The FDA rejection of Mylan NV's generic form of GlaxoSmithKline PLC's Advair asthma drug opens a window for several other companies to be first to market, according to analyst commentary.
On March 29, Mylan said in a statement that it had received a complete response letter from the FDA, essentially a rejection of its generic Advair, but did not disclose the FDA's concerns.
Hikma Pharmaceuticals PLC is awaiting a May FDA decision on its own generic for the lung medicine, and Novartis AG subsidiary Sandoz is developing one. Israel-based Teva Pharmaceutical Industries Ltd. won approval for an Advair-similar earlier this year.
Without knowing the reason for the FDA's decision on Mylan's product, it is difficult to forecast how long the delay will be or if this could have implications for other developers, Jeffrey Holford, equity analyst at Jefferies, said in a March 30 note. However, even if it is a minor issue, the earliest that Mylan could turn it around and expect an FDA decision would be July, he said.
Who will be 1st to market?
In a note the same day, Panmure Gordon & Co.'s David Cox said it is a stretch to assume that Mylan can resolve the FDA letter and get an approval in the next eight to nine months.
The delay could mean that Hikma and its partner Vectura Group PLC would be the first to bring an Advair generic to the U.S. market; the companies expect an FDA decision May 10. However, analysts are hedging their bets on that front, too, saying that without knowing the reason for Mylan's rejection, it is difficult to predict whether Hikma's drug will meet the same fate.
The news does not help sentiment for Hikma in the short term, Barclays' Israel Akinrinsola said in a March 30 note. Barclays' Hikma estimates assume a September launch for its generic, and the timing of Mylan's resubmission, should it happen, would be a key swing factor for Hikma guidance, Akinrinsola said.
The delay could have positive implications for Novartis' Sandoz and Teva, Cox said. Sandoz may have closed the gap on Mylan's lead to market during this time, while Teva could look to more aggressively launch its own generic now that they appear to have a one-year window, he said.
GSK: Advair already down
It is still likely that a generic Advair will enter the U.S. market in the near future, Holford said. Meanwhile, Advair sales — though significant — have also been declining globally without a generic on the U.S. market.
Sales were down 13% to £1.83 billion in 2016, representing a 7% volume decline and a 6% negative impact of price, according to the company's annual report.
GSK said that if no generic Advair is introduced in the U.S. this year, it expects 2017 core EPS growth of 5% to 7% at constant exchange rates, based on an expected U.S. Advair sales decline of 15% to 20%. If a competitor does make it to market, GSK forecast 2017 US Advair sales of about £1 billion, with core EPS flat to slightly declining.