GSK gets double dose of good news for Breo Ellipta

GlaxoSmithKline ($GSK) got a double dose of good news today about its respiratory drug Breo Ellipta, known as Relvar Ellipta in other markets. Regulators in Europe recommended the potential blockbuster be approved there for COPD and asthma, while regulators in Japan gave it the OK for asthma.

Breo was approved in May by the FDA for two uses in COPD. The respiratory drug is one that GSK is leaning heavily on to pick up some of the sales vacuum that will come when generics of Advair finally take on the nearly $8 billion a year powerhouse. Analysts are predicting peak sales in the U.S. of about $1.3 billion for Breo. GSK is partnered with Theravance on the drug, and as an added bonus, is slated to pick up a $10 million milestone from Theravance ($THRX) upon approval in Japan.

"What is particularly exciting is that we have achieved the first of what we hope in the future could be many positive regulatory outcomes supporting the potential use of FF/VI in appropriate patients with asthma," said Patrick Vallance, GSK's president of pharmaceuticals R&D. "We eagerly await the final decision of the European Commission in the near future."

Approvals by the European Medicines Agency (EMA) usually comes shortly after a positive recommendation by its Committee for Medicinal Products for Human Use (CHMP).

GSK is on a roll with its respiratory drugs. An FDA committee this month issued an 11 to 2 panel vote in favor of new COPD combo therapy Anoro Ellipta from GSK and Theravance ($THRX). Analysts have predicted peak sales of $1.4 billion for Anoro if the FDA approves it. GSK is counting on that to help replace falling sales of Advair, which has underpinned Glaxo revenues for years. It actually lost patent protection in the U.S. in 2010, and there are generics approved, but the difficulty of replicating the drug's Diskus inhaler means those copies aren't automatically substitutable for the brand. That has deterred would-be copycats in the U.S. and most key European markets.

But that may soon change. The FDA a week ago issued guidance for the development of generic copies of combination inhaled drugs like Advair that requires only "relatively basic" preclinical tests and a short clinical trial. The guidance also only requires trials for asthma, despite Advair's approved use as a treatment for COPD. Analysts think this will lead to substitutable generics pronto.

Also putting a damper on GSK's good news Friday was its announcement that a new drug from it and Prosensa for treating Duchenne muscular dystrophy failed to significantly improve walking distance in patients. The companies were hoping the drug might lead in the field.

- here's the announcement about Europe
- see the announcement about Japan