Setback for Valeant Epilepsy Drug - Analyst Blog

Valeant Pharmaceuticals International (VRX) and GlaxoSmithKline plc (GSK) recently announced that the US Food and Drug Administration (FDA) issued a complete response letter (CRL) for the new drug application (NDA) for their epilepsy candidate, ezogabine. The regulatory body said that the CRL was for non-clinical reasons. Valeant and Glaxo are currently evaluating the letter and plan to file a response to the FDA in 2011.

The companies are seeking approval for ezogabine both in the US and the EU for the treatment of adults with partial-onset seizures. The NDA was submitted to the FDA on October 30, 2009, while the Marketing Authorization Application was submitted to the European Medicines Evaluation Agency on November 17, 2009.

Ezogabine's Regulatory Pathway

Earlier, in August, Glaxo and Valeant had received a positive recommendation from an FDA advisory panel regarding ezogabine. The FDA's Peripheral and Central Nervous System Drugs Advisory Committee had reviewed the safety and efficacy of the drug and voted unanimously in favor of ezogabine's efficacy for the treatment of partial-onset seizures in adults where other treatments failed. However, later during the month, the FDA extended the review date for the candidate by three months.

Ezogabine has been developed under a worldwide license and collaboration agreement between Glaxo and Valeant and the FDA approval would be a major boost for both companies, particularly for Valeant.

Competitive Scenario

Currently available epilepsy treatments include drugs like Pfizer Inc.'s (PFE) Neurontin and Lyrica, Glaxo's Lamictal, UCB Pharma's (UCBJF) Keppra and Johnson & Johnson's (JNJ) Topamax. We believe that ezogabine, once approved, should be able to carve a niche for itself due to its differentiated mechanism of action.

Neutral on Valeant

We currently have a Neutral recommendation on Valeant. The company faces major challenges with its neurology product Diastat and HIV drug ribavirin exposed to generic competition. We believe the company needs to enter into suitable deals in order to compensate for the loss of revenues resulting from the genericization of Diastat and ribavirin.

The recent merger with Biovail Corp. has helped boost and diversify Valeant's product portfolio. Biovail also has an alliance with Teva Pharmaceutical Industries Ltd. (TEVA) for the marketing of generic products.

 
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