Mylan NV said on Wednesday the U.S. Food and Drug Administration declined to approve its generic version of GlaxoSmithKline Plc's (GSK.L) blockbuster Advair asthma treatment, but provided no details of the agency's concerns or how long the product might be delayed.
Mylan's shares fell 2.9 percent to $40.50, while GSK's U.S.-traded shares rose 0.7 percent.
Mylan said it received a so-called complete response letter (CRL) from the FDA, which had been expected to decide by Tuesday whether to approve the first generic copy of Advair, a two-part inhaled drug used to treat asthma and chronic lung disease.
The FDA leaves it to companies to disclose the contents of any CRL it issues. They can contain demands for additional clinical trials that can take years, or involve minor delays as the agency reviews additional data or complete inspections of manufacturing plants.
The drugmaker issued a statement saying it was reviewing the FDA's response and would provide an update on its application "as soon as practicable."
What is clear is that GSK has gained additional time to sell Advair without facing competition from a cheap generic, a welcome reprieve for its incoming Chief Executive Emma Walmsley who takes over later this week.
Mylan's Chief Financial Officer Ken Parks this month said the company was anticipating a midyear launch of the product, but that now appears to be highly unlikely.
"The receipt of a formal CRL will now introduce questions around the company's ability to get to market this year and what that means to 2017 guidance," RBC Capital Markets analyst Randall Stanicky said in a note.
Since Advair is one of the first complex inhaled combination generic products to be reviewed by the U.S. agency, some analysts had estimated a low likelihood of a swift approval.
Another generic version of Advair from Hikma Pharmaceuticals is awaiting an FDA decision by May 10.
Dealing with the threat of competition to Advair, which has generated more than $1 billion in sales each year since 2001, is the first big challenge facing Walmsley.
If generic copies do hit the market by mid-2017, GSK expects Advair's U.S. sales to fall to about 1 billion pounds ($1.24 billion) this year, from 1.83 billion pounds in 2016.
(Reporting by Natalie Grover in Bengaluru and Bill Berkrot in New York; Editing by Sai Sachin Ravikumar and Richard Chang)