The Zacks Analyst Blog Highlights: GlaxoSmithKline, Pfizer, Theravance, Amicus Therapeutics and Parker-Hannifin
CHICAGO, Oct. 9, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include GlaxoSmithKline (NYSE:GSK), Pfizer (NYSE:PFE), Theravance Inc. (Nasdaq:THRX), Amicus Therapeutics (Nasdaq:FOLD) and Parker-Hannifin Corporation (NYSE:PH).
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Here are highlights from Monday's Analyst Blog:
Encouraging Data on Glaxo Drug
GlaxoSmithKline (NYSE:GSK) recently presented positive data on its oncology drug, Votrient (pazopanib) from a pivotal phase III study. The phase III study COMPARZ (COMParing the efficacy, sAfety and toleRability of paZopanib vs. sunitinib) evaluated the use of Votrient versus Pfizer's (NYSE:PFE) Sutent (sunitinib) in patients with advanced renal cell carcinoma.
The open-label, head-to-head, randomized study enrolled 1,110 patients. Votrient was found to be non-inferior compared to Sutent in terms of progression free survival (PFS). Median PFS was 8.4 months and 9.5 months in the Votrient and Sutent arms, respectively. Votrient demonstrated an objective response rate (ORR) of 31%, while ORR was 25% in the Sutent arm.
Votrient is currently marketed worldwide for the treatment of patients with advanced renal cell carcinoma. On April 26, 2012, the FDA approved Votrient for the treatment of patients with advanced soft tissue sarcoma who have received prior chemotherapy. On August 7, 2012, Votrient received approval from the European Commission for use in advanced soft tissue sarcoma patients, who have received prior chemotherapy or have progressed within a year after neo adjuvant treatment.
In the second quarter of 2012, Glaxo reported that Votrient sales increased 77% to £39 million. In the US, Votrient sales went up 67%, benefiting from the label expansion.
Our Recommendation
We currently have a Neutral recommendation on Glaxo. The stock carries a Zacks #3 Rank (Hold rating) in the short run.
Several products in Glaxo's portfolio including Valtrex, Arixtra, Evoclin, Lamictal, Imitrex, Requip, Combivir and Epivir are facing declining sales due to intense generic competition. We expect the company's top line and gross margins to remain under pressure in the coming quarters. The EU pricing pressure will continue to affect sales.
Glaxo is looking towards deals and acquisitions to drive growth. The company is focusing on increasing the rights on its partnered products and promising pipeline candidates, so that it stands to benefit more from their success.
Glaxo's acquisition of Cellzome and Human Genome Sciences and increasing investment in Theravance Inc. (Nasdaq:THRX) and Amicus Therapeutics (Nasdaq:FOLD) indicate its efforts to expand the pipeline.
Apart from this, Glaxo continues to make progress with its cost-cutting initiative, which should help reduce the impact of increasing generic competition over the next few years and help earnings grow.
Parker-Hannifin Acquiring Velcon
Parker-Hannifin Corporation (NYSE:PH) is planning to expand its Filtration Group through the acquisition of Velcon Filters, LLC, from The Sterling Group LP, a private equity firm. The acquisition of the maker of filtration equipment and replacement cartridges is subject to regulatory approval. Further, the terms of the deal were not disclosed.
Velcon's products are primarily used in the aviation, industrial fuel, and industrial process filtration markets. It operates globally with approximately 300 employees. Further, Velcon's revenue for year-end August 31, 2012, amounted to $115 million, of which 33% was from the Industrial North American segment and 67% from the Industrial International segment.
Velcon's aviation product offerings, sold under the brand names of Velcon and Warner Lewis, are renowned worldwide. The addition ofVelcon Filters' brands to Parker's portfolio will enable Parker to attain a leadership position in the aviation and industrial fuel filtration markets. Further, the addition of the Twin Filter brand will strengthen its position in the process filtration markets such as oil and gas. These additions expand Parker's customer base and also its operating regions and markets.
Parker-Hannifin Corporation is a leading worldwide full-line diversified manufacturer of motion and control technologies and systems, including fluid power systems, electromechanical controls and related components. In addition to motion and control products, the company is also a leading worldwide producer of fluid purification, fluid and fuel control, process instrumentation, air conditioning, refrigeration, electromagnetic shielding and thermal management products and systems.
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