Pfizer licenses Seretide generic and other respiratory drugs to Mylan

Mylan has licensed a portfolio of respiratory products from Pfizer in a deal that includes a generic version of GlaxoSmithKline's big-selling combination product Seretide.

The wide-ranging deal gives Mylan rights to Pfizer's dry powder inhaler (DPI) technology platform, as well as an option to negotiate for existing compounds at various stages of development in the big pharma company's pipeline.

It will also see Mylan pick up the contracts for a number of Pfizer employees based at its Discovery Park facility in Sandwich, UK, where the generic drugmaker intends to set up its own respiratory product development team. Other former Pfizer staff will be located in Cambridge, UK.

The financial terms of the deal include an upfront payment of $17.5m to Pfizer, with Mylan picking up the tab for any remaining development and commercialisation costs for the transferred products.

Additional payments will be due after the deal closes, depending on the regulatory and commercial success of the portfolio.

The generic version of GlaxoSmithKline's (GSK) Seretide (fluticasone plus salmeterol) product, marked as Advair in the US, lies at the heart of the deal, giving Mylan an opportunity to break into the large market for fixed dose combination products indicated for asthma and chronic obstructive pulmonary disease (COPD).

GSK's brand brought in £3.7bn ($5.9bn) in the first nine month of the year, and it remains the pharma company's largest product by sales value.

Although patent expiries are looming in some markets, the product is likely to be resistant to generic challenges because of the technical challenges involved with developing inhaled medicines, and particularly those delivering more than one active ingredient.

But Mylan's deal with Pfizer seems to position the company well to not only take on Seretide, but also build a strong position in a segment of the generics market that will be less prone to competition and so command higher margins.

Once the deal closes Mylan will have exclusive commercialisation rights for generic Seretide in the US, Canada, Australia and New Zealand, as well as in the EU and European Free Trade Association countries.  In the rest of the world, Mylan and Pfizer will have co-promotion rights to the product.