Hikma Pharmaceuticals and Vectura announced Thursday an agreement to develop and market generic versions of GlaxoSmithKline's Ellipta portfolio. The companies will initially develop a generic version of the asthma and chronic obstructive pulmonary disease therapy Breo Ellipta (fluticasone/vilanterol) using Vectura's Open-Inhale-Close dry powder inhaler device.

Siggi Olafsson, Hikma's CEO, remarked "this agreement leverages the investment we have made and the experience we have gained through our generic Advair Diskus programme." Hikma and Vectura are also developing a generic version of GlaxoSmithKline's Advair Diskus (fluticasone/salmeterol), dubbed VR315, although they have faced setbacks in the US, with the FDA earlier this year confirming the need for an additional clinical endpoint study.

The companies noted that following discussions with the FDA, they believe that the Open-Inhale-Close dry powder inhaler device has the potential to be an AB-rated substitutable drug-device combination for generic versions of the Ellipta portfolio. "The generic respiratory market is a key area of pipeline focus for Hikma," Olafsson said, with the drugmakers noting that net sales for Ellipta products in the US are projected to be $4 billion by 2024 and around $5.5 billion globally.

Under the latest deal, which covers the development of at least three products in the Ellipta portfolio, Hikma will make an upfront payment of $15 million to Vectura. The companies noted that Vectura will be responsible for initial device and formulation development, while Hikma will be responsible for clinical development, regulatory submission and commercialisation. Hikma will make a $5 million milestone payment to Vectura upon transfer of the first product to its manufacturing facility to enable clinical manufacturing.

As part of the agreement, Vectura also stands to receive milestones of up to $75 million, as well as a mid-teen percentage share of net profit for each portfolio product. The drugmakers added that if global sales of combined products reach $1 billion, $3 billion and $5 billion, Vectura is eligible to receive milestone payments of $25 million, $35 million and $40 million, respectively.

Commenting on the transaction, Shore Capital analyst Adam Barker said "the deal is clearly some form of validation for Vectura's technology, given they worked with Hikma on development of a generic Advair and it's also encouraging to see the [FDA] has given them an early indication that the device in question could be an AB substitutable [bioequivalent] generic."

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