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Update on Glaxo's Vaccine Portfolio

Zacks Equity Research

GlaxoSmithKline (GSK) boasts of a strong vaccine portfolio, which includes vaccines like Infanrix/Pediarix, Rotarix, Synflorix and Cervarix. Glaxo has a strong vaccine segment, which generated sales of £1.5 billion in the first half of 2013, approximately 11% of the total product sales of the company.

Glaxo’s vaccine pipeline comprises several late-stage candidates including MAGE-A3 for melanoma and non small cell lung cancer and RTS,S for the prevention of malaria.

Data from a phase III study on RTS,S showed that the vaccine is effective in preventing malaria up to 18 months after vaccination of young children and infants. Additional data from a follow-up study at 32 months and the impact of a fourth booster dose administered 18 months after the initial three doses are expected in 2014.

Glaxo plans to submit a regulatory application for RTS,S to the European Medicines Agency (:EMA) in 2014 with an application for the Committee for Medicinal Products for Human Use’s (CHMP) scientific opinion. A positive CHMP opinion on RTS,S will make it easier for Glaxo to submit marking applications in African countries. A final regulatory decision from the European Commission (EC) is expected in 2015.

Its crucial for Glaxo to get RTS,S approval in African countries as approximately 660,000 children die every year in sub-Saharan Africa due to malaria.

Glaxo, a large cap pharma company, carries a Zacks Rank #3 (Hold). We are pleased with Glaxo’s pipeline development efforts. A number of pipeline-related news is expected in the coming quarters including the U.S. Food and Drug Administration’s (:FDA) decision of UMEC/VI (PDUFA date: Dec 18, 2013). Given the declining sales due to generic competition, we believe Glaxo’s pipeline is under pressure.

Other large-cap pharma stocks such as Roche (RHHBY), Bayer (BAYRY) and Allergan Inc. (AGN) currently appear to be more attractive. While Roche carries a Zacks Rank #1(Strong Buy), Bayer and Allergan carry a Zacks Rank #2 (Buy).

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