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Drug Roundup - March 21, 2013
There have been several noteworthy developments in the drug space recently, which will likely have a material impact on the companies in this sector and the markets they serve. Companies mentioned in this review include Pfizer Inc. (PFE – Free Pfizer Stock Report), Novartis AG (NVS), and AstraZeneca (AZN).
FDA Issues Heart Risk Warning to Popular Pfizer Antibiotic
Earlier this month, The Food and Drug Administration issued a warning stating that Zithromax, a widely used antibiotic developed by Pfizer, can cause rare but deadly heart rhythms in some patients. A study at Vanderbilt University showed that out of several antibiotics researched over a 14-year period, the highest risks were seen in Zithromax patients with existing heart problems. As a result, the agency has added new warnings to the product’s label and is urging doctors to consider prescribing other antibiotics to patients with a history of heart issues. Zithromax is more expensive than other antibiotics on the market today, but is widely popular because it can often be taken for fewer days. More than 40 million patients in the U.S. have received a prescription for Zithromax over the past year.
Novartis Cancer Drug Receives Key FDA Designation
On March 15th, the Swiss-based drugmaker announced that its experimental cancer drug LDK378 was designated as a breakthrough therapy by The Food and Drug Administration. Novartis is studying the drug as a treatment for a rare type of metastatic non-small cell lung cancer and is intended for patients who did not respond well to treatment with Pfizer’s Xalkori product. The FDA introduced this breakthrough therapy program last year as a way to speed up the approval process for drugs that could represent significant improvements to current life-threatening disease treatments on the market. Novartis plans to start late-stage testing on the drug in 2013 and file for marketing approval in early 2014.
AstraZeneca Announces Significant Reductions in Headcount
On March 18th, the London-based pharmaceutical company announced it would be cutting around 1,600 jobs in conjunction with overhauling its research operations. Only three days after this announcement, new CEO Pascal Soriot indicated the company would be slashing an additional 2,300 jobs in sales and administration. The moves come as part of a worldwide strategy to reduce costs and return the struggling drugmaker to prominence after a challenging 2012, where expiring patents of several key drugs weighed heavily on its bottom line. Management believes its plan will result in cost benefits of about $800 million by 2016, with total job cuts of about 5,050.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.