Another Setback for AstraZeneca - Analyst Blog

AstraZeneca (AZN) suffered another pipeline setback recently with the company announcing that it no longer intends to develop motavizumab for the prophylaxis of serious respiratory syncytial virus (RSV) disease.

The company has requested the US Food and Drug Administration (FDA) to withdraw the Biological License Application (BLA) for the candidate. AstraZeneca expects to incur an impairment charge of $445 million in the fourth quarter of 2010 due to the discontinuation of the development of the candidate. The impairment charge, however, is not expected to impact the company's core earnings.

Rough Regulatory Path for Motavizumab

AstraZeneca's decision does not come as a major surprise as the regulatory process for motavizumab has been rocky. Earlier this year, the FDA's Antiviral Drugs Advisory Committee had voted against the approval of motavizumab for the prevention of serious respiratory syncytial virus (RSV) disease in high-risk infants. Soon thereafter, the FDA issued a second complete response letter (CRL) asking for additional clinical data.

Motavizumab, a next-generation product, was being developed to drive sales of AstraZeneca's RSV franchise. Synagis, a monoclonal antibody for the prevention of respiratory syncytial virus (RSV) in children, is the key product in the company's RSV franchise. Synagis sales totaled $1.1 billion in 2009. The timely approval of motavizumab would have helped accelerate sales of the Synagis/ motavizumab franchise for the 2011/2012 RSV season. While AstraZeneca is no longer developing motavizumab for the prophylaxis indication, the company intends to continue developing it for other RSV treatment.

Besides motavizumab, AstraZeneca has other candidates in its pipeline that are being developed for RSV. RSV is a common respiratory infection occurring during infancy or childhood. It is the leading cause of lower respiratory tract infections in infants in the United States. It is estimated that up to 125,000 infants are hospitalized with severe RSV infections in the US. The successful development and launch of AstraZeneca's RSV pipeline candidates would help drive sales of the Infection franchise, which came in at $2,631 million in 2009.

The discontinuation of motavizumab's development for the prophylaxis indication is the second pipeline setback faced by AstraZeneca over the past few days. The company recently suffered a major setback with the FDA issuing a complete response letter (CRL) for Brilinta (ticagrelor). The company was seeking approval for the use of Brilinta in the treatment of acute coronary syndrome (ACS).

The agency has asked AstraZeneca to conduct additional analyses of data from the Study of Platelet Inhibition and Patient Outcomes (PLATO). The PLATO trial was conducted to determine whether Brilinta was more effective in improving cardiovascular outcomes in ACS patients compared to Bristol-Myers Squibb Co./Sanofi-Aventis' (BMY/SNY) Plavix (clopidogrel).

The approval of Brilinta for ACS would be a major boost for AstraZeneca as several major products are either already facing generic competition or will face generic risk in the 2010 to 2013 time frame. The company is currently reviewing the CRL and intends to respond to the agency soon.

 
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