Wednesday afternoon, industry-watchers finally got the news many of them were expecting on Mylan's generic Advair candidate: no-go. Now the big question is how much that denial will hurt the generics giant—and its 2017 guidance.
The FDA decision—delivered in a complete response letter (CRL)—marked a stinging blow for Mylan, whose execs appeared certain they'd hear a Yes instead of a No. In fact, on this month’s Q4 conference call, they laid out just why they were “so confident” about their chances of snagging a go-ahead.
“We have knocked off all of these,” Walt Owens, SVP of global scientific affairs, told investors of the FDA’s key approval criteria. “You can check the boxes for all of these components of the draft guidance as being met.”
And President Rajiv Malik chimed in, "[W]e had several pre-submission and post-submission interactions with the FDA on those three, four, five turns of the information requests. So FDA has been very engaged."
RELATED: Mylan's generic Advair gets stiff-armed by FDA. What does this mean for GSK?
Some analysts, however, saw things differently all along. “We had anticipated the CRL last week when we entitled our weekly report, ‘Generic Advair Mirage,’” Wells Fargo’s David Maris reminded clients Thursday. RBC Capital Markets’ Randall Stanicky wrote in his own research note that the CRL was “not a surprise,” and Evercore ISI’s Umer Raffat has long cautioned his clients that he saw a couple of potential approval hurdles in the picture.
Now, Stanicky expects “questions will emerge around 2017 outlook”—and they’ll be hard to answer, given that, as Maris noted, “Mylan has risk-adjusted sales of generic Advair in its guidance, but has not specified how much."
Both analysts think it'll be awhile before the GlaxoSmithKline respiratory knockoff does win approval, especially if Mylan has additional work to do.
Stanicky’s best estimate? Six months if the CRL contains quick fixes, “based on timing to respond and past CRL timing for more straightforward files.”
Maris, though, is less optimistic. Based on the long delays to Mylan’s copy of Teva multiple sclerosis med Copaxone, “we believe that investors should remove generic Advair from the 2017 expectations,” he wrote.
RELATED: Could Sandoz have stalled Mylan's generic Advair? Maybe so, analyst says, citing FDA post
Meanwhile, that timing could open up a big opportunity for Jordan’s Hikma Pharmaceuticals, which is expecting its own FDA verdict in May. Novartis’ Sandoz, late to the party, now has more time to play catch-up, too—an outcome it was hoping for when it filed a citizen petition urging the FDA to adopt strict bioequivalence standards.