Glaxo scores again as FDA strikes down would-be Advair copycats Hikma, Vectura

GlaxoSmithKline HQ
GlaxoSmithKline expects its core earnings to increase by 5% to 7% this year if no Advair generics hit the scene.

GlaxoSmithKline has dodged yet another bullet on the generic Advair front.

Partners Hikma and Vectura revealed Thursday that the FDA had struck down their knockoff version of the respiratory blockbuster. And given “the nature of the feedback” from FDA officials, the companies now see approval this year as a long shot.

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

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The rejection comes as no surprise to many industry watchers—or to Glaxo itself. The company has warned repeatedly that copying Advair, delivered via its proprietary Diskus inhaler, wouldn’t be an easy task. Hikma and Vectura’s FDA “no” follows one given Mylan—the only other company so far to receive a generic Advair decision—in late March.

Hikma and Vectura said Thursday that the agency's complete response letter (CRL) turning back their application was classified as "major," meaning significant work lies ahead before their Advair competitor can make its debut.

RELATED: How much Advair pain does GSK expect? Its 2017 forecast lays out the numbers

It’s a clear win for GSK, which stood to suffer significantly if a generic hit this year. The company has predicted that the midyear arrival of a generic would depress core earnings to flat, best case, or a single-digit percentage decline.

If no copies turn up, though? The company sees core earnings growing by 5% to 7% for the year. Thus, the Hikma rejection takes some weight off new CEO Emma Walmsley, who took the Glaxo helm at the end of March.

Of course, the British drugmaker isn’t actually ready to call a copycat-free 2017; plenty of question marks surround Mylan’s miss, and the generics giant didn’t do much to clear those up on its earnings call this week.

Although Mylan’s rejection letter was also classified as “major" by regulators, “we have a difference of opinion with the agency on certain items raised in the CRL,” Mylan President Rajiv Malik told investors—and the company thinks talking things out with regulators could “potentially change this designation.”

With that in mind, Mylan says it won't be ready to update shareholders about the Advair delay until after it meets with regulators—which could “happen any moment or any day,” Malik said.

RELATED: Pressuring GSK's Advair, Teva launches both AirDuo RespiClick and authorized generic

Meanwhile, Glaxo isn’t the only company benefitting from the setbacks. Other generics competitors, namely behemoths Teva and Novartis’ Sandoz, are scoring, too. Teva, which late last month launched a nonsubstitutable authorized generic at a discount of between 69% to 81%, is now positioned “very well in the Advair market,” Evercore ISI analyst Umer Raffat wrote in a note to clients.

And Sandoz, which was far enough behind Mylan and Hikma with its own filing that it petitioned the FDA for stricter approval standards, is now back in the game.

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