Generic risk to GSK's Advair prompts buy recommendation from analysts

Pharmaceutical analysts are urging investors to buy shares of UK pharma major GlaxoSmithKline (LSE: GSK) after its share price dropped following a poor spell for the company.

Panmure Gordon analyst Savvas Neophytou said: “Following the investigation on selling practices in China and the failed trial on cancer candidate MAGE-A3 last week, the group's risk profile is increased with news overnight that the US Food and Drug Administration had published draft guidance for the development of substitutable generic copies of combination inhaled drugs. This may result in increased competition to GSK's biggest selling product Advair.”

The US Food and Drug Administration issued draft guidance for the development of substitutable generic copies of combination inhaled drugs, such as GSK’s Advair (fluticasone and salmeterol) and Anglo-Swedish drug major AstraZeneca’s (LSE: AZN) Symbicort (budesonide/formoterol). These new guidelines essentially require relatively simple preclinical data backed up by a very short clinical trial, Panmure said. In order to demonstrate bioequivalence, generics are likely to only require testing at the lowest approved dose.