Glaxo CEO says new lung meds are grabbing market share. Yes, really.

GlaxoSmithKline CEO Andrew Witty

Last week, GlaxoSmithKline ($GSK) CEO Andrew Witty told reporters something investors have long been hoping to hear: He sees the company's respiratory newcomers picking up steam. And that's not just some crystal-ball prediction for the future, he stressed. He's seeing it now.

"I am not saying to you on this call (that) I hope to see market share increase for respiratory--I am telling you the market shares have begun to go up in the last few weeks," Witty said, as quoted by Reuters.

That's good news for the company, whose respiratory decline--courtesy of aged blockbuster Advair--has caused some serious consternation (not to mention companywide layoffs). GSK promises that new lung drugs like Breo and Anoro can help close the gap, but so far, both wannabe blockbusters have fallen short of estimates--think £29 million ($44 million) in U.S. sales for Breo and £14 million ($21 million) for Anoro last year. And Advair? More than £4.2 billion ($6.4 billion).

The question now is whether Glaxo can keep the momentum going enough to fill the widening holes Advair generics and payer exclusions are shooting into the company's top line. That's a question even Witty can't answer. "What I am not guaranteeing is exactly how that is going to play out for the rest of the year," he said last week of the market-share grab.

Yes, Medicare Part D coverage has improved for the newcomers--Breo Ellipta boasted 74% and Anoro had 65% at of the start of this year, according to a company SEC filing. It's a big boost over last summer, when the Anoro number was just 30%. Glaxo also has the overall access lead on its rivals, Witty said on the company's Q4 conference call. Compared with "our biggest competitor in this marketplace, we have about a 20 percentage point advantage of access ... which is quite a big flip-around from last year," he said.

And yes, Glaxo has another pair of new U.S. launches in the works as it rolls out Incruse Ellipta for COPD and Arnuity Ellipta for asthma. It's also awaiting FDA decisions on Breo for use in asthma, and mepolizumab, a first-in-class anti-IL5 treatment, for severe asthma.

But while the pharma giant says it continues to expect total respiratory sales to return to growth in 2016 ("I think the probability of us achieving that is still absolutely game on," Witty said on the call), some analysts are still skeptical. "GSK invested heavily in developing its respiratory pipeline, but the expectation that it could compensate for the imminent patent cliff facing Seretide/Advair appears optimistic," GlobalData analyst Chloe Thornton said in a statement.

- get more from Reuters
- read the GlobalData release
- see the call transcript

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