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Glaxo, Theravance rise on FDA review of lung drug

WASHINGTON (AP) -- Shares of Theravance and partner GlaxoSmithKline jumped Monday after the Food and Drug Administration posted its review of the companies' combination inhaler drug to treat lung disease.

THE SPARK: Glaxo and Theravance have asked the FDA to approve their experimental inhaler drug, Breo Ellipta, to treat complications of chronic lung disease. The ailment can cause a number of breathing difficulties, including chronic bronchitis and emphysema.

Breo is a combination of the corticosteroid, fluticasone furoate, and the long-acting beta-agonist, vilanterol. Drugs for breathing disorders typically combine inhalable steroids and beta-agonists to open lung airways and reduce cough. The combination drug is designed to be used with the Ellipta inhaler device.

The FDA posted its review of Breo Ellipta Monday morning ahead of a public meeting on Wednesday to review the drug. FDA scientists said the ingredient vilanterol clearly improved lung function compared with placebo. However, scientists said it was less clear whether the combination with fluticasone furoate was better than vilanterol alone. On Wednesday the agency will ask a panel of outside experts to weigh in on that question and whether the drug should ultimately be approved.

THE BIG PICTURE: Glaxo, a leader in respiratory medicine, already sells the asthma treatment Advair, its best-selling product with more than $4 billion in sales per year. Breo Ellipta is one of several experimental respiratory drugs on which the U.K. drugmaker and Theravance are collaborating.

THE ANALYSIS: Jefferies analyst Jeffrey Holdford said in a research note that the FDA review "marginally increased the probability of approval" for the combination drug. However, he added that the panel discussion at Wednesday's meeting will be important in determining whether to approve the drug. The FDA is not required to follow the advice of its panels, though it often does.

SHARE ACTION: Shares of South San Francisco, Calif.-based Theravance Inc. rose 19 percent, or $4.51, to $28.27 in trading. GlaxoSmithKline PLC's U.S.-listed shares rose 96 cents, or 2 percent, to $49.43 in trading. The broader markets were lower in afternoon trading.