AstraZeneca Plc has won US approval for its asthma drug Symbicort, significantly earlier than expected, but the company said on Saturday it would not launch it in the United States until mid-2007.
The early approval of the drug as a treatment for asthma in patients aged 12 years and older is a potential blow for rival GlaxoSmithKline Plc, which makes the competing asthma treatment Advair. But the decision to delay the launch means the news is not as negative for Glaxo as it could have been, according to UBS pharmaceuticals analyst David Beadle.
AstraZeneca spokesman Chris Major said the group had decided not to launch immediately because it wanted to demonstrate Symbicort had a shelf life of at least 18 months. At the moment, it only has enough data to prove 12 months.
Symbicort has been sold in Europe for more than five years but getting to market in the United States has been a protracted process and most analysts had not expected it to win a US clearance until 2007.
AstraZeneca itself had previously warned it might not win a green light first time round, since the FDA is traditionally cautious about clearing inhaled respiratory drugs.
Advair and Symbicort both combine two drugs in one treatment - a long-acting beta against and a corticosteroid. Up to now, Glaxo has had this market to itself but in future it faces potentially serious encroachment from Symbicort.
"The product will compete directly against GlaxoSmithKline's largest product, Advair, with annual sales in the US of over $3 billion," said Tim Anderson, an analyst at Prudential Equity Group. "GSK will likely be surprised by this approval."
Advair is Glaxo's top-selling product, with 2005 world-wide sales of just over 3 billion pounds ($5.54 billion), of which 1.7 billion pounds came from the all-important US market. Symbicort, which has so far lacked access to the world's biggest market, had sales last year of just over $1 billion.
Industry analysts Dresdner Kleinwort said earlier this week that an early US approval of Symbicort could give AstraZeneca shares a significant boost.
Investors had been anticipating news on the product because the FDA had a deadline of July 23 to respond to AstraZeneca's marketing application. Most had expected it to request more information before allowing Symbicort to go on sale.
Symbicort will be sold in the United States in a pressurised metered dose inhaler, the most commonly used delivery device in the US market. The United States is the first country where Symbicort will be available in this type of device.
The FDA has approved two dose strengths for the medicine. AstraZeneca's new chief executive, David Brennan, who took control of the Anglo-Swedish group at the beginning of the year, said he was "very pleased" by the US approval.
Brennan has staked his reputation on using existing products - including Symbicort - to drive sales and profits in the near to medium term, while the group rebuilds a drug pipeline depleted by past failures.
He said last month that established drugs, which also include cholesterol fighter Crestor, Nexium for stomach ulcers and schizophrenia medicine Seroquel, would allow AstraZeneca to increase sales in line with projected market growth during the next five years, despite generic competition to some products.
AstraZeneca will unveil its second-quarter results next Thursday, when it is expected to report a 25 percent rise in earnings per share to 94 US cents, according to the average forecast of 20 analysts polled by Reuters.