Teva's AirDuo steps up to challenge Advair, but the newcomer's fate depends on price

Teva
Teva's AirDuo will go up against GlaxoSmithKline's aging respiratory blockbuster Advair in the ICS/LABA arena.

Teva’s got a green light for its new challenger to GlaxoSmithKline’s respiratory giant Advair. No, it’s not the long-awaited substitutable generic—but it may still amp up pressure in the respiratory field.

On Monday, the Israeli drugmaker said the FDA had approved AirDuo RespiClick, a fixed-dose ICS/LABA combo product containing the same active ingredients as Glaxo’s megablockbuster.

While the two asthma products differ in a couple of important ways—AirDuo contains a lower dose of the meds’ LABA component, salmeterol, and the newcomer also lacks Advair’s approval in chronic obstructive pulmonary disease—Teva’s “price discounting will be key,” Evercore ISI analyst Umer Raffat wrote in a Monday note to clients.

Just how much discounting there is, though, remains to be seen. "We will be competitively priced in the branded space," a company spokeswoman said via email.

Advair, of course, has already seen huge sales declines even without a knockoff on the U.S. market, and Glaxo has payers to thank. They’ve heaped pressure on the field, requiring GSK and its rivals to negotiate big discounts to keep their meds’ formulary positioning.

Glaxo CEO Andrew Witty, though, now sees that pressure as a positive. It has mimicked the genericization effect, Witty has said, and with that blow out of the way, the company has turned its attention to its newer products—such as ICS/LABA combo Breo—that have sales on the up-and-up.

Even if the company is worried about the added heat from Teva, Glaxo won't have to deal with it immediately. Teva’s newcomer will launch “later this year,” the Israeli company’s press release said, without providing specifics.

Meanwhile, Teva’s pricing—which the company refused to disclose to Raffat—will also affect the product’s uptake, the analyst figures. “I believe pace of launch will be contingent on whether Teva is aggressive with its pricing strategy,” he wrote, though he noted that execs seemed “lukewarm” about the product's prospects on a call with investors this month. 

“We’ll expect peak sales of about $200 million. It will have a slower uptake and … you will see really small numbers in this year, and that’s the way we modeled it,” Rob Koremans, Teva’s CEO of specialty meds, said at the time, noting that “it’s still very much uncertain.”

Separately, the FDA greenlighted another Teva respiratory product on Monday, too. The company nabbed the agency's go-ahead for ArmonAir RespiClick, a solo ICS containing the same active ingredient as GSK's Flovent.