GlaxoSmithKline turns to COPD inhalers as Advair sales dry up
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GlaxoSmithKline turns to COPD inhalers as Advair sales dry up

Pharmaceutical giant GlaxoSmithKline (GSK) is hoping to compensate for drying up Advair sales by doubling down on production of APIs (Active Pharmaceutical Ingredients) for COPD inhalers. Advair, a blockbuster asthma drug, will start facing generic competition any day now, as the company’s patent expires. But GSK is being clear about how it hopes to make up for the shortfall in revenues this will entail: by ramping up its focus on another breathing disorder: COPD (Chronic Obstructive Pulmonary Disease).

GlaxoSmithKline’s share price has appreciated by 11% so far in 2018

graph 2910 gsk

Source: Yahoo Finance

A week ago, GSK opened a new £54 million production building in Montrose, Scotland, to make APIs for Ellipta, one of its COPD-fighting drugs. CEO Emma Walmsley used this opening to highlight the company’s growing presence in Scotland, saying: “It also highlights the important part Montrose will play in our future growth, based around our latest medicines for respiratory, HIV and vaccines.

Another site that the company is working on in Montrose will cost £110 million, and contribute to GSK’s production of Salbutamol, the API in Ventolin inhalers.

As Advair’s sales look likely to drop by as much as 30% this year (GSK has said that it expects sales to fall from $2.2 billion last year to $1.57 billion), the company is restructuring to compensate, and making big cuts to its respiratory drug organisation. Respiratory drugs, nonetheless, will remain a key offering for the company. Walmsley said cutting asthma reflects “our strategy to focus on COPD, where we feel we have the biggest opportunity for growth.”

Disclosure
Dominion holds GlaxoSmithKline in its Global Trends Managed Fund.


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