Shares in Hikma Pharmaceuticals PLC (LON:HIK) and Vectura Group PLC (LON:VEC) jumped on Thursday after the two drugmakers unveiled plans to develop a generic version of GlaxoSmithKline PLC’s (LON:GSK) blockbuster Ellipta inhaler.
Ellipta is a treatment for chronic obstructive pulmonary disease (COPD), netting more than US$600mln for GSK last quarter. By 2024, global annual sales are expected to surpass US$5.5bn.
Vectura will develop a drug which can be used in its Open-Inhale-Close inhaler device, while Hikma will be responsible for taking it through the clinic, gaining regulatory approval and commercialising the finished product.
Under the terms of the deal, Hikma will pay Vectura US$15mln upfront, plus up to a further US$80mln in milestone payments. Should the inhaler secure approval, Hikma will give Vectura a share of the profits.
There are several types of Ellipta, the pair will initially start off by developing a copycat version of Breo Ellipta, although the agreement means at least two more will also be developed and commercialised further down the line.
Advair blow earlier this year
GSK has come under threat from Hikma and Vectura before, with the two developing a cut-price version of its Advair asthma drug, although the launch for that was pushed back to 2020 earlier this year.
“The generic respiratory market is a key area of pipeline focus for Hikma,” said Hikma chief executive Siggi Olafsson.
“By strengthening and expanding our partnership with Vectura, we will develop a pipeline of complex respiratory products that will enable us to deliver sustainable long-term growth.”
Vectura boss James Ward-Lilley added: “This is a highly significant and valuable agreement for Vectura, reflecting our increased focus in our complex inhaled generic portfolio. The agreement validates Vectura's rare, industry-leading development capabilities.”
Hikma shares advanced 6.6% to 2,044p on Thursday morning, while Vectura jumped 11.9% to 79.9p.