GlaxoSmithKline expands API production for COPD inhalers as Advair sales wither

Even with looming generic competition expected to take a big bite out of sales of its blockbuster Advair, respiratory drugs remain key to GlaxoSmithKline, and it continues to plow money into their production. The latest project is an expansion to make APIs for one of its COPD drugs that it is leaning on as Advair revenue shrinks.

The drugmaker officially opened a new £54 million ($70.3 million) production building on Monday at a site in Montrose, Scotland, to make APIs for Ellipta, a drug to treat chronic obstructive pulmonary disease.

GSK CEO Emma Walmsley noted that the company has a substantial manufacturing presence in Scotland. "It also highlights the important part Montrose will play in our future growth, based around our latest medicines for respiratory, HIV and vaccines," Walmsley said in an announcement.

Glaxo is also working on a £110 million ($137 million), four-story facility at a site in Montrose where it produces salbutamol, the API in Ventolin, another of its respiratory drugs. Because of the automation improvements in both projects, the expansions come without the need to add workers.

While respiratory drugs remain a revenue driver for GSK, it is making big cuts in its respiratory drug organization as it preps for a big hit to Advair sales, for years one of its top sellers. Last month, it announced it would whack about 650 jobs in the U.S., including 450 in sales, as it reduces its focus on asthma, "reflecting our strategy to focus on COPD, where we feel we have the biggest opportunity for growth," a spokesperson said.  

Glaxo has been bracing for competition to its blockbuster respiratory drug for several years, but so far generics have failed to score FDA approval. That could change soon, though; Mylan has said it can win a nod by mid-October. GSK said in April that it expects Advair's U.S. sales to drop 30% this year even without generics, to about $1.57 billion from $2.2 billion last year.

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