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Actavis' Women Health Biz Update

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Pipeline updates are highly awaited events in the pharma/biotech sector as they play an important role in deciding whether or not to invest in a particular company. Consequently, pipeline-related setbacks have the potential to put a stock behind the pack.

Last week, Actavis plc (ACT) suffered a setback when the U.S. Food and Drug Administration (:FDA) issued a complete response letter (CRL) for the New Drug Application (:NDA) of its oral contraceptive candidate. The company is looking to get its progestin-only transdermal contraceptive patch (norethindrone transdermal delivery system) approved for the prevention of pregnancy.

The U.S. regulatory body has asked for more data on Actavis’ contraceptive patch. The FDA raised questions primarily on the differences in size and formulation of the transdermal patch used in the studies and the to-be-marketed product.

Actavis now intends to discuss the issues raised in the CRL with the FDA. The NDA was submitted on Feb 26, 2013, and included data from a 12-month, multi-center, open-label study. The CRL comes as a huge blow to the company’s efforts to strengthen its women’s health business.

Meanwhile, Actavis filed an Abbreviated New Drug Application (ANDA) for its ethinyl estradiol and etonogestrel vaginal ring with the FDA last week. Ethinyl estradiol and etonogestrel vaginal ring is the generic version of Merck & Co.'s (MRK) NuvaRing, which is an estrogen/progestin combination hormonal contraceptive approved for the prevention of pregnancy.

Actavis believes that it is the first to file an ANDA for the generic version of NuvaRing. Consequently, it should enjoy 180 days of marketing exclusivity. As per data released by IMS Health, NuvaRing grossed total U.S. sales of around $560 million for the 12 months ending Oct 31, 2013.

We note that Merck has filed a lawsuit (under the provisions of the Hatch-Waxman Act) against Actavis seeking to prevent the latter from commercializing its generic version of NuvaRing before the expiration of U.S. Patent No 5,989,581.

Actavis currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Dr. Reddy's Laboratories Ltd. (RDY) and Vanda Pharmaceuticals, Inc. (VNDA). Both stocks carry a Zacks Rank #1 (Strong Buy).

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