Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

GlaxoSmithKline plc (ADR) (GSK), Theravance Inc (THRX), Teva Pharmaceutical Industries Ltd (ADR) (TEVA): Could a Pair of Respiratory Disease Treatments Save This Big Pharma?

Page 1 of 2

GlaxoSmithKline plc (ADR) (NYSE:GSK) and its partner Theravance Inc (NASDAQ:THRX) recently scored a second victory in their quest to treat chronic obstructive pulmonary disease, commonly abbreviated as COPD — an umbrella term that includes emphysema and chronic bronchitis. The disease affects approximately 210 million people globally, and is expected to be the third leading cause of death by 2020.

GSK’s COPD drug candidate, Anoro Ellipta, received a favorable 11 to 2 advisory vote from the Pulmonary-Allergy Drugs Advisory Committee of the U.S. FDA, putting it on track for a possible final approval by the end of the year.

GlaxoSmithKline plc (ADR) (NYSE:GSK)

A second victory in the COPD combo race

Back in May, GlaxoSmithKline plc (ADR) (NYSE:GSK) and Theravance Inc (NASDAQ:THRX) obtained FDA approval for Breo Ellipta, a long-term maintenance therapy for COPD. If Anoro Ellipta is also approved, Glaxo will have a pair of blockbusters as Breo is forecast to hit peak sales of $1.3 billion while Anoro should reach $1.4 billion.

Anoro Ellipta combines umeclidinium, which improves lung function, with vilanterol, which relaxes the muscles in the airways. By comparison, Breo Ellipta combines fluticasone, an inflammation-reducing corticosteroid, with vilanterol. Anoro is intended for all COPD patients who have trouble breathing, while Breo is intended for patients who are at risk of the disease worsening.

Will this pair offset the loss of Advair?

Those two potential blockbusters could offset the loss of patent exclusivity for GSK’s former top seller Advair, an older COPD and asthma treatment that lost patent protection in the U.S. in 2010 and will lose patent protection in Europe later this year.

Advair, known as Seretide globally, accounted for a fifth of GlaxoSmithKline plc (ADR) (NYSE:GSK)’s top line last quarter and generated $7.8 billion in sales last year. Although Advair’s patent has expired in the United States, its largest market, the drug must be dispensed via a device known as a Diskus. The Diskus, which is patent protected until 2016, has proven difficult for other companies like Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and Mylan to replicate.

As a result, generic Advair still hasn’t appeared on the market yet. GlaxoSmithKline plc (ADR) (NYSE:GSK) knows that it’s only a matter of time before one arrives, however, and it is preparing for that inevitability with Breo and Anoro Ellipta.

What the victory means for Theravance

Theravance Inc (NASDAQ:THRX) will gain 6.5% to 10% in tiered royalty payments if Anoro is approved. Theravance already has an agreement with GlaxoSmithKline plc (ADR) (NYSE:GSK) for 15% of royalties from sales of Revlar, Ellipta, Breo Ellipta, and vilanterol monotherapy before global sales hit $3 billion. That cut declines to 5% after $3 billion is achieved.

Theravance Inc (NASDAQ:THRX) decided earlier this year to split into two companies — Royalty Management Company and Theravance Biopharma — with the former retaining the development of its respiratory treatments and the latter focusing on the development and commercialization of small-molecule therapies in untapped markets.

The market is still crowded with old players

Due to the rising prevalence of COPD, the market is getting increasingly crowded with treatments.

AstraZeneca plc (ADR) (NYSE:AZN)‘s Symbicort, which generated $3.2 billion in sales in 2012, is another top-selling treatment being eyed by generic manufacturers. Symbicort combines formoterol, a bronchodilator, with a corticosteroid known as budesonide to reduce inflammation in severe COPD cases.

Similar to Advair, Symbicort also consists of a medication and one of two inhalation devices — a pMDI (metered dose) device in the United States and a Turbuhaler in the rest of the world. Like Advair, the patents for the medication will expire earlier (2014-2018) than those for the devices.

That hasn’t stopped Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) from also trying its hand at producing a generic version, however. In January, Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) filed for EU approval of its generic version of Symbicort, which uses its own proprietary Spiromax device to dispense the medication.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!