Copying Valeant's Xifaxan just got 'a lot easier,' thanks to new FDA guidance: analyst

The FDA released new guidance on Friday regarding generics of Valeant's Xifaxan.

Valeant already has enough Xifaxan problems without more competition for its leading med. But thanks to the FDA, that competition may be on its way sooner than the embattled drugmaker would like.

On Friday, U.S. regulators posted new guidance on what’s needed for generics makers to show bioequivalence to the IBS-D fighter, and that guidance will make it “much easier” for them to do so, Wells Fargo analyst David Maris wrote in a note to clients. The agency will no longer look for a bioequivalence study with clinical endpoints in order to establish bioequivalence, making the copycat process much less risky and expensive.

“We believe this will open the door to a greater number of generic applicants, as the cost and risk of doing these BE studies is much lower than placebo controlled clinical trials,” Maris wrote, noting that he thinks the likelihood of generics entering in 2023 or earlier “has just increased dramatically.”

The guidance follows a citizen petition from Valeant’s Salix, which last year asked the FDA not to approve generic applications that didn’t include, among other things, evidence that wannabe copycats’ active ingredients had the same polymorph profile as Xifaxan’s.

Valeant, though, “believes the new guidance is actually a positive,” Maris wrote in a separate note. As the Canadian company told him, the new guidance had “raised the bar” for knockoffs, and the way Valeant sees it, it “may delay generics which may not have conducted their studies to be compliant with the new guidance.”

Meanwhile, early generics competition is the last thing Valeant needs as it struggles to lift its lagging GI portfolio. Sales of Xifaxan and its fellow GI products aren’t where analysts expected them to be, a trend that prompted the company to roll out beefed-up marketing plans after a sale of the unit to Japan’s Takeda fell through. But according to Maris, more than 50 reps recently jumped ship, adding to Valeant’s well-documented turnover problems.

It hasn’t been all smooth sailing for Xifaxan’s lead competitor in the IBS-D space though, either. Last week, the FDA warned that the med’s nemesis, Allergan’s Viberzi, could cause pancreatitis deaths in patients without gallbladders.