- Novartis will not bring forward a generic version of GlaxoSmithKline's lung treatment Advair, disclosing Wednesday that it has stopped work on its copy after years of development.
- As a result, the Swiss drugmaker recorded an impairment charge of $442 million related to its write-down of the generic drug program.
- Novartis' ambitions for launching an Advair generic were knocked back in 2018 by the Food and Drug Administration, which rejected its application for approval. Anticipating a long and uncertain path ahead, the company opted instead to shut down development.
Novartis' decision leaves Mylan in a stronger position as the sole drugmaker to win U.S. approval for a generic version of Advair (fluticasone/salmeterol).
That effort, which yielded Mylan an FDA OK in January 2019, cost the West Virginia-based company hundreds of millions of dollars in development spending and it seems Novartis wasn't keen to do the same.
"Following a recent review of our data readouts, we no longer see a pathway to launch in the next 18 months and, as a result, we've decided to discontinue further development," said Richard Saynor, CEO of Novartis' Sandoz division, on a Wednesday conference call.
While the FDA had rejected Novartis copy once before, CEO Vas Narasimhan said the decision to shelve the program was "data driven" rather than stemming from negative regulatory feedback.
The disclosure was made alongside fourth quarter earnings, which showed Sandoz sales declined 1% globally and 10% in the U.S. in 2019, compared to the year prior.
Novartis expects sales to rebound with low single-digit growth in 2020, but the performance prompted questions from Wall Street analysts of whether the division was holding back Novartis' shift toward high-margin pharmaceuticals.
"We're committed to the business and continue to drive the margins up to the mid-20s," said Narasimhan, who signed off on a sale in 2018 of the division's "oral solids" and dermatology drugs to Aurobindo Pharma. The deal remains pending.
Even without a Novartis entry on the horizon, GSK's sales of Advair have declined precipitously in the U.S., falling by half in the first nine months of 2019 due to Mylan's generic launch. The company launched its copy, dubbed Wixela Inhub, at a 70% discount to GSK's branded Advair.
Advair is a combination of two drugs delivered via an inhaler and, as such, is particularly complicated to copy. Such "complex generics" have been a focus for the FDA, which hopes to see make more lower cost drugs available to patients.
"We must continue efforts to get generic copies of complex drugs to market," wrote former FDA commissioner Scott Gottlieb on Twitter. "There is a large category of brand drugs that are off patent and off exclusivities and should be subject to brisk generic competition, but are not."