Actavis plc (ACT) received positive news on the regulatory front with the FDA approving Avycaz for the treatment of adults suffering from complicated intra-abdominal infections (cIAI) (in combination with metronidazole) and complicated urinary tract infections (cUTI) including pyelonephritis caused by designated susceptible bacteria, including certain enterobacteriaceae and pseudomonas aeruginosa.
However, Actavis mentioned that Avycaz should only be used by patients who have limited or no alternative treatment options.
We note that Avycaz, being a qualified infectious disease product, enjoys a five-year regulatory extension of exclusivity under the Hatch-Waxman Act.
Avycaz will be available from the second quarter of 2015.
Our Take
We remain optimistic about Actavis’ growth prospects. We are positive on the Forest acquisition which is in line with Actavis’ strategy of building its branded product portfolio. Meanwhile, the Durata acquisition has boosted Actavis’ infectious disease portfolio. The upcoming Allergan (AGN) acquisition also looks good to us. We are encouraged by Actavis’ focus on building its branded and biosimilars pipeline.
Actavis intends to adopt Allergan as its corporate name once the acquisition goes through. With this acquisition, Actavis, which was previously known for its strong presence in the generics market, will find itself in the company of the top 10 pharmaceutical companies across the world based on sales.
Actavis, which reported impressive fourth quarter results recently, provided a strong stand-alone outlook for 2015.
Actavis carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the health care sector include Cambrex Corporation (CBM) and BioMarin Pharmaceutical Inc (BMRN). Both hold a Zacks Rank #1 (Strong Buy).
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