Teva Has Grand Ambitions In Respiratory Disease, With An Eye On Advair

Teva expects to more than double its respiratory sales to $2.4 billion by 2015, and launch multiple products in the timeframe, including an Advair-like product.

Teva Pharmaceuticals Limited Ltd. is making a deep investment in respiratory R&D, with results expected to pay off by 2015. The company has ambitions to double respiratory sales from around $1 billion anticipated in 2010 to $2.4 billion by 2015, spurred by continued growth of its two key brands and several new launches, the company reported during an investor meeting on its respiratory strategy Nov. 4.

Teva expects to submit nine products to regulatory authorities in the U.S. and Europe within the timeframe, including a similar version of GlaxoSmithKline's market-leading asthma/chronic obstructive pulmonary disease drug Advair (salmeterol/fluticasone), a long-acting beta antagonist/corticosteroid combination. Beyond 2015, those new drugs are expected to generate $5 billion in sales, CEO Shlomo Yanai told investors.

The emphasis on respiratory disease is part of Teva's effort to diversify its business beyond small molecule generic drugs to more specialized areas, which also includes biosimilars and brand offerings, the company said. Respiratory disease is a fast-growing business, with opportunities for both new brands and generics, and high barriers to market entry due to the regulatory requirements and complex devices used with the drugs. Major pharmaceutical manufacturers, including generics companies like Teva, view the space as attractive because competition is limited (Also see "Respiratory Generics: Big Potential But A Tough Market To Crack" - Pink Sheet, 24 May, 2010.).

Teva already has a significant presence in respiratory disease, with two products, a short-acting beta2-andrenergic agonist ProAir (albuterol sulfate) and the corticosteroid Qvar (beclomethasone) for asthma. Both are positioned as brands, but were approved in the U.S. through the 505(b)(2) regulatory pathway, which allows drug applicants to reference the safety and efficacy data of previously approved drugs, but still requires some clinical studies.

Teva's respiratory business - which mainly was acquired through the 2006 acquisition of Ivax Corp. -ranks fifth in sales globally in the industry, behind GlaxoSmithKline Plc., Merck & Co., Boehringer Ingelheim GMBH and AstraZeneca Plc., the firm said, citing IMS Health data.

Teva is focusing on both the lifecycle management improvements to ProAir and Qvar, as well as the launch of new drugs. The company is targeting five market subsets: inhaled corticosteroids, short-acting bronchodilators, combination products, anticholinergics and nasal steroids. Importantly, it is developing a dry powder inhaler device called Spiromax, which will span several products.

Two near-term opportunities for Spiromax are the launch of ProAir Spiromax, utilizing the new device, and Qnaze, a dry aerosolized formula of Qvar for allergic rhinitis.

The Big Opportunity: Advair

The Spiromax program is key because many of the respiratory products are inhaled. It is an alternative to Teva's Easi-Breathe metered dose inhaler, and has potential to be used in combination products that mimic best-selling innovative drugs Advair and Symbicort (budesonide/formoterol). In the U.S., Teva said it plans to file an Advair-like combination, a LABA/corticosteroid combo made up of salmeterol and fluticasone, as well as fluticasone alone, in 2014.

"Our vision in terms of simplification and our long-term platform strategy will be to introduce a very simple, easy-to-use, open-inhale-close...system targeting three very large and sizable markets," said Mark Salyer, exec VP and general manager, Teva Respiratory.

Successfully launching an Advair competitor, however, would be a major coup for Teva - or any generic drug maker. Advair is GSK's top-selling drug, with sales of around $7 billion in 2009, of which about half were generated in the U.S. The primary patent for the drug component of Advair expired in the U.S. in September 2010 but the device patents for the popular Diskus dry powder inhaler extend further to 2016.

Although the active drug patents already expired, an outright generic version of Advair isn't likely to enter the U.S. market soon because FDA is grappling with bioequivalence standards for inhaled respiratory drugs and the abbreviated new drug application process isn't open to them. The device also is an issue since brand manufacturers have petitioned FDA claiming the user guides to any generic drugs should exactly copy the brand, which would require the same device.

"The market will remain branded for the foreseeable future," predicted Tushar Shah, senior VP-global respiratory. "The timeframe to get that regulation changed and passed would be so lengthy and challenging that we see the bigger opportunity for us to play the branded space."

In Europe, where the European Medicines Agency released new guidelines on inhaled respiratory drugs in 2009, including requirements for demonstrating bioequivalence between two products, the situation is different. Thus, Teva said it will take a different regulatory tact in Europe, and expects to receive regulatory clearance for generic products with limited pharmacokinetic and lung deposition studies. Teva expects to submit four products in Europe by the end of 2012: a budesonide/formeterol combination using the Spiromax device (2011), a fluticasone metered-dose inhaler (2011), a fluticasone/salmeterol combination using Spiromax (2012) and a fluticasone/salmeterol metered-dose inhaler (2012).

Teva might find itself with some competition, however. Novartis AG's generic drug unit Sandoz is aggressively expanding its respiratory business and actively developing its own dry-powder dose inhaler - undoubtedly with the same goals in mind.

-Jessica Merrill ([email protected])