AstraZeneca (AZN) has a strong presence in the diabetes care market. The company has identified five growth platforms, which include its diabetes franchise. The company has stepped up levels of investment in this area. The company has several diabetes products including Onglyza and Forxiga (both are approved for type II diabetes).
The company has collaborated with Bristol-Myers Squibb Company (BMY) for diabetes candidates/products. Apart from working on label expansion of Onglyza and Forxiga, the company is also focused on advancing its diabetes candidates.
In Nov 2013, AstraZeneca and Bristol-Myers announced that their diabetes candidate, Xigduo, has received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP). We note that Xigduo is a fixed dose combination of Forxiga and metformin hydrochloride.
The CHMP recommended approval of the candidate as an adjunct to diet and exercise to improve glycemic control for adults suffering from type II diabetes, who have shown inadequate treatment benefit to the metformin-based treatment regimen. Patients on Forxiga and metformin, as separate tablets, can also receive Xigduo.
Although AstraZeneca holds a strong position in the diabetes market, we note that the market is highly crowded with players like Novo Nordisk (NVO).
AstraZeneca, a large cap pharma company, carries a Zacks Rank #3 (Hold). Although we are pleased with the pipeline advancement at AstraZeneca, we remain concerned as generic competition has adversely impacted its revenues over the past few quarters. This has put significant pressure on the company. AstraZeneca is looking toward cost-cutting initiatives to drive the bottom line in the face of genericization.
Some better-ranked stocks in the large cap pharma space include Bayer (BAYRY), which carries a Zacks Rank #2 (Buy).