CHMP Backs Glaxo's Nimenrix


GlaxoSmithKline (GSK) recently announced that its candidate, Nimenrix (MenACWY-TT), received a positive opinion from the European Medicines Agency’s (“EMA”) Committee for Medicinal Products for Human Use (“CHMP”). The CHMP recommended the approval of Nimenrix for active immunisation against invasive meningococcal disease caused by Neisseria meningitidis serogroups A, C, W-135 and Y.

The positive opinion on Nimenrix was based on safety and efficacy data from trials involving more than 8,000 patients (age group of 1 year and above) across 17 countries.

On March 2, 2011 Glaxo had announced the submission of the Marketing Authorisation Application (“MAA”) to the EMA for Nimenrix. A final decision from the EMA is expected in the coming months. Currently, Nimenrix is not approved or marketed anywhere in the world.

Disease Background

Neisseria meningitidis is a highly contagious disease, in which patients develop an infection in the thin lining that surrounds the brain and the spinal cord. The disease is most common in the sub-Saharan African region which expands from Senegal to Ethiopia. It is prevalent in dry season between December and June.

If left untreated, the disease can lead to severe disability and in approximately 50% cases even death. Early diagnosis coupled with antibiotic treatment reduces the death rate to 5% – 10%. Patients often die within 24 – 48 hours of the onset of symptoms. Thus, the prevention of the disease is critical. Currently available treatments include Novartis’ (NVS) Menveo, which is approved for patients aged 11 – 55 years.

Glaxo in Neutral Lane

We currently have a Neutral recommendation on Glaxo. The stock carries a Zacks #3 Rank (Hold rating) in the short run.

While several products in the Pharmaceuticals segment are facing generic competition, the Consumer side of the business is performing well and should help drive top-line growth. Moreover, Glaxo’s diversified base and presence in different geographical areas should help support revenue growth.

Meanwhile, Glaxo’s restructuring initiative should help offset the impact of increasing generic competition in the next few years and help earnings grow faster than revenues. Share buybacks should also drive bottom-line growth.

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