UK drugs giant GlaxoSmithKline (GSK) has been handed a short-term earnings lifeline for Advair Diskus, its now off-patent, prescription asthma medicine. The US Food and Drug Administration (FDA) has blocked the launch of Wixela Inhub in its current form, a generic competitor developed by US-listed pharma group Mylan.
This gives GSK an expanded window for exclusive sales of Advair Diskus. Even with limited promotional investment, Investec analyst Andrew Whitney envisages operating profit margins of over 80% on additional Advair Diskus sales in the US.
Advair Diskus generated $1.83bn of revenue for GSK in 2016.
Mylan's FDA hurdle
The FDA notified Mylan of its ruling over Wixela Inhub via a complete response letter. While this implies that alterations are required before approval will be given, the scale of the changes needed remains unknown.
But according to Investec analyst Whitney, even if the FDA only wants minor changes, the process will push back the launch of the generic drug by at least three months, and into the second half of 2017.
More than one competitor
Another generic alternative to GSK's Advair Diskus is also in the pipeline. Catchily-named VR315 is being developed by FTSE 250 biotech Hikma Pharmaceuticals (HIK), based on dry powder inhaler technology designed by Vectura (VEC).
Hikma is currently waiting for the FDA to approve VR315 but hopes to get the final sign-off from the regulator in May 2017.
