- GlaxoSmithKline reported sinking sales for the first quarter of 2019 following Mylan's launch of a generic version of asthma drug Advair in January. Sales tumbled 536 million pounds, or about $700 million, compared to the fourth quarter last year as Mylan's aggressive discounting took market share away.
- The U.K.-based big pharma reiterated its guidance that adjusted earnings per share would fall between 5% to 9% as sales recede and as the company absorbs the impact of its $5.1 billion acquisition of oncology specialist Tesaro.
- Growth will resume in 2020 as new products pick up the slack, the company claimed Wednesday. HIV treatments and vaccines are seeing increased sales, while an investment in the oncology pipeline may pay off in coming years.
Even when a company telegraphs that sales will fall thanks to competition, it's difficult to put a positive spin on a quarter like GSK just had.
London-traded shares fell 2% after the earnings release, which put plainly how Mylan's Wixela Inhub (fluticasone propionate and salmeterol) had damaged sales of Advair. Shares had recovered to 1% of losses late in the day U.K. time.
Advair had weathered generic threats for years, thanks to its patent estate as well as the complexity of its Diskus dry powder inhalation device. Then Mylan's Wixela matched Advair closely enough that it was given approval as a "substitutable" generic, meaning pharmacists can recommend that patients use it rather than the GSK product.
Teva had previously introduced a fluticasone/salmeterol combination called AirDuo RespiClick, but it did not gain the substitutable status that propelled Wixela.
The signs for GSK were bad early. Wixela secured a 24% of the market three weeks into the launch and by the end of the week of April 19 held a 28% share, according to Iqvia data analyzed by RBC Capital Markets.
It's likely to get worse, GSK executives said. "The full impact of the Advair generic has yet to be felt," Ian Mackay, GSK's finance chief, said in a call with analysts Wednesday.
Other parts of the respiratory business also had difficulties. Nucala (mepolizumab) sales stumbled from 173 million pounds to 152 million pounds from the fourth quarter of 2018 to the first quarter of 2019. Executives said they expect to turn that around, and noted that new patient starts have drawn even with its nearest competitor, AstraZeneca's Fasenra (benralizumab).
On the other hand, Trelegy (fluticasone furoate, umeclidinium and vilanterol), a third respiratory agent, improved modestly, from 77 million pounds to 87 million pounds.
HIV drugs and vaccines have a better outlook, as both include new products that can drive growth.
In HIV, Dovato (dolutegravir and lamivudine) launched earlier this month as a two-drug regimen for newly diagnosed patients, and the shingles preventive shot Shingrix (zoster vaccine) is likely to take share from Merck & Co's Zostavax thanks to superior efficacy.
Like many struggling big pharmas, GSK has embraced oncology as a lifeline. In spite of the price tag for the Tesaro acquisition, Zejula (niraparib) sales began adding to the company's top line, to the tune of 42 million pounds this quarter. Data due by the end of 2019 could help it move to a front-line maintenance setting to take on AstraZeneca's Lynparza (olaparib).
One of the more closely watched pipeline projects, the multiple myeloma treatment belantamab mafodotin (GSK2857916), is expected to generate data in the fourth-line setting, which if positive should allow for a regulatory filing by the end of 2019.