GSK share price steady after delay to generic Advair

FDA insists Hikma conduct further clinical trial

GSK share price steady after delay to generic Advair

Shares in GlaxoSmithKline (LON:GSK) have advanced in London in today’s session as Hikma Pharmaceuticals (LON:HIK) unveiled that US regulators had requested another trial to the group’s generic version of GSK’s flagship respiratory drug Advair. The news marks a boost for the FTSE 100 drugmaker who has signalled that its near-term earnings outlook is contingent on the arrival of generic Advair in the US.

As of 09:36 GMT, GSK’s share price had added 0.58 percent to 1,343.80p, outperforming the benchmark FTSE 100 index which currently stands 0.08 percent higher at 7,229.94 points. Hikma’s share price meanwhile has fallen deep into the red and is currently 1.83 percent worse off at 882.00p.

Hikma’s generic Advair delayed

Hikma announced in a statement this morning that the US Food and Drug Administration (FDA) had requested the completion of an additional clinical endpoint study for the pharmco’s generic version of GSK’s Advair Diskus treatment. Hikma anticipates being able to submit a response to the FDA with new clinical data as early as possible in 2019.

The setback marks good news for GSK, which said in its full-year results last month that it expects its earnings to be flat to down three percent this year, if generic copies of its Advair inhaler hit the US market by mid-year. Without generics, earnings are expected to grow between four and seven percent. Reuters, however, noted in its coverage of the news that generics company Mylan still had a chance to win a US green light for its copycat Advair in the current year.

Analysts on blue-chip pharmco

Liberum Capital reiterated its ‘buy’ rating on GSK last week, valuing the shares at 1,630p, while Goldman Sachs, which also sees the pharmco as a ‘buy,’ set a price target on the shares of 1,750p earlier this month. According to MarketBeat, the FTSE 100 drugmaker currently has a consensus ‘hold’ rating and an average price target of 1,518.25p.

As of 09:53 GMT, Monday, 12 March, GlaxoSmithKline plc share price is 1,344.31p.

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