Glaxo-Genmab's Arzerra Disappoints - Analyst Blog

GlaxoSmithKline GSK and partner Genmab announced disappointing data on their oncology drug, Arzerra. The pivotal phase III study (ORCHARRD) was evaluating the combination of Arzerra and chemotherapy (dexamethasone, cytarabine and cisplatin) versus Rituxan (rituximab) and chemotherapy in patients suffering from relapsed or refractory diffuse large B-cell lymphoma (DLBCL).

The ORCHARRD study failed to meet the primary endpoint. Statistically significant difference in progression free survival was not observed between patients receiving Arzerra plus chemotherapy and patients receiving Rituxan and chemotherapy. Additional data from the trial is expected to be available later this year.

We note that Arzerra is already approved for the treatment of patients with chronic lymphocytic leukemia (CLL) refractory to Campath (alemtuzumab) and Fludara (fludarabine).

Last month, the U.S. Food and Drug Administration (FDA) also approved Arzerra in combination with another Glaxo drug, Leukeran (chlorambucil), in treatment-naive CLL patients for whom fludarabine-based therapy is not suitable. Glaxo and Genmab are also evaluating Arzerra for follicular lymphoma (phase III).

Glaxo reported Arzerra revenues of approximately £16 million in the first quarter of 2014. After the disappointing DLBCL data, Glaxo and Genmab are unlikely to submit a marketing application for Arzerra for this indication. Approval for the DLBCL indication could have boosted Arzerra revenues.

Glaxo currently holds a Zacks Rank #3 (Hold). Stocks like Allergan AGN, Gilead Sciences GILD and Alexion Pharmaceuticals ALXN are better ranked in the health care space. While Allergan and Gilead are Zacks Rank #1 (Strong Buy) stocks, Alexion holds a Zacks Rank #2 (Buy).

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