New FDA guidance threatens GlaxoSmithKline's Advair

For a long time, the difficulty of replicating GlaxoSmithKline's ($GSK) Advair has put off would-be copycats. Despite losing patent protection in 2010, the asthma treatment remains Glaxo's best-selling product. But now, the FDA has released new draft guidance that could change all that.

Monday, regulators issued guidance for the development of generic copies of combination inhaled drugs like Advair, a drug many assumed would not see fully substitutable generic versions in the U.S., Reuters says. Without easy substitution, generic versions would have to compete with Advair as other branded drugs might, limiting their success. But according to a note from Bloomberg Industries analyst Sam Fazeli, the new guidance 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 chronic obstructive pulmonary disease (COPD).

The threat of "true" generics scared investors and sent shares down as much as 3.6%, Bloomberg reports. The London-based drug giant has a lot at stake, with worldwide sales of the drug totaling about $7.7 billion in 2012 and accounting for about 20% of GSK's annual sales. But Glaxo still insists creating an effective substitute for the best-seller--most notably its Diskus inhaler drug-delivery technology--is a difficult task. "We believe the manufacture of combination respiratory medicines such as Advair presents significant hurdles and remains extremely challenging," a spokesman told Reuters.

So far, that's proven true. Generics mainstays like Teva Pharmaceutical Industries ($TEVA) and Novartis' ($NVS) Sandoz unit have shied away from the task, instead opting to develop branded competitors or folding on the project altogether. But generics makers won't hold off forever. In 2011, Mylan ($MYL) struck a deal with Pfizer ($PFE) for technology that could substitute for Advair Diskus. Until now, though, skeptics had predicted sales of those copies would hold off until 2016, giving GSK the chance to flesh out its respiratory franchise.

And while Glaxo hopes it can do just that, it's at the mercy of regulators. The company scored approval for respiratory drug Breo Ellipta in May, and the FDA is set to decide on another lung drug, Anoro, in December. An advisory panel will convene today to consider Anoro's cardiovascular safety.

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