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Allergan Falls on FDA's Rejection of Uterine Fibroids Drug

Zacks Equity Research
Updated
Allergan Falls on FDA's Rejection of Uterine Fibroids Drug
FDA rejects Allergan's (AGN) new drug application for Esmya for the treatment of abnormal uterine bleeding in women with uterine fibroids, citing safety issues.

Allergan AGN announced that the FDA has given a complete response letter (CRL) to the new drug application (NDA) for Esmya/ulipristal acetateon safety concerns.

Allergan is looking to get Esmya, a selective progesterone receptor modulator (SPRM), approved for the treatment of abnormal uterine bleeding in women with uterine fibroids. The FDA has requested additional information citing safety issues regarding Esmya post-marketing reports outside the United States. Allergan will meet with the FDA to discuss the next step for Esmya.

In February, the FDA delayed the action date for ulipristal acetate by three months from May to August.

Shares of Allergan declined around 2% in after-hours trading on Tuesday. However, so far this year, Allergan’s shares have outperformed the industry. Allergan’s shares have risen 16.9% in the period compared with a 7.8% increase for the industry.

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In February, the FDA delayed the action date for ulipristal acetate by three months from May to August. In Europe, Allergan’s marketing partner for Esmya is Hungarian specialty pharma company, Gedeon Richter., Last year, the European Medicines Agency (EMA) opened a review of Esmya after reports of the drug causing serious liver damage in some patients surfaced. The review was concluded in May this year with new restrictions on use of Esmya to minimize the risk of rare but serious liver injury. In June, Gedeon Richter announced that the Committee for Medicinal Products for Human Use (CHMP) of EMA gave a positive opinion recommending marketing authorization of Esmya as 5 mg tablets.

Esmya is part of Allergan’s Women’s Health franchise, which Allergan is looking to sell along with its Infectious Disease unit to focus on four therapeutic areas — Medical Aesthetics, central nervous system (CNS), Eye Care and gastrointestinal. On the second quarter conference call, the company mentioned that there are more buyers for the Infectious Disease franchise as investors await FDA’s decision on Esmya. With the latest setback, the prospects of striking a profitable deal for the Women’s Health franchise have become gloomy.

Allergan currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked large drug/biotech stocks are Gilead Sciences GILD, Eli Lilly & Company LLY and Bristol-Myers Squibb Company BMY. While Gilead and Bristol-Myers sport a Zacks Rank #1, Lilly carries a Zacks Rank #2 (Buy).

Gilead’s earnings estimates increased 6.8% for 2018 and 2.4% for 2019 over the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 6.43%. The company’s shares have increased 2.4% year to date.

Bristol-Myers’ earnings estimates increased 5% for 2018 and 4.6% for 2019 over the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 6.39%.

Lilly’s earnings estimates increased 5% for 2018 and 2% for 2019 over the last 30 days. The company delivered a positive earnings surprise in each of the trailing four quarters, with an average beat of 10.15%. The company’s shares have increased 24.4% year to date.

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