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The U.S. Food and Drug Administration has declined to approve a generic form of GlaxoSmithKline plc (ADR)(NYSE:GSK)‘s Advair asthma treatment from Mylan N.V.(NASDAQ:MYL). The agency claims that treatment is not anywhere near the required standards that necessitate an endorsement. Thus the company has to go back to the drawing board.

The generic drug maker is not taking the FDA’s conclusion kindly, citing that it was not required to comply with standards set out in draft guidance that was issued by the agency. However, the company did not divulge any further details regarding how long the delay for approval would take. The situation now hangs in the balance given that in its letter to Mylan earlier in the year the FDA designated the need for a major amendment to the drug’s application.

The rejected approval could be a sigh of relief for GSK

Having invested heavily in bringing a copy of Advair into the competitive market, Mylan says it was confident in winning approval. The company’s CEO Heather Bresch said that they had spent close to $700 million in the efforts of making the generic drug a success. Nonetheless, this was not to be and if had been approved. Apparently, had it gained the approval, it would have been the first complex inhaled combination generic to have ever been sanctioned by the FDA.

As all this unfolds, GSK would be smiling all the way to the bank given that it will now have more time to sell its flagship brand without competition. Andrew Witty, GSK’s CEO says, “Advair has been a very generous support during that period of the last two or three years in terms of helping us fund the growth of the replacement products.”

But Mylan’s woes are far from being over

Apparently, Mylan is not only fighting the rejection of what it thought would have been a top-shelf generic product to market. The drug maker is also having a case to answer, which regards the price of its EpiPen. The company is said to have increased its price while classifying it as a generic rather instead of a branded product.

In the meantime, Mylan’s stock closed at $39.15 witnessing an increase of $0.47 or 1.22% while that of GSK was trading at $43.42 an increase of $0.03 or 0.07%.

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