Shire's new dry-eye approval means it's time for an Allergan showdown

Shire

Shire ($SHPG) has the approval it’s been waiting for--and the label it wanted, too.

Late Monday, the FDA green-lighted dry-eye candidate lifitegrast, to be marketed under the brand name Xiidra. And the go-ahead is for both symptoms and signs of the condition--a label that Evercore ISI analyst Umer Raffat said “reads favorably for lifitegrast’s perception in the marketplace” as it faces down rival Restasis from Allergan ($AGN).

The med has taken longer to get to this point than Shire once hoped. Back in October, U.S. regulators handed down a rejection for the Dublin drugmaker, asking for an additional study and more product quality before they would bestow their favor. Shire was quick to meet their requests, though, rounding up positive data that dropped one week after the setback and turning right around with January resubmission.

Free Webinar

Striving for Zero in Quality & Manufacturing

Pharmaceutical and medical device manufacturers strive towards a culture of zero – zero hazards, zero defects, and zero waste. This webinar will discuss the role that content management plays in pharmaceutical manufacturing to help companies reach the goal of zero in Quality and Manufacturing.

Now, it’ll get a shot at a market that Bernstein analyst Ronny Gal expects to grow to close to $2 billion, he wrote in a Tuesday investor note. And it’ll also get a shot at stealing share from Restasis, an Allergan blockbuster he expects to decline from $1.3 billion to $900 million in 2020.

The reason? Restasis lacks Xiidra’s full dry eye label; it’s indicated only for “tear production.” That difference will buoy Xiidra in the marketplace, Raffat wrote in a Monday note to clients, and it could also help Shire make a case for pricing the newcomer at a premium to its nemesis.

But Allergan investors needn’t fret. “The key point regarding the competitive matchup is that it will likely be a stable oligopoly,” Gal wrote, noting that while Shire has the label advantage--plus a shorter onset of action--Allergan “enjoys the power of incumbency,” including contracts, sales and an established patient pool.

And even if Xiidra does grab some Restasis volume--say, 30% over time, Raffat estimates--Allergan may be able to offset about 10% to 15% of the top through a series of price increases, he figures.

- read Shire's release

Related Articles:
Allergan's Restasis defense stumbles at FDA as Shire loads up lifitegrast assault
Allergan pooh-poohs threat from Shire's prospective dry-eye drug
Shire's back on track with its dry-eye threat to Allergan's Restasis
Shire's eye drug setback gives Allergan's Restasis a temporary reprieve

Suggested Articles

Pfizer has scored FDA approval for its Humira biosimilar, but it can't launch the product for several years under a patent settlement.

The 3-2 vote on the deal was split along the party lines, spelling trouble for future biopharma M&A deals should Democrats move into the White House.

Recipharm has been building its capabilities in sterile injectable and inhalation drugs. Now it is buying a CDMO that manufactures devices for both.