Teva AirDuo Poised To Be A Discounted, But Not Interchangeable, Version Of Advair
Executive Summary
FDA approved Teva’s AirDuo RespiClick, which contains the active ingredients in GlaxoSmithKline’s Advair, but in the RespiClick device, which means it will not be an interchangeable generic.
Teva Pharmaceutical Industries Ltd. is poised to launch what is expected to be the first discounted version of GlaxoSmithKline PLC’s blockbuster asthma drug Advair (fluticasone/salmeterol) in the US, AirDuo RespiClick (fluticasone/salmeterol), which comprises the same active ingredients as Advair delivered through a different device than GSK’s Diskus. But the launch may have lost some of its punch.
Teva announced Jan. 30 that FDA approved AirDuo and ArmonAir (fluticasone), and that both drugs will launch “later this year.” GSK also markets fluticasone as monotherapy as Flovent.
AirDuo, which combines the inhaled corticosteroid fluticasone with the long-acting beta2 adrenergic agonist salmeterol, will not be directly interchangeable with Advair because of dosing and delivery differences and because it was approved through FDA’s 505(b)2 pathway for new drugs in which some of the data is based on studies conducted for an existing medicine, rather than the traditional abbreviated new drug application (ANDA) for generics. As a result, it’s not clear how much of a threat AirDuo will be to brand Advair.
Teva’s drugs are also only approved for asthma maintenance, and not chronic obstructive pulmonary disease (COPD), while Advair is approved for both indications. Teva said it did not choose to pursue the COPD indication. In another variation, Advair is approved for children four and older, while AirDuo and ArmonAir are approved for children 12 and older. Teva said it is currently running pediatric studies.
Teva outlined ambitions to develop a competitor to Advair using the 505(b)2 pathway back in 2010. (Also see "Teva Has Grand Ambitions In Respiratory Disease, With An Eye On Advair" - Pink Sheet, 4 Nov, 2010.) At the time, the company wasn’t convinced an interchangeable generic would be approved by FDA within a mid-term horizon timeline. However, FDA unveiled bioequivalence standards to guide sponsors in the development of an interchangeable generic in 2013, at which time Teva reprioritized the development of a substitutable generic. (Also see "Teva Changes Its Tune On Substitutable Generic Advair" - Pink Sheet, 8 Oct, 2013.)
The company now has two potential substitutable generic versions of Advair in development, one gained through the acquisition of Allergan PLC’s generic drug business last year, but it is behind rivals Mylan NV and Hikma Pharmaceuticals PLC, both of which have ANDAs pending at FDA, with action dates of March 28 and May 10, respectively. Teva has previously said it is on track to file a substitutable generic in late 2017 or 2018.
Given the challenges associated with developing generics of complex respiratory drugs, particularly one like Advair that combines two active ingredients, there is no guarantee FDA will approve the drugs on a first review, which means generic Advair is one of the biggest potential commercial opportunities for generic manufacturers in 2017 but remains in question. (Also see "Advair: A Big Generic Opportunity And A Big Question Mark In 2017" - Scrip, 29 Dec, 2016.) US sales of Advair were £1.87bn ($2.35bn) in 2015.
GSK, in an email, downplayed the approval, highlighting the asthma-only indication and the fact that AirDuo is not a substitutable version of Advair. Indeed, management has talked frequently about how it believes GSK will be able to defend Advair against limited generic entry because the price of the brand has dropped significantly in the last three years amid increased competition and pushback from payers. (Also see "Stayin’ Alive: GSK Sees Options For Brand Advair In A Post-Generic World" - Scrip, 26 Oct, 2016.)
The company, meanwhile, is turning attention to new respiratory drugs like the next-generation, once-daily ICS/LABA combination Breo Ellipta and a LABA/long-acting muscarinic antagonist (LAMA) combination Ellipta.
Teva would not say how it plans to price the drugs, only that they will be priced “competitively.” The company already sells ProAir (albuterol), a rescue inhaler on the RespiClick platform. According to an analysis by Evercore ISI analyst Umer Raffat, the wholesale acquisition cost of Advair currently ranges from $291 to $475 per month depending on the dosing. The WAC for Breo is $322 per month.
“I believe pace of launch will be contingent on whether Teva is aggressive with its pricing strategy,” Raffat said in the same-day email to investors. He pointed out that management previously guided to $200m in peak sales for AirDuo and forecast minimal sales in 2017.
AirDuo and ArmonAir are each approved in three strengths and administered twice daily. The approval was based on three Phase III clinical trials evaluating the safety and efficacy of the drugs in adolescents and adults with asthma. Both therapies demonstrated greater benefit versus placebo in the improvement of lung function after 12 weeks of treatment as measured by Forced Expiratory Volume in one second (FEV1).