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Theravance/Glaxo Commence Global Late stage Study on COPD

Zacks Equity Research

Theravance, Inc. (THRX) and partner GlaxoSmithKline (GSK) announced the commencement of a phase III study (IMPACT: n=10,000) to evaluate the safety and efficacy of a triple combination treatment in patients suffering from chronic obstructive pulmonary disease (:COPD). The double-blind, three-arm, parallel group, 52-week study is evaluating the combination of an inhaled corticosteroid (fluticasone furoate), a long-acting muscarinic antagonist (umeclidinium) and a long-acting beta2-adrenergic agonist (vilanterol) in COPD patients.

The IMPACT study is the first in a program designed to evaluate the triple combination in patients suffering from this chronic respiratory ailment. The study is designed to assess whether treatment with the above combination can bring down the annual rate of moderate and severe exacerbations compared with the marketed COPD treatments, Relvar/Breo Ellipta and Anoro Ellipta. While Relvar/Breo Ellipta is a combination of an inhaled corticosteroid and a long-acting beta2-adrenergic agonist, Anoro Ellipta is a combination of a long-acting muscarinic antagonist and a long-acting beta2 agonist.

Theravance and Glaxo were in the news recently when Anoro Ellipta was approved in Japan for the relief of symptoms due to airway obstruction in COPD patients. The COPD treatment will be launched in Japan by Sep 30, 2014. The Japanese approval triggered a payment of $10 million from Theravance to Glaxo. The collaboration between the two companies was inked in 2002. We note that Anoro Ellipta is already approved in the U.S., EU and Canada.

Breo Ellipta was cleared by the FDA in May 2013 as a long-term maintenance therapy of airflow obstruction and for bringing down exacerbations in patients suffering from COPD. The drug is also available in Canada for the COPD indication. The treatment is also approved in the EU (trade name: Relvar Ellipta) for asthma and COPD. Relvar Ellipta is available in Japan for treating patients suffering from bronchial asthma where a concurrent use of inhaled corticosteroid and long-acting inhaled beta2 agonist is needed. Apart from Anoro Ellipta and Breo Ellipta, the candidates under development through the Glaxo/Theravance partnership also hold promise.

We remind investors that Theravance had split into two independent, listed companies last month. While Theravance, Inc., a royalty management company, deals with products/candidates under the Glaxo partnership, Theravance Biopharma (TBPH) focuses on the discovery, development and commercialization of small-molecule therapies targeted towards areas of high unmet medical need.

Glaxo carries a Zacks Rank #4 (Sell) while Theravance is a Zacks Ranked #2 (Buy) stock. A better-ranked stock in the healthcare space is Actelion (ALIOF), sporting a Zacks Rank #1 (Strong Buy).

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