GlaxoSmithKline (GSK) received positive news when the FDA approved its asthma treatment, Arnuity Ellipta.

Arnuity Ellipta has been approved in doses of 100 mcg and 200 mcg as a once-daily inhaled corticosteroid (ICS.TO) medicine for maintenance treatment of asthma as prophylactic therapy in patients aged 12 years and above. Glaxo had evaluated the efficacy and safety of Arnuity Ellipta in more than 3,600 patients suffering from asthma.

The approval of Arnuity Ellipta should relieve Glaxo as its respiratory product portfolio has been facing challenges of late. Meanwhile, Glaxo’s plans to transition and diversify its respiratory portfolio are underway. The transition is expected to continue over the next 2-3 years.

During the second quarter of 2014, Glaxo filed Breo for approval in the U.S. for asthma. In Jul 2014, Glaxo initiated a phase III study, IMPACT, to evaluate the efficacy and safety of the triple combination of FF/UMEC/VI in patients with chronic obstructive pulmonary disease (:COPD). Glaxo also plans to file its first biologic, mepolizumab, for severe asthma by the end of 2014.

Increasing competition and pricing pressure has adversely impacted Glaxo’s results in recent times. The company expects new products such as Breo, Anoro and Incruse, along with expected approvals to drive sales in the coming quarters. We cautiously watch Glaxo’s plans to transform its lagging respiratory business.

Glaxo carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the healthcare sector include Allergan (AGN), AstraZeneca (AZN), and AbbVie (ABBV). While Allergan sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2 (Buy).

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