Actavis plc (ACT) has received mixed news on the regulatory front. While the FDA has issued a complete response letter (CRL) for the company’s hypertension treatment, it has given its approval for the Alzheimer’s drug.
Actavis faced a regulatory setback with the FDA issuing a CRL for the new drug application (NDA) for the fixed-dose combination (FDC) of Bystolic (nebivolol) and Diovan (valsartan), for the treatment of hypertension. Meanwhile, Actavis has not disclosed the details of the letter. The company will decide on the necessary action only after evaluating the content of the same.
However, the regulator’s decision does not come as a surprise as in September this year, the FDA’s Cardiovascular and Renal Drugs Advisory Committee had voted (6:4) against the approval of the candidate.
On a brighter note, Actavis and partner Adamas Pharmaceuticals Inc. (ADMS) announced the FDA’s approval of their NDA for Namzaric – the first FDC of Namenda extended release (XR) and Aricept (donepezil). Namzaric is approved for the treatment of moderate to severe dementia of the Alzheimer's type.
We remind investors that Actavis is in collaboration with Adamas for the development of the FDC. While Actavis has commercialization rights in the U.S., rest of the world commercialization rights are with Adamas.
Actavis expects to launch Namzaric in the U.S. in the second quarter of 2015. Moreover, Namzaric will be available in two dosage strengths, 28/10 mg and 14/10 mg, for patients with severe renal impairment.
We note that the company is looking to convert Namenda immediate release/IR (approved for the treatment of moderate-to-severe dementia of the Alzheimer’s type) patients to the XR formulation ahead of the entry of generics, which is expected to start from Jul 2015. As a result, the company had planned to stop selling Namenda IR from Jan 2015. However, the District Court for the Southern District of New York announced its intention of issuing a preliminary injunction which may compel the company to continue selling Namenda IR tablets. Actavis has filed an emergency appeal requiring an overturn of the ruling (Read more: Actavis to Appeal Ruling Regarding Namenda IR Sales).
The FDA approval for Namzaric comes as a huge positive for the company as it should help the company accelerate the process of transitioning patients to the new formulations. We note that in the first nine months of 2014, the Namenda franchise generated sales of $427.6 million, comprising 15.3% of the total revenue of Actavis’ North American Brands.
Actavis currently carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the health care sector include Akorn, Inc. (AKRX) and Biodel Inc. (BIOD). Both the stocks carry a Zacks Rank #1 (Strong Buy).
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