16/04/2009 - 12:43
- (Bolsamania) - GlaxoSmithKline (GSK LN): REDUCE: a chance to grow sales
Long term (12 months): Buy
Target price: £14.10
On 27 April 2009, GSK may present the 4-yr REDUCE study on whether Avodart lowers the risk of prostate cancer. We already forecast sales of £1bn in 2013 for this fast-growing product. REDUCE could add a further £750m pa by 2013F and support a return to sales growth in 2011F.
We know drugs of this type lower the risk of prostate cancer
A previous study has shown that finasteride, the other drug of the same class as Avodart, reduces the risk of prostate cancer by 25% in men with a low risk of the disease. The drawback was that those people on finasteride who did develop prostate cancer were 27% more likely to have a more aggressive form of this otherwise slow-growing disease. Journal editorial at the time (2003) decided against using finasteride for prevention.
Avodart has potentially a more beneficial profile
Avodart has a different profile to finasteride: it is more potent in lowering the level of both forms of the key growth factor that stimulates prostate cancer, especially the one that is found in prostate cancer cells. Avodart therefore may well show a benefit in lowering the risk of prostate cancer, as seen with finasteride, but without the risk of higher grade disease.
The REDUCE study is scheduled for presentation on 27 Apr 09 at major conference
This 8,000 patient study has been completed, data analysis is ongoing and it is scheduled to be presented at the American Urology Association annual meeting on 27 Apr 09.
We expect Avodart to show a reduction in prostate cancer risk
The real opportunity for REDUCE is not in lowering prostate cancer risk, which we think is likely, but doing so without raising the risk of more aggressive diseases. We currently forecast sales of Avodart will reach c£1bn in 2013, driven by its rapidly enhanced use in the treatment of enlarged prostate. A strongly positive result in REDUCE could accelerate the already high sales growth rate of Avodart (+27% to £399m in 2008) and add £750m to annual sales by 2013F. Importantly this drug would provide material support for a return to sales growth for GSK in 2011F and provide sales and profit benefit at the crucial patent expiry time of 2013 for GSK's biggest drug Advair.
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