LONDON (Reuters) - The threat of generic copies of GlaxoSmithKline's (GSK.L) best-selling lung drug Advair finally making it to market in the United States hit confidence in the drug maker on Tuesday, sending the stock down more than 3 percent.
Fears of cheaper versions of the $8 billion-a-year seller being launched in the world's biggest market were fuelled by a draft guidance document from the Food and Drug Administration setting out the requirements for generic versions of the inhaled drug.
Bernstein analyst Tim Anderson said the requirements looked "fairly benign" for generic firms seeking to make copies that could be automatically substituted for Advair when patients have their prescriptions filled.
Citigroup said its worst-case scenario for an accelerated U.S. Advair sales decline, following the FDA document, could slice up to 5 percent off GSK's valuation.
Advair, which is marketed as Seretide outside the United States, is used to treat both asthma and chronic lung disease caused by smoking.
Although patents on the active ingredients used in the medicine have expired, it remains protected by U.S. patents on the Diskus inhaler device that run until 2016, after which copies may reach the market.
Up until now, many investors had assumed that fully substitutable generic versions of Advair were unlikely in the United States and instead generics would have to compete as separate brands. The FDA pathway to permitting "true" generics therefore represents a heightened threat.
Shares in GSK were down 3.3 percent at 15.85 pounds by 0805 GMT (3:05 EDT).
The uncertainty over Advair comes on the same day that a U.S. advisory panel is due to consider a new lung drug called Anoro from GSK and Theravance THRX.O.
Reporting by Ben Hirschler; Editing by Louise Heavens