There has been a mixed response from analysts to the news that sales of GlaxoSmithKline’s blockbuster lung drug Advair are showing a significant slowdown in the USA.
US prescription data shows that sales of Advair/Seretide (salmeterol/fluticasone) for asthma and chronic obstructive pulmonary disease fell 7% in June and were down 5% in the year to date. Revenues from the drug across the Atlantic reached £2.90 billion last year, about 9% of GSK’s total sales.
The news prompted Goldman Sachs to issue a research note saying that “we believe GSK will underperform due to pressure on its Advair franchise”. Reiterating their ‘sell’ rating on the stock, the analysts also said they expect that generic versions of Advair would be available in Europe within six to nine months.
GSK has said that it believes there will not be much competition because even though copycat versions containing the same active ingredients will be available, the inhaler device used for Advair means that competing products will not be fully substitutable.
Matrix Group analyst Navid Malik seems to share GSK’s view, noting that Advair has indeed been slowing this year, but “the lack of generic competition in the near term should keep the franchise broadly stable as GSK attempts to bring Relovair (fluticasone/vilanterol), its successor product, to the market”.
Focus on the pipeline – Matrix
He added that “our main focus is on the GSK pipeline where 12 of its 15 assets are due to read out Phase III trial data before the end of 2012”. These include a number of new potential blockbusters including Relovair, MAGE-A3, a vaccine “which could create a paradigm shift in lung cancer options” and darapladib, in development for atherosclerosis heart disease as a follow on to statins._
The UK drugs major is positioning itself to return to top-line revenue growth in 2012, Mr Malik said, “just at a time when the industry faces the prospect of several years of generic competition to a number of significant blockbusters”. He noted that “the market is sanguine” on its pipeline “owing to a lack of confidence in GSK’s ability to deliver enough blockbusters to execute its next phase of growth”.
However, he added that “we strongly disagree” and Matrix expects the lupus drug Benlysta (belimumab) approved in March in the USA and given a positive opinion in Europe in May, “to show how GSK can deliver innovative potential blockbuster products”.
Dr Reddy’s version of Arixtra approved by FDA
Meantime, GSK is facing generic competition to Arixtra (fondaparinux) for deep vein thrombosis, after the US Food & Drug Administration approved Dr Reddy’s Laboratories’ version, developed with Australia’s Alchemia, of the drug.
The US patents on Arixtra expired in 2002, the year before the drug was launched in the USA. The drug had US sales of some $340 million (year-on-year growth of 16%) for the year ending May 2011.
GV Prasad, Dr Reddy’s chief executive, said “given that this is a complex generic molecule which is difficult to manufacture at scale, competition is likely to be limited for the foreseeable future”. He added that the Indian drugmaker “will promptly execute a phased launch that initially plays to our strengths in select wholesale and retail outlets”.
