Source: GlaxoSmithKline plc
GlaxoSmithKline reported late stage trial results for a promising new vaccine for the prevention of shingles that could help millions of people, and in the process win away sales from Merck & Co.'s shingles vaccine Zostavex and dent demand for Pfizer's multi-billion dollar drug Lyrica, which is used to treat pain associated with the condition.
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First, a bit of backgroundGlaxoSmithKline's HZ/su is being studied in more than 16,000 patients and results so far suggest that the vaccine is incredibly effective at reducing the risk of developing shingles, a painful condition that affects millions of adults.
Shingles is caused by a reactivation of the virus behind chickenpox and given that most baby boomers were exposed to chickenpox during their youth, shingles poses a risk to roughly 90% of adults. As people age and their immune systems become more easily compromised, the chickenpox virus, which is known as varicella-zoster, can reactivate, causing the painful skin rash.
The widespread risk of developing shingles has made it a key focus of drugmakers and has already resulted in the approval of Merck'sZostavex. Merck studied Zostavex in 38,000 adults age 60 and over and discovered that Zostavex reduces the risk of developing shingles by 51.3% and the risk of developing post-herpetic pain from the condition, which is often treated with Pfizer's Lyrica, by 66.5%. Those results are compelling enough that the Centers for Disease Control's Advisory Committee recommend its use in people over age 60. As a result, Zostavex generated sales of $479 million during the first nine months of 2014.
However, Zostavex isn't a perfect solution. The vaccine only cuts the risk of developing shingles in about half and according to the CDC, protection offered by the vaccine wanes over time. In fact, the CDC notes that it's uncertain whether Zostavex offers protection to patients beyond five years after taking it.
Reshaping the indicationDuring the phase three trials of GlaxoSmithKline's HZ/su, which began in 2010, the vaccine reduced the risk of developing shingles in patients aged 50 years or older by 97.2% compared to placebo.
That prevention rate suggests that it could one day become the de-facto vaccine used to prevent shingles, displacing Merck's Zostavex. HZ/su's nearly 100% prevention rate may also suggest that the number of patients agreeing to take it increases, boosting the overall market opportunity for the vaccine.
When HZ/su could reach the market; however, remains uncertain. GlaxoSmithKline has offered no timeline for a potential filing other than indicating that additional safety information will be analyzed and disclosed "in the coming months."Considering the safety profile for the vaccine during phase 1 and phase 2 trials and the fact that independent monitors haven't expressed any concerns during the phase 3 trials, it seems unlikely that there will be any surprises in that safety data.
GlaxoSmithKline is also continuing to study HZ/su in patients aged 70 and older and in immunocompromised patients, and is determining whether or not the vaccine can help prevent post-herpetic pain. If HZ/su does prevent or reduce post-herpetic pain it could directly impact sales of Pfizer's Lyrica, but even if it doesn't, an eventual approval could still reduce Lyrica's sales because it would reduce the number of overall cases of shingles. Since Lyrica is used for other indications too, including fibromyalgia and diabetic peripheral neuropathy, it's unclear how much of its sales are tied to the shingles indication. Regardless, Pfizer investors are right to pay attention to HZ/su given that Lyrica sales totaled $732 million for Pfizer globally in the third quarter.
Looking aheadThe HZ/su vaccine could be an important win for GlaxoSmithKline given that its been struggling to offset the risk of patent expiration and headwinds tied to payer pushback on its top selling asthma drug, Advair. As a result, GlaxoSmithKline's trailing 12 month sales have slumped from more than $46 billion in 2010 to $39.2 billion in the 12 month period ending September. HZ/su won't reverse that decline all by itself, but it could help position GlaxoSmithKline to eventually return back to growth once sales stabilize. If so, that would be good news for long-term investors who have held onto their shares because of GlaxoSmithKline's high dividend yield of 5.6%.
The article Exciting News: A Game-Changing Shingles Vaccine Could Be On Its Way originally appeared on Fool.com.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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