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Glaxo's Flu Vaccine Gets U.S. Approval

Zacks Equity Research

GlaxoSmithKline (GSK) recently announced that the U.S. Food and Drug Administration (:FDA) has cleared its quadrivalent formulation of intramuscular Flulaval. Flulaval Quadrivalent has been approved for the prevention of influenza caused by types A and B strains in adults and children aged 3 years and above.

Flulaval Quadrivalent helps fight against two strains of influenza A and two strains of influenza B, thus providing it with an edge over the currently available trivalent Flulaval version, which is only approved for use in adults. We expect the approval of Flulaval Quadrivalent to enable the company to solidify its position in the market once it is made available next year.

We note that this is the second intramuscular quadrivalent influenza vaccine in Galxo’s portfolio. In Dec 2012, the FDA approved Fluarix Quadrivalent for treating adults and children aged 3 years and above. The intramuscular vaccine is now available to the customers.

Currently approved quadrivalent influenza vaccines include AstraZeneca’s (AZN) intranasal influenza vaccine FluMist Quadrivalent and Sanofi’s (SNY) quadrivalent formulation of Fluzone.

Glaxo currently holds a Zacks Rank #3 (Hold). The biggest near-term challenge for Glaxo will be to replace the revenues that will be lost to generic competition. Products like Valtrex, Lamictal, Imitrex, Requip, Combivir and Epivir are already facing declining sales due to intense generic competition.

Going forward, a major part of Glaxo’s revenues will be exposed to generic competition, as products like Pandemrix and Prepandrix are scheduled to lose exclusivity in the next few quarters.

We believe that the pipeline at Glaxo must deliver to counter the generic threat. We are impressed by Glaxo’s growth-by-acquisition strategy to combat the loss of revenues due to genericization of key products.

Meanwhile, stocks such as Actelion (ALIOF) currently look more attractive in the pharma space with a Zacks Rank #1 (Strong Buy).

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