- The Food and Drug Administration has rejected Novartis AG's generic copy of GlaxoSmithKline plc's blockbuster asthma treatment Advair, lowering the chances a copycat version of the drug enters the U.S. market this year.
- Novartis had expected to launch its copy this year but now believes that to be "highly unlikely" after receiving a Complete Response Letter from the FDA, a spokesperson for Novartis said in an emailed statement.
- Whether an Advair generic launches this year carries material consequences for GSK. The British drugmaker has forecast 2018 earnings per share to grow between 4% and 7% if no copycat version arrives. In the event a generic copy does launch, earnings would come in between flat or down 3%.
Securing FDA approval of a generic version of Advair (fluticasone propionate/salmeterol) hasn't proved easy. Last year, the regulator rejected copies from both Mylan NV and London-based Hikma Pharmaceuticals plc, sparing GSK a blow to its bottom line.
Advair pairs two active ingredients — the corticosteroid fluticasone propionate with the long-acting beta2-adrenergic agonist salmeterol — in an inhaled powder delivered by a specialized device.
Generic drugmakers must not only develop a copy of the drug itself, but also the device that delivers it. The FDA has made approving so-called complex generics a priority, but the collective struggle of three companies to secure an OK for an Advair generic hints at the difficulty generic makers face.
"We will be working with the agency to clarify the points raised in the [Complete Response Letter] and will provide further information when available," said Shawn Silvestri, head of global product development at Novartis' Sandoz unit. "We are committed to bringing our generic Advair to patients in the US as soon as possible."
On a recent earnings call, Novartis CEO Vas Narasimhan highlighted the FDA decision on Sandoz' copy as one of three key binary risks for the Swiss company in 2018, along with a forthcoming decision on a version of Copaxone (glatiramer acetate) 40mg.
For GSK, any delay in market entry of a low-cost copy to Advair is good news. The company expects a sales decline of between 20% and 25% in 2018 even if no generic reaches market. But a mid-year entry would lead to result in a greater than 50% drop in revenues, GSK estimates.
"Clearly in 2018 we face the potential challenge of generic Advair and the shape of our earnings trajectory over the medium term will be impacted by the timing of that," said GSK CEO Emma Walmsley on a Feb. 7 earnings call. "But we have planned for it and we are ready for it, and we are confident of delivery of our 2018 guidance."
Shares in GSK rose by nearly 3% Thursday morning, while Novartis stock traded down less than 1%.