By Toni Clarke
WASHINGTON (Reuters) - An experimental treatment for smoking-related lung damage received a better-than-expected initial review from the U.S. Food and Drug Administration, potentially paving the way for a recommendation in favor of approval when an outside panel of experts meets to review the drug later this week.
The drug, Breo, is an inhaled treatment for chronic obstructive pulmonary disease (COPD), a condition that includes emphysema, chronic bronchitis or both. COPD is the third leading cause of death in the United States, according to federal data.
Breo was developed by GlaxoSmithKline Plc, and Theravance Inc, whose shares jumped on Monday. GSK's shares rose 3.9 percent to 1,630 pence on the London Stock Exchange, while shares of the smaller Theravance surged 17.4 percent to $27.90 in afternoon trading on Nasdaq.
In documents posted on the FDA's website, the reviewers said Breo's overall safety was consistent with similar drugs, which came as a relief to investors who were concerned that the agency might dwell on an increase in the number of cases of pneumonia in patients treated with Breo.
Still, the reviewers had mixed opinions about the drug's efficacy, noting some inconsistencies in the clinical data showed that its ability to limit COPD flare-ups, which can damage lungs, was clearer than its ability to improve breathing.
Breo consists of a corticosteroid, fluticasone furoate, which reduces inflammation, and a novel long-acting beta-agonist, or LABA, called vilanterol, which is designed to open the airways. The product is inhaled through a palm-sized device called Ellipta.
The FDA's advisory panel will be examining the drug on Wednesday to decide whether the benefits of Breo outweigh the risks, and whether the corticosteroid adds much benefit to vilanterol. On that matter the reviewers appeared to have questions.
Overall, however, investment analysts considered the reviewers' concerns mild.
"The FDA review is benign and a relief, given the issues that emerged in this clinical trial program," said Alistair Campbell, an analyst at Berenberg Bank, in a research note, adding that the advisory panel meeting may be less contentious than feared, giving Breo a "very good chance of a positive recommendation."
REVIEW BOLSTERS VIEW OF ANORO
The better-than-expected tone increased investor optimism about another - potentially more profitable - COPD drug the two companies are developing together called Anoro, an inhaled combination of vilanterol, and umeclidinium, a long-acting muscarinic receptor antagonist, or LAMA, which analysts expect could generate peak annual sales of nearly $1.4 billion, according to Thomson Reuters data.
Breo was tested in two doses, the lower of which involved fewer cases of pneumonia. Glaxo is filing its application based on the lower dose but investors were concerned the FDA reviewers might question that selection, a fear that was put to rest.
"In addition to strong positive implications for the upcoming panel, we believe the briefing document essentially eliminates the worst-case scenario that dose selection of vilanterol is questioned or if there is a safety surprise which could negatively affect GSK's other filings such as Anoro," said Howard Liang, an analyst at Leerink Swann.
Breo, or Relvar as it would be called outside the United States, would, if approved, compete with, and potentially ultimately supplant, GSK's twice-daily asthma and COPD drug Advair, a roughly $8 billion-a-year drug that contains the steroid fluticasone propionate and the long-acting beta-agonist salmeterol.
Breo would also compete with AstraZeneca Plc's twice-a-day Symbicort, an inhaled combination of the corticosteroid budesonide, and the long-acting beta-agonist formoterol.
Glaxo and Theravance are hoping the once-daily delivery of Breo will make their drug more attractive to patients.
Anoro would be a more unique product. It would be the first combination LAMA/LABA on the market and would compete with Spiriva, also known as tiotropium bromide, the only marketed LAMA on the market. Spiriva is made by Pfizer Inc and Boehringer Ingelheim.
Glaxo owns 27 percent of Theravance. Speculation has risen that Glaxo might buy the remaining 73 percent to gain full control of their portfolio of jointly developed respiratory drugs.
(Editing by Maureen Bavdek, Matthew Lewis and Jan Paschal)