FDA Okays Theravance, Glaxo Drug To Treat COPD - Update

Theravance Inc. (THRX) and GlaxoSmithKline Plc (GSK,GSK.L) said Friday the U.S. Food and Drug Administration has approved Breo Ellipta for the long-term, once-daily, maintenance treatment of airflow obstruction in patients with chronic obstructive pulmonary disease, or COPD. The FDA also approved the drug to reduce exacerbations in COPD patients with such a history.

Following the news, Theravance's stock gained 11 percent in afternoon trade on the Nasdaq.

Theravance expects that Breo Ellipta (fluticasone furoate and vilanterol inhalation powder) will be available in the U.S. during the third quarter of 2013.

With the FDA approval, Theravance is now obligated to make a milestone payment of $30 million to GlaxoSmithKline, as stipulated by a 2002 collaboration deal related to the drug.

The safety and efficacy of Breo Ellipta were evaluated in 7,700 COPD patients, with those treated showed better lung function and reduced exacerbations compared to placebo. The FDA approval was quite expected, as in April, a panel of the Agency favored such a decision.

Chronic obstructive pulmonary disease (COPD) is a term referring to two lung diseases, chronic bronchitis and emphysema, that are characterized by obstruction to airflow that interferes with normal breathing. Symptoms of the disease - mainly attributed to cigarette smoking - include chest tightness, chronic cough and excessive phlegm.

COPD is said to be the third most common cause of death in the U.S., and The National Heart, Lung and Blood Institute estimates that 13 million U.S. adults have COPD and another 11 million are undiagnosed or developing COPD.

Breo Ellipta works by decreasing inflammation in the lungs and helping the muscles around the airways of the lungs stay relaxed to increase airflow and reduce exacerbations in patients with COPD. The drug is a combination of fluticasone furoate, an inhaled corticosteroid, and vilanterol, a long-acting beta2-adrenergic agonist (LABA).

The FDA cautioned the drug carries a boxed warning that LABAs increase the risk of asthma-related death. The safety and efficacy of Breo Ellipta in patients with asthma have not been established, and hence it is is not approved for the treatment of asthma. The FDA also said Breo Ellipta should not be used as a rescue therapy to treat sudden breathing problems and is not recommended for people younger than 18 years.

Breo Ellipta may cause serious side effects, including increased risks of pneumonia and bone fractures. The most common side effects from usage of the drug included inflammation of the nasal passage, upper respiratory tract infection, headache, and oral candidiasis.

Theravance's stock is trading at $34.94, up 11.61%, on a volume of 3.5 million shares on the Nasdaq.

GlaxoSmithKline is trading at $51.50, up 1.59%, on a volume of 2.5 million shares on the NYSE. In London, the stock closed at 1,670.00 pence, up 1.55%, on a volume of about 7 million shares.

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