SmithKline Avandia Launch In EU Delayed By Negative CPMP Vote

SmithKline Beecham will work with European regulators over the next several months to persuade them to reverse a negative opinion from the Committee for Proprietary Medicinal Products regarding the approval of its antidiabetic Avandia (rosiglitazone).

"We believe this is a temporary setback," SB said. "We are confident that by the end of March we will have demonstrated Avandia's unique benefits in the treatment of type 2 diabetes to the CPMP."

The negative opinion on Avandia signals that EU authorities are continuing to adopt a skeptical stance towards the glitazone class, despite U.S. marketing clearance for three members of the group, including Avandia, Warner-Lambert's Rezulin (troglitazone) and Lilly/Takeda's Actos (pioglitazone).

Avandia was the first glitazone to be processed via the EU's centralized procedure. Glaxo Wellcome marketed troglitazone as Romozin in the U.K. for a brief period in late 1997, before the drug was pulled due to liver toxicity concerns.

An attempt to resubmit the Romozin application with revised liver monitoring labeling similar to that introduced in the U.S. failed to win over the Medicines Control Agency in March (¹ (Also see "Glaxo Diabetes Entry Awaits GI-262570 After Troglitazone Rejection" - Pink Sheet, 29 Mar, 1999.)).

In the U.S., where Avandia is co-promoted with Bristol-Myers Squibb, the product has been used by over 250,000 patients and has generated over 500,000 scripts since its launch in June, SmithKline reported.

Avandia captured third-quarter U.S. sales of $16 mil. and worldwide sales of $87 mil. thus far in 1999. The product was approved "in record time...for the Medicaid program in all 50 states of the U.S.," SB said. Four months after launch, Avandia's "weekly share of new prescriptions in the growing U.S. oral type 2 diabetes market has reached 4.5%."

SB's U.S. pharmaceutical sales advanced 4% to $1 bil. for the third quarter, "impacted by both the heavy initial wholesaler stocking of Avandia and increased wholesaler stocking of other major products, in anticipation of price increases that occurred in the second quarter," the company explained.

Major products also affected in the quarter by U.S. wholesaler stocking patterns included the antibiotic Augmentin, which had reported sales increase of 6%, the antidepressant Paxil, which saw a sales decrease of 2%, and the arthritis medicine Relafen, with a sales decline of 38%.

"Excluding the effects of this increased stocking, the estimated underlying increase for Paxil would have been 15%; for Augmentin, 24%; and for Relafen a decrease of 20%," SB said.

Paxil remained SB's top earner for the quarter, with U.S. revenues of $311 mil. and worldwide sales up 4% to $471 mil. (² (Also see "Prozac New Prescription Share Declines; Celexa, Effexor Make Gains" - Pink Sheet, 25 Oct, 1999.)). Relafen garnered sales of $77 mil. in the U.S. and $89 mil. worldwide, representing a decline of 37%.

Augmentin posted U.S. sales of $188 mil., with worldwide revenues advancing 4% to $358 mil. U.S. growth was facilitated by guidelines issued early in the year by the Centers for Disease Control & Prevention recommending first-line use of Augmentin for otitis media caused by drug resistant S. pneumoniae.

European sales for Augmentin felt the impact of government controls on the use and pricing of antibiotics, particularly in the U.K. and France, SB reported. Revenues for the antibiotic declined 3% in Europe. Overall drug sales in Europe grew by 4% for the quarter.

SmithKline's anti-infective portfolio witnessed a 3% sales increase for the herpes therapy Famvir, which generated sales of $32 mil. in the U.S. and grew by 8% worldwide to $48 mil.

The antibiotic Bactroban advanced 2% in the U.S. to $30 mil. and the antibacterial Timentin declined 46% to $11 mil. Manufacturing at SB's Piscataway, N.J. facility was halted in January due to sterility failures but resumed in June.

The calcium channel blocker Coreg, which SB co-promotes in the U.S. with Roche, posted sales of $56 mil. The oncologic agent Hycamtin grew by 31% in the U.S. to $26 mil., and advanced 25% worldwide with sales of $34 mil.

The anti-Parkinson's agent Requip grew by 48% in the U.S. to achieve sales of $8 mil. Worldwide sales for the dopamine agonist were $17 mil., representing an advance of 55%.

In September, SB announced that it entered into a development and licensing agreement with SkyePharma for a once-daily version of Requip using SkyePharma's Geomatrix oral delivery technology. SB made an $8 mil. equity investment in SkyePharma as part of the agreement, as well as an up-front payment. The deal also provides for SkyePharma to receive milestone payments up to product approval and royalties on product sales.

SmithKline's anti-emetic therapy Kytril grew by 6% in the U.S. to achieve $54 mil. in third-quarter revenues. Worldwide sales increased 9% to $89 mil. In July, Kytril's U.S. indication was expanded to include prevention of nausea and vomiting associated with radiation, including total body irradiation and fractionated abdominal radiation.

SB's vaccines business declined 3% in the U.S. to post $80 mil. in sales for the quarter. Worldwide vaccine sales, however, grew 5% to $312 mil. SmithKline highlighted strong growth for the DTaP vaccine Infanrix, which jumped 88% in the U.S. to $11 mil. and grew by 60% worldwide with revenues of $51 mil.

The hepatitis A & B vaccine Twinrix grew 44%, partially offsetting the sales decline for Havrix and Engerix-B, SB reported. The firm's hepatitis franchise declined 15% in the U.S. to achieve sales of $66 mil., while worldwide revenues decreased 11% to $192 mil.

The Lyme disease vaccine Lymerix garnered $3 mil. in sales for the third quarter, a significant decline in revenues compared with its performance in the first two quarters. Following its U.S. launch in January, Lymerix posted $18 mil. in the first quarter and $19 mil. in the second. First quarter sales reflected the impact of wholesaler stocking, SB noted previously (³ ).

Global drug sales advanced 3% to $1.9 bil. At the nine-month mark, SB's drug revenues had increased 15% in the U.S. to $3.17 bil. and 10% worldwide to $6 bil. Total sales for the group declined 4% during the quarter to $3.1 bil., although nine month sales were up 5% to $9.9 bil.

As part of the firm's streamlining and restructuring plans announced in February, SB took an exceptional charge of $238 mil. in the third quarter (⁴ (Also see "SB Savings From Streamlining Will Approximate 1998 Kytril Sales" - Pink Sheet, 15 Feb, 1999.)).