Shire plc (SHPGY) recently announced that its drug Lialda has been cleared by the US Food and Drug Administration (FDA) for an expanded indication as a maintenance therapy for the remission of ulcerative colitis. Lialda is currently marketed for the induction of remission in patients with active, mild-to-moderate ulcerative colitis. Ulcerative colitis refers to an inflammatory disease characterized by bloody diarrhea and sometimes painful abdominal cramping.
The expanded approval by the US Food and Drug Administration (FDA) was based on data from a multicenter, randomized, double-blind, active comparator, non-inferiority study (n=826), which showed that Lialda was effective and safe in maintaining endoscopic remission. The drug was approved for the same indication in Canada in February 2011.
Shire has a licensing agreement with Mochida Pharmaceutical Co., Ltd. regarding Lialda besides an exclusive license to develop and sell Lialda in Japan.
Shire is studying Lialda for other indications as well including diverticulitis, a colonic disease. The company expects to file a marketing application with the regulatory authorities in 2012 and launch Lialda for that additional indication in 2013.
Our Recommendation
We currently have a long-term Neutral recommendation on Shire. The company carries a Zacks #2 Rank (Buy rating) in the short term. Shire focuses on a number of therapeutic areas, including attention deficit and hyperactivity disorder, human genetic therapies, and gastrointestinal disorders. We are encouraged by Shire’s wide array of products. Shire’s broad portfolio and lack of significant patent cliffs position it well for further growth. Longer term, however, we believe that Shire will need to expand its pipeline to sustain growth.
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