Mylan's generic Advair gets stiff-armed by FDA. What does this mean for GSK?

FDA
The FDA has so far been silent on whether it's approved Mylan's Advair copy.

Mylan’s FDA decision date for its knockoff of GlaxoSmithKline respiratory blockbuster Advair came and went Tuesday, with no word from the drugmaker or regulators. But Wednesday afternoon, Mylan finally said its copycat had been turned away.

Mylan didn't say why the product got a complete response letter (CRL), which is what the FDA calls its bad-news notifications on drug approvals. The company didn't say whether it's a short-term delay fixable with current data and information or a longer-term problem. Either way, however, that means some extra time for GSK to hang on to revenues from its leading med.

"Mylan is in the process of reviewing this response and will provide an update on its application as soon as practicable once it has completed its review and discussed the FDA's feedback with the agency," the company said in its statement.

Mylan's candidate would have been the first potentially substitutable version of the GSK star. And the delay won't surprise some industry watchers—including Glaxo itself.

The drugmaker has warned multiple times that the approval process may not be straightforward, and that generics makers may have to come back more than once before snagging green lights. After all, the British drugmaker’s hard-to-copy Diskus inhaler technology, long off-patent, has been foiling copycats for years.

The setback for Mylan—and potential pitfalls for rivals with their own applications, including Jordan’s Hikma, whose FDA decision date falls in May—could protect Glaxo’s top line. If no copycats hit the scene in 2017, Glaxo expects core earnings to expand by between 5% and 7% at constant exchange rates.

But the pharma giant took into account a wide range of approval and launch outcomes when making its guidance prediction; after all, Witty reminded investors in February, a timely FDA OK doesn’t ensure a quick rollout. It landed on a midyear generic entry scenario, which it thinks could push core earnings to come in flat or decline by a single-digit percentage.

“We think it essentially covers most of the likely outcomes,” Witty said of the guidance on Glaxo’s fourth-quarter earnings conference call.

Meanwhile, Glaxo won’t be the only drugmaker celebrating Mylan's news. Novartis’ Sandoz, running behind its peers with its own Advair copy, has urged regulators to take up stringent bioequivalence standards. And its request may be just part of the holdup; the FDA recently pledged to consider the data submitted by Sandoz as it weighs "whether any changes are needed to the bioequivalence guidance."