better process insulin.