The U.S. Food and Drug Administration has declined to approve a generic form of GlaxoSmithKline plc (NYSE:GSK) Advair asthma treatment from Mylan N.V. (NASDAQ:MYL). The agency’s decision has not been taken kindly by the generic drug maker, which says it disagrees with the reasoning by the agency over the standards it must meet.
Apparently, some analysts had foreseen a low likelihood of a swift approval of the generic. Their argument was that it is one of the first and most complicated inhaled combination generic products to have been evaluated by the US agency.
What next for Mylan?
The refusal by the FDA is an advantage for GSK because it will not face any competition in the meantime for its branded Advair. However, according to Mylan’s President Rajiv Malik, the company was not required to abide by the rules set out in draft guidance the agency had issued.
The length of the delay of approval may not be certain but the drug maker says it will be re-evaluating the agency’s decision and perhaps provide an update on its application. Nonetheless, the company officials also expect to meet with the FDA to talk about their disagreement.
But Advair seems to have tight competition
The recent unfolding will push Mylan to halt its expectations of launching its generic version of Advair given that the FDA has designated it as requiring a “major” amendment. Nonetheless, the asthma treatment seems to be such a big market blockbuster with competition from Hikma Pharmaceuticals, which is also waiting for an approval of its generic version of Advair.
Since 2001, it has been generating more than $1 billion in sales each year. Thus the delay in its approval is expected to have a huge impact.
On the other hand, Mylan’s problems are far from being over after being blasted for sharply increasing the price of its EpiPen. The company says it has been facing stiff competition, which resulted in declined first-quarter sales of EpiPen in North America.
In the meantime, Mylan’s stock closed $38.21 witnessing an increase of $0.20 or 0.53%.
