Prospect of Generic Asthma Drug Advair Hits Glaxo
PHILADELPHIA, Sept. 11, 2013 (PHILADELPHIA INQUIRER)--GlaxoSmithKline P.L.C.'s top-selling drug by far is the asthma medication Advair, which accounts for about 20 percent of company revenue, but generic competition got a bit closer to reality this week.
Advair is delivered to patients through an inhaler. Besides any existing patents, brand-name drug companies like Glaxo have hoped that the combination of a drug and a device would delay Food and Drug Administration issuance of guidelines for generic manufacturers who hope to make equivalent products.
The FDA issued such guidance for generic Advair on Monday, though the guidance is not final.
Glaxo, which is based in London and has operations around Philadelphia, had $10.2 billion in total revenue in the second quarter. Advair accounted for $2.1 billion of that total, with $1.1 billion of that from sales in the United States.
Glaxo's second-biggest revenue generator in the second quarter was Avodart ($340 million), which men use to treat urinary problems related to an enlarged prostate.
Like other brand-name companies with complex drugs that have delivery systems, Glaxo had hoped the FDA would require any generic companies to prove their versions of Advair can stand on their own -- meaning with the same long, expensive clinical trials that original drugs require.
"Unfortunately for GSK, this new draft guidance document suggests otherwise," Bernstein Research analyst Tim Anderson wrote in a note to clients.
Anderson figures it will be 2016, when the patent expires, that generics would first enter the market, but he allowed for generic companies taking longer to sort out the complexities of the medicine.
Anderson noted that because many other analysts had not predicted any generic competitors in the United States, the stock might take a hit.
On Monday, it fell $1.21, to $50.46. The stock dropped 4 cents, to $50.42, on Tuesday.
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Posted: September 2013