Could Sandoz have stalled Mylan's generic Advair? Maybe so, analyst says, citing FDA post

The FDA is due to make a decision on Mylan's generic Advair Tuesday, but GSK wouldn't be surprised if the answer is no.

Novartis has done its best to stall rivals setting up for the Advair generics party, at least until its Sandoz unit is ready to join. And one analyst says there's a chance it worked.

Monday—just one day before it was due to hand down a decision on Mylan’s version of the GlaxoSmithKline behemoth—the FDA posted a response (PDF) dated March 10 to Sandoz’ Citizen Petition on Advair generics. Sandoz had submitted the petition in October, taking issue with the FDA's Advair generic bioequivalence rules in an effort to trip up competitors racing to the copycat finish line.

While the FDA denied the petition to meet the deadline for its response, it also "suggested it would consider the data presented by Sandoz in the context of reviewing the approvability" of any generic Advair applications, a Novartis spokesman said via email. The agency said it would also consider that data as it weighs "whether any changes are needed to the bioequivalence guidance."

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And the way Evercore ISI analyst Umer Raffat sees it, that response may be a bad sign for Mylan.

“Had FDA denied the Sandoz citizen's petition outright, it may have implied that FDA does not deem Sandoz's point to be important, and the odds of generic approval today would have been higher. BUT, that didn't happen,” he wrote in a Tuesday note to clients.

Of course, the FDA didn't say it intended to hold up Mylan's drug, Instead, it noted that it had not "made a final determination to approve or not approve" any generic Advair application. But “when such a response comes out right next to a GDUFA date, FDA is usually a bit more specific,” Raffat noted.

RELATED: Novartis, late to the Advair generics party, urges FDA to block rival copycats

One company certainly wouldn’t be surprised if Mylan didn’t nab an OK on the first go-round, and that’s Glaxo. CEO Andrew Witty has stressed for months that regulators could say “no” to the first-of-its-kind generic, and that even if Mylan did win the all-clear, a launch could take a while.

After all, GSK itself needed six months to get from approval to launch with its branded star. And while “we’re 15, 16 years down the road” and “people are more sophisticated now,” he said on the company’s Q4 conference call in February, it’s “not super trivial to just produce 20 million packs of supply overnight” for a product such as Advair’s complex Diskus inhaler.

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With those and other factors in mind, the British pharma giant has laid out two scenarios for Advair performance this year. If copycats don’t hit the U.S. market in 2017, GSK expects core earnings to expand by between 5% and 7% at constant exchange rates.

But if one does, Glaxo instead expects to see core earnings come in flat or decline by a single-digit percentage, with its star drug posting £1 billion ($1.26 billion) in U.S. sales—down from the £1.83 billion ($2.3 billion) it netted in 2016.