GlaxoSmithKline's ($GSK) respiratory franchise is going to have a lot of ground to make up once generic competition inevitably erodes sales of the $8.8 billion-selling Advair. While it's still unclear how long copycats will take to make a serious dent, Glaxo may soon have a new building block with European regulators' new recommendation for combo med Anoro.
On Thursday, the European Medicines Agency (EMA) recommended the drug as a once-daily treatment for COPD symptoms. It was granted U.S. approval in December. According to estimates compiled by Bloomberg, a thumbs-up in Europe could help the dry-powder inhaler treatment score $1.25 billion in 2016 sales. And Citigroup analysts expect the market for the disease, already hefty at $10 billion, to climb to $14 billion by 2018, the news service notes.
That's good news for Glaxo, which beat out companies with treatments still in development, including Novartis ($NVS) and AstraZeneca ($AZN). GSK will need a serious revenue contribution from Anoro, as well as another potential COPD blockbuster, Breo Ellipta, approved by the FDA in May; some have forecast that treatment to pass the $1 billion-dollar benchmark by 2018. Even with the pair of new drugs on the market, Advair's giant shoes will be tough to fill. The respiratory behemoth is Glaxo's top seller, pulling in close to 20% of its revenue. But those numbers won't last forever.
The asthma drug, already off-patent, has so far foiled generics makers' attempts at a directly substitutable copy thanks to its difficult-to-replicate Diskus inhaler technology. Overall sales of the treatment rose 4% in 2013 driven by strong U.S. gains. But its lead is slipping. As of Jan. 24, Advair controlled 61.6% of the U.S. market, down from 67.2% in October; AstraZeneca's Symbicort now has 30% market share, with Merck's ($MRK) Dulera at 8.4%
Competition is fiercer in Europe, where sales are already declining. Known as Seretide across the pond, the treatment's revenues slipped 2% last year in rivalry with treatments like Symbicort, for which the EMA approved a Teva ($TEVA) generic on Friday that could also threaten market share. In December, Novartis' Sandoz picked up its first approval for Advair generic AirFluSal Forspiro, and it now boasts nods in a handful of EU countries, including Germany.
Novartis could prove a thorn in Glaxo's side when it comes to Anoro's market share, too: Once approved, the drug will square off against Ultibro Breezhaler, a therapy from the Swiss drug giant that works in a similar way.
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Special Reports: The 15 best-selling drugs of 2012 - Advair/Seretide | New FDA drug approvals of 2013 - Breo Ellipta - Anoro Ellipta