GSK prepares for Advair competition
GlaxoSmithKline expects its respiratory drug Advair to report a decline in sales in 2017 in the event that generic versions of the drug are approved by the FDA.
During his last investor call — new CEO Emma Walmsley is expected to take over in March — GSK CEO Andrew Witty said the the blockbuster respiratory drug brought in $2.3 billion in U.S. sales but will likely generate only about $1.26 billion in sales in 2017 if generic competition arrives by mid-year.
“The timelines for the introduction of a generic are far from clear, and its impact will depend heavily on the pricing strategy and supply capacity deployed,” GSK CFO Simon Dingemans told investors.
The FDA is expected to make a decision about a Mylan generic by March 28 and another generic developed by Hikma and Vectura by May 10.
Considering variables such as the exact time of approval, launch date, and pricing dynamics, Witty said the $1.26 billion estimate “feels like a reasonably sensible balance of probabilities.”
He reminded investors that it took GSK six months to prepare Advair for launch after the drug received FDA approval. “Now we're 15 to 16 years down the road, people are more sophisticated,' Witty said. “But it's not trivial to just produce 20 million packs of supply overnight for a product like [a Diskus inhaler].”
GSK said that new products accounted for about $5.6 billion in sales in 2016. They include HIV drugs like Tivicay; respiratory therapies such as Anoro and Nucala; and its meningitis vaccines, Bexsero and Menveo.
The new product portfolio is expected to be the key driver of the anticipated 5% to 7% growth in 2017, said Witty. “It's clear that there is further organic growth flowing into the business,” he told investors.
Overall, GSK reported 6% growth in sales in 2016, to about $35 billion. Sales of all three of its business units grew — the pharmaceutical business grew 4% to $20.2 billion; the vaccines unit grew 14% to $5.8 billion; and its healthcare business grew 9% to $9 billion.