Novartis ties with Vectura on generic asthma drugs

By Ben Hirschler

LONDON, May 8 (Reuters) - Novartis (NOVN.VX) is working with British inhaled drug specialist Vectura Group (VEC.L) on generic versions of today's blockbuster asthma drugs, the head of the Swiss company's generics business has disclosed.

Sandoz CEO Andreas Rummelt told a Deutche Bank conference in New York this week that dry powder combination products -- like GlaxoSmithKline's (GSK.L) Advair and AstraZeneca's (AZN.L) Symbicort -- represented a major opportunity for generics.

"We are investing significantly as the asthma segment is growing," he said in a webcast.

"We have built a partnership on a dry powder device, which is the GyroHaler from Vectura. This partnership has been established for the U.S. as well as for Europe and we are currently investing more than $50 million in manufacturing, device assembly and device filling lines in eastern Germany."

Vectura announced two years ago that it had signed up an undisclosed partner for GyroHaler and its experimental drug VR315, widely believed by analysts to be generic Advair, but this is the first time that the partner has been revealed.

A second project from Vectura, VR632, is thought to be a generic version of Symbicort.

Copying inhaled drugs is notoriously difficult and delivering them effectively via an inhaler is a key part of the challenge.

But the prize is large. Advair is Glaxo's top-selling medicine, with global sales of 3.5 billion pounds ($6.84 billion) last year, while Symbicort revenues totalled $1.6 billion.

Both are inhaled drugs combining a corticosteroid and a long-acting beta-agonist.

Rummelt said generic asthma products were very promising, given the size of existing branded drug sales and looming patent expiries. The Swiss drugmaker's generics arm was also open to other partnerships in the respiratory area.

"The most interesting products in the asthma segment go off patent later in this decade, early in the next decade. These are dry powder products and dry powder combination products," Rummelt said.

"It is an attractive segment within this difficult to make product area."

Industry analysts said the revelation of the Sandoz partnership was positive for Vectura, since Sandoz was a big player in the generics business and it was making sizeable investments in manufacturing.

Piper Jaffray analyst Sam Fazeli, who rates Vectura a "buy", predicted there could be significant newsflow on the Sandoz/Vectura collaboration within the next 12-24 months.

A spokeswoman for Vectura declined to comment. (Editing by Elaine Hardcastle)