Valeant (VRX) holds Brodalumab, another key asset for the indication of mild-to-moderate psoriasis, which is under review with a set action date of November 16, 2016. Valeant is developing the drug in partnership with AstraZeneca (AZN). The drug’s approval would be positive news for Valeant’s investors. For further information on this potential growth driver, please read, Brodalumab, Oral Relistor among Valeant’s Recent Wins.
With significantly improved efficacy against the market-leading $2.5 billion psoriasis product Stelara, Brodalumab definitely holds a promising future. Stelara is a Johnson & Johnson (JNJ) product. Brodalumab’s competitor drugs, Cosentyx by Novartis and Taltz by Eli Lilly, are expected to garner $3.5 billion and $1.1 billion by 2020, respectively.
Before its trial results, AstraZeneca had claimed that the drug would generate $1.5 billion in annual sales. Amgen (AMGN), which was the inventor of Brodalumab, had dropped its development, which was in partnership with AZN. The reason behind this decision was the side effect of suicidal ideation. However, analysts expect the drug will earn over $500 million annually. Valeant is working with the FDA (US Food and Drug Administration) to resolve the issue. If the approval comes with restrictions and conditions, it might hamper the drug’s sales. In July 2016, Brodalumab won approval in Japan. Additionally, its application in Europe was accepted by the EMA (European Medicines Agency) in 4Q15.
Along with Brodalumab, Valeant expects to launch Vesneo, a latanoprostene bunod ophthalmic solution, in 2016. Vesneo is indicated for lowering increased intraocular pressure open-angle glaucoma or for ocular hypertension patients. As noted by Valeant, it holds a peak sales potential of $500 million in the US and $1 billion globally. Considering the incremental revenue from these two drugs, Valeant definitely seems to be undervalued. Continually being in the spotlight for bad reasons has taken a toll on the company’s share price. The Vanguard FTSE All-World ex-US ETF (VEU) offers exposure to risky Valeant. VEU holds 0.03% of its total holdings in Valeant.