Zacks_Analysts' Blog : FDA Panel Backs Anti-Epileptic Drug - Analyst Blog

GlaxoSmithKline (GSK) and Valeant Pharmaceuticals International (VRX) recently received encouraging news in the form of a positive recommendation from a US Food and Drug Administration (FDA) advisory panel regarding their epilepsy candidate, ezogabine. Glaxo and Valeant are seeking approval for ezogabine both in the US and the EU for the treatment of adults with partial-onset seizures.

The FDA’s Peripheral and Central Nervous System Drugs Advisory Committee reviewed the safety and efficacy of the drug. The committee voted unanimously in favor of ezogabine’s efficacy for the treatment of partial-onset seizures in adults where other treatments have failed.

The committee also reviewed the safety data on ezogabine. Questions had been raised regarding urinary retention, infection and kidney stones associated with the use of ezogabine. About 0.9% of patients in the ezogabine arm suffered from urinary retention compared to 0.5% of patients in the placebo arm. While most of the committee members voted in favor of patient monitoring for the reduction of the occurrence of urinary retention, the members voted unanimously that the same would not be needed for infection and kidney stones.

Ezogabine has been developed under a worldwide license and collaboration agreement between Glaxo and Valeant. The approval of the candidate would be a major boost for both companies, especially Valeant.

It is estimated that more than 2 million people in the US have experienced an unprovoked seizure or been diagnosed with epilepsy. While most of these episodes can be controlled with medicines, it has been observed that about 25% - 30% of people with epilepsy will continue to experience seizures even after receiving treatment.

Although several treatments (such as Pfizer’s (PFE) Neurontin and Lyrica, Glaxo’s Lamictal, UCB Pharma’s (UCBJF) Keppra and Johnson & Johnson’s (JNJ) Topamax among others) are currently available for epilepsy, ezogabine should be able to carve a niche for itself due to its differentiated mechanism of action. A response from the FDA on the approvability of ezogabine should be out by Aug 30, 2010.

Our Take

We currently have a Zacks #2 Rank ('Buy') on Valeant. We expect investor focus to remain on the proposed merger of Valeant and Biovail Corp. (BVF) and the upcoming FDA action date for ezogabine. A positive response from the FDA by Aug 30 could lead to the product launch in the first quarter of 2011. Moreover, Valeant is scheduled to launch a significant number of new products in the second half of 2010, which should help boost the top line.