GlaxoSmithKline's Breo nod augurs new respiratory franchise, analysts say

The FDA granted approval to GlaxoSmithKline's ($GSK) new respiratory drug Breo Ellipta. By itself, that's a solid victory for GSK, which needs to build up its respiratory franchise before Advair copycats finally make their way to market. Analysts figure Breo for a blockbuster in the U.S., with peak sales at around $1.3 billion.

But some market-watchers also see the Breo nod as a harbinger of more good news ahead. European regulators are expected to decide on Breo later this year, and the FDA is set for a December decision on another GSK respiratory drug, Anoro. Plus, the FDA not only ushered Breo onto the market, but also granted two uses, including maintenance treatment. Additionally, Leerink Swann analysts figure, Breo's supporting data isn't as strong as the underpinning for Anoro, so the latter's chances look even better now.

"[W]e believe the approval and label fell into the best case scenario, with both indications and similar safety warnings comparable to the Advair label," the analysts said in an investor note. The Breo approval, then, could be the cornerstone of a "new respiratory portfolio for GSK" and its partner on both drugs, Theravance. The firm estimates peak Breo/Relvar sales at about $2.4 billion globally.

Glaxo has reaped big rewards from Advair and its alter ego, Seretide, for many years, and despite its loss of U.S. patent protection back in 2010, the drug remains GSK's largest product. Worldwide sales grew last year by 1% to £5.5 billion, or about $7.7 billion. Though more than one generics maker has approval for an Advair copy, the difficulty of mimicking the drug's Diskus inhaler means those copies aren't automatically substitutable for the brand. And that difficulty has put off would-be copycats in the U.S. and most key European markets.

Eventually, however, Advair generics will hit. U.S.-based Mylan ($MYL), for instance, made a deal with Pfizer in 2011 for drug and delivery technology that could substitute for Advair Diskus. But so far, GSK and some generics makers are skeptical that directly substitutable copies will be sold before 2016, Leerink Swann says. And that gives Glaxo the chance to grow its franchise beyond Advair in the U.S. That all depends, of course, on what E.U. and U.S. regulators actually do next.

- read GSK's joint release with Theravance
- see FierceBiotech's story

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