Thanks to complex manufacturing, Novartis expects blockbuster Sandostatin LAR to steer clear of generics in 2020

First approved in 1998, Novartis’ Sandostatin LAR is an old-but-reliable drug when it comes to sales. And that's not likely to change this year—or so the Swiss drugmaker figures.

In its 2020 guidance, Novartis said it doesn’t expect U.S. generics before year's end, despite the fact that would-be rivals have been trying to replicate its complex formula for more than a decade, CEO Vas Narasimhan said last week.

There's a lot at stake: Sandostatin LAR generated $881 million in the States last year and $1.6 billion globally. And though producing it may be a challenge, generics giant Teva would be quite happy to prove Narasimhan wrong.

Copycat makers first took aim at Sandostatin LAR back in 2006 or 2007 in the U.S., Narasimhan said on the company's Q4 conference call with analysts. But so far, they've all failed, and for good reason.

It’s a “very complex formulation and a complex manufacturing process," the CEO said. Novartis has been monitoring the situation and has not “seen any activity in the channels to indicate an entrance."

Even when a generic hits, the company doesn’t expect a steep patent cliff, Narasimhan told analysts. Instead, it expects a “biosimilar type erosion,” and the company believes it can hang onto some market share despite discounted competition. 

Teva is "quite hopeful" it can reach the market by the end of the first half of 2020, Bryan Garnier analyst Eric Le Berrigaud said on the call. If that happens, Novartis would update analysts accordingly, Narasimhan responded.

The FDA approved the drug back in 1998. There are no remaining patent protections in the U.S., Europe or Japan, Novartis said in its recent annual report. Generics have launched in some European markets, but the drug still holds the entire U.S. and Japanese markets. 

RELATED: A $442M failure: After years of work and an FDA rejection, Novartis calls it quits on Advair copy 

Novartis well knows the challenges of producing a tough-to-copy brand. Its generics unit, Sandoz, has some recent experience on the other side of the coin. 

Along with its Q4 numbers, the company admitted it was discontinuing its generic Advair program after years of development and a prior FDA rejection. A spokesman said the company had reviewed the data and didn’t see a path to market within the next 18 months. With the discontinuation, Novartis took a $442 million charge on related investments.