Earlier this year, the FDA knocked back two generic versions of Advair, which is used in the treatment of various lung diseases, including asthma.
The developers of the generics – Mylan, and a partnership between Hikma and Vectura – will now struggle to secure approval for their drugs in 2017.
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This has left Novartis, which was originally trailing in the race to bring a generic to market, closest to taking a slice out of the multi-billion-dollar revenue haul of Advair, which generated $4.4 billion for GlaxoSmithKline (GSK) in 2016 alone.
Tactical genius?
Analysts are speculating that Novartis’s prime positioning is not a coincidence. Last October, Novartis urged the FDA in a citizen petition to only approve Advair generics that meet certain conditions.
Evercore ISI’s Umer Raffat believes this tactic may have succeeded in delaying competitors: “Had the FDA denied the Sandoz citizen’s petition outright, it may have implied that the FDA does not deem Sandoz's point to be important, and the odds of generic approval [for Mylan] would have been higher. But, that didn't happen.
Boost for GSK
These regulatory hurdles have also benefited GSK, which has been preparing for generic competition to Advair by developing respiratory successors, Two of these, Relvar and Anoro, received FDA approval in 2013.
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By GlobalDataIf a generic arrives on the market mid-year, the company expects its core earning to come in flat or decline by a single-digit percentage.
However, if it can pass through 2017 unscathed by added competition to its top seller, it expects its core earnings to grow by 5–7%.
