AstraZeneca's Almirall buy yields its first new drug--and now, AZ has to sell it

With the EU approval of COPD med Duaklir, AstraZeneca ($AZN) is getting exactly what it wanted when it sealed a deal for Almirall's respiratory portfolio earlier this month. The only problem? Calling the market crowded is an understatement.

When Duaklir launches in Europe--sometime in the first months of 2015, Reuters reports--it'll join a host of other respiratory products vying for market share. For starters, there's GlaxoSmithKline's ($GSK) reigning champion Seretide, whose market share is slipping much more slowly on the continent than it is in the U.S., where it's known as Advair. There are generic Advair competitors like Novartis' ($NVS) AirFluSal Forspiro and Cipla's Salmeterol/Fluticasone. Then, there's AZ's own aging blockbuster, Symbicort, and its copycat DuoResp Spiromax from Teva ($TEVA).

Things are even tight within Duaklir's own class of combo meds, which combine long-acting beta2 agonists with long-acting muscarinic antagonists to ease airway muscles. Novartis' fixed-dose LABA/LAMA, dubbed Ultibro Breezhaler, won European approval last year. Glaxo's Anoro, meant to pick up some of the sales slack as Advair wanes, followed with a green light in May. Boehringer Ingelheim isn't far behind, boasting a late-stage competitor--composed of for-sale meds Striverdi and Spiriva--that recently met its main goals in Phase III.

Courtesy of AstraZeneca

Still, for AstraZeneca's respiratory franchise, the approval is welcome news. Aging Symbicort won't be able to keep up its $3.44-billion-a-year-act forever, and pipeline prospect benralizumab recently flopped in a Phase IIa study for COPD.

And though Teva's Symbicort generic isn't approved in the U.S., payers have jumped into the mix to make the situation hairy for the British pharma giant. Earlier this year, aggressive discounts helped it gain ground on Advair, with sales growing by 30% in Q2 as it capitalized on that drug's Express Scripts ($ESRX) formulary exclusion. But then Glaxo shot back: Its willingness to negotiate on price convinced CVS Caremark ($CVS) to knock Symbicort off next year's "covered" list.

"At a minimum, we would expect AZN to lose several percentage points of TRx share from this change in 2015," Leerink Partners analyst Seamus Fernandez wrote in a note to clients this summer.

- read AZ's release
- see Reuters' brief

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