Emma Walmsley, the former head of GlaxoSmithKline’s consumer unit who is about to take over the CEO perch at the British pharma giant (albeit for significantly less pay than her predecessor), just got some excellent short-term news: the Food and Drug Administration (FDA) has rejected generic drug maker Mylan’s (MYL) generic copycat of Advair, one of GSK’s flagship and best-selling treatments.
Advair is approved to treat asthma and chronic lung disease. It’s brought in more than $1 billion in annual sales every year since 2001, including $2.27 billion in 2017 U.S. sales alone.
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But as an older therapy, it’s now open to the treats presented by patent expiration and competition from generic drug makers. Mylan’s experimental copycat was the first major threat.
It’s unclear, if not surprising, that Mylan’s drug was rejected since the FDA has yet to approve a generic version of a complex, inhaled lung therapy. The initial buzzsaw doesn’t mean that Mylan is doomed; it’s entirely possible regulators may green light the treatment after certain changes are made. Still, Mylan shares sank more than 3% in Wednesday trading.
The news should give Walmsley a sigh of relief, though. GSK had previously stated that it expected U.S. Advair sales to fall by about one billion dollars in 2017 if generics were to enter the market by the year’s midway point. Without the pressure, the company thinks that it can realize about a 6% boost in earnings-per-share this year.