Glaxo scores a win and a loss as respiratory future takes shape

Analysis

The future shape of GlaxoSmithKline’s respiratory franchise shifted into closer view yesterday, with a green light for its new COPD therapy Anoro Ellipta in the US and the long-expected European approval of a generic version of Advair, the company’s top-selling respiratory drug.

The combination product, branded Seretide in Europe, has long been Glaxo’s flagship product, and even though competition from lower-cost versions and next-generation therapies is expected to erode sales, at this stage analysts expect it to remain the company’s big seller by a long stretch – consensus for sales in 2018 sits at $5bn. Anoro Ellipta, meanwhile, is seen pulling in almost $2bn by then, a hope that must be met to make up for the inevitable decline of Advair (see table below).

Gaining traction

The complications in proving the equivalence of combination respiratory products that use novel inhalers has protected big brands like Advair and AstraZeneca’s Symbicort in the US and Europe for a long time. But that protection is waning – branded generics have been available in Greece and Sweden for some time – and a marketing nod from regulators in Denmark yesterday for Sandoz’s AirFluSal opens the floodgates for further approvals throughout the European Union.

Still, uptake is unlikely to be swift, because the generic version will probably not be directly substitutable, and physicians will likely be very reluctant to switch stable asthma sufferers to a new product; this is after the frequently lengthy pricing negotiations with each country have been concluded. But in austerity-hit markets a cheaper product will inevitably gain traction, and market share growth for Seretide in Europe will become a thing of the past.

What the entry of generics means for Breo Elipta, Glaxo’s Seretide follow-on, is a bigger question for the company. Price cuts are already biting hard in Europe – the company said enforced cuts had dented European sales of Seretide by 4% in 2012, despite a 2% climb in volumes sold. The novel but no doubt pricey Breo Elipta will also be facing a formidable foe in the shape of Seretide copycats.

Over in the US, the timing of the entry of Advair generics is far from certain. But guidance documents released by the FDA a couple of months ago mean this is only a matter of time, and the same story will play out in this market as well (GSK moat breached as FDA issues generic Advair guidance, September 10, 2013).

The change shape of GlaxoSmithKline's asthma and COPD franchise
Annual sales WW ($m)
Product Pharmacology class Status  2012 2014 2016 2018
Seretide/Advair LABA & ICS Marketed 7,990 8,180 6,711 5,026
Anoro Ellipta LABA & LAMA Approved - 227 972 1,799
Breo Ellipta LABA & ICS Marketed - 276 1,046 1,759
Ventolin HFA SABA Marketed 999 1,089 1,123 1,149
Bosatria Anti-interleukin-5 (IL-5) MAb Phase III - - 87 328
Serevent LABA Marketed 230 188 159 126

Both Breo and Anoro – a combination of a long-acting beta 2 adrenoreceptor agonist (LABA) and long-acting muscarinic antagonist (LAMA), versus Breo’s LABA and corticosteroid – are forecast to generate close to $2bn in sales in 2018. But Glaxo faces a big challenge to persuade payers that their benefits justify their premium price.

As the first LABA/LAMA combination therapy approved for COPD, Anoro is seen as having a stronger market differentiation than Breo. However, even here it is likely to have to fight hard against cheaper single-agent products, particularly in austerity-hit regions.

But approval of Anoro is undoubtedly a notable event for Glaxo, which has continued to invest heavily in its respiratory franchise. Rival Novartis has suffered setbacks to its ambitions in this space, and a first-mover advantage for Anoro in the all-important US could make a real difference.

To contact the writer of this story email Amy Brown in London at AmyB@epvantage.com or follow @AmyEPVantage on Twitter.

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