Generics makers are finally taking aim at GlaxoSmithKline's ($GSK) hard-to-copy respiratory behemoth Advair, and Mylan ($MYL) refuses to be left behind.
On Friday, the drugmaker announced that the FDA had accepted its application for a copy of the standout drug, with a decision set for March 28, 2017. According to Bernstein analyst Ronny Gal, Mylan is now the third drugmaker with a pending application, behind Hikma and Novartis' ($NVS) Sandoz; he wrote Monday that he expects those companies will have a similar review time.
It's good news for Mylan, which is working to expand as two of its biggest rivals prepare to join hands. Teva ($TEVA) is currently pushing forward with a $40.5 billion deal to buy Allergan's ($AGN) generics business, meaning the Big Four generics makers--Teva, Novartis' Sandoz, Mylan and Allergan--will soon see their numbers dwindle to three. On that front, it recently inked a deal for Sweden's Meda, and any piece of Advair's blockbuster revenues it can grab will help it bulk up, too.
Of course, those revenues won't be coming right away--and Gal doesn't even think they'll be coming in 2017. Thanks to its Diskus inhaler technology, Advair has been foiling generic competitors for years--Mylan's biggest rivals included--and "our view is that it is tough to see such complex drug-device as first round approval," he wrote. Instead, he thinks the first quarter of 2018 is more likely for a rollout, although he noted that he "could be surprised."
Meanwhile, GlaxoSmithKline has already had plenty of extra time to prep itself for the blow, and as CEO Andrew Witty told investors on the company's Q4 conference call, the drugmaker is in pretty good shape. Advair has already taken a beating in the U.S. on account of payer pressure, and GSK expects the drug's sales to fall another 20% or so this year. But it also expects its pharma unit to return to growth this year, thanks to stepped-up contributions from newcomer respiratory meds like Breo, Anoro and Incruse.
"Will we go through some volatility in the year that there is, if there ever is, a generic Advair? Of course we will," Witty said. "But … whenever it comes, the impact of that is going to be relatively limited in the overall scheme of the group. … We're very optimistic about where we land in terms of than the ongoing scale of the respiratory business going forward."
- see Mylan's release
- read the GSK call transcript
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