Wyeth Heartburn Drug Is Challenged
Wyeth faces an uphill struggle to protect patent exclusivity for its blockbuster drug Protonix after Teva Pharmaceutical Industries Ltd. launched a generic version of the heartburn pill in the U.S. market.
Wyeth said it would file a patent-infringement claim against the big Israeli generic-drug maker, seeking lost profits and other damages as a result of Teva's new product. Teva introduced the drug this past weekend, some 2½ years before the U.S. patent on the drug is set to expire in July 2010. Some analysts said the launch puts pressure on Wyeth to settle with Teva to allow marketing of a generic pill before the patent expires.
In a separate setback, Wyeth, of Madison, N.J., also announced that the Food and Drug Administration issued a second "approvable" letter for its osteoporosis drug bazedoxifene, meaning further delay before the medicine reaches the market.
In the Protonix dispute, both companies said they had agreed Sunday to try to negotiate a possible settlement. Teva agreed to refrain from shipping additional quantities of the drug during the standstill period, which expires Jan 22.
Still, Teva's move to launch a generic version of a drug still under patent reflects the increasingly aggressive approach that generic-drug companies have taken in recent years to challenge patents on some of the pharmaceutical industry's biggest drugs. Last year, the Apotex Group, of Canada, launched a copycat version of the anticlotting drug Plavix, co-marketed by Bristol-Myers Squibb Co. and Sanofi-Aventis SA, cutting deeply into its sales before a federal judge in June ruled in favor of the branded companies.
Such launches are a high-risk strategy that some generics companies nevertheless undertake if they believe they have a good chance of successfully challenging a patent in court.
Teva has already scored major victories in the Protonix case. The Israeli company won FDA approval last summer to market a generic version of Protonix, called pantoprazole. Wyeth in September failed to win a preliminary injunction from a federal judge against the launch of the drug, but the company has appealed that decision.
Should a court eventually side with Wyeth, Teva may have to pay triple any damages awarded to the patent holder. But Teva told analysts Monday that it believes it has the upper hand in the legal battle and thinks the risk for such damages is low. The company gave few other details on the analysts' call and declined to comment further.
Protonix is among Wyeth's top sellers, with sales of $1.45 billion during the first nine months of this year. In a call with analysts Monday, Bernard Poussot, who becomes Wyeth's chief executive on Jan. 1, said the company will review operations for potential cost cuts as a precaution against lost revenue from Protonix.
"The fact that Teva put product in the channel places greater pressure on Wyeth to settle," said Randall Stanicky, a generic-drug-industry analyst with Goldman Sachs Group Inc. who doesn't own Teva shares.
Catherine Arnold, pharmaceutical-industry analyst at Credit Suisse Group, also believes Teva's move weakens Wyeth's position. "It's hard to get the toothpaste back in the tube," Ms. Arnold said. She believes Wyeth will have to "give more concessions than you usually see in these types of settlements" or face generic competition at least until a judge rules in the case, which may not happen until 2009. Ms. Arnold has an "outperform" rating on Wyeth stock but doesn't own any the company's shares.
Another option for Wyeth is to launch its own generic version of Protonix. If it did so during the next 30 days, Wyeth said, the standstill agreement would be lifted.
Mr. Poussot told analysts that the companies had agreed last week to resume settlement talks early next year and that Teva had "led us to believe that it wouldn't launch before negotiations resumed."
Wyeth officials believe Teva began selling the drug in the U.S. market last Friday. Some analysts worried that several months' supply of generic pills could already be in the supply channel even with the standstill pact implemented Sunday.
Wyeth shares fell $1.41, or 3%, to $45.45 in abbreviated 1 p.m. New York Stock Exchange trading Monday. Teva's American depositary receipts rose $1.31, or 2.9% to $46.48 in Monday trading on the Nasdaq Stock Market.
The further delay in Wyeth's osteoporosis drug is another dent in the company's pipeline. The FDA wants further analysis concerning incidence of stroke and blood clots, and said it had issues concerning data collection and reporting, Wyeth said.
Earlier this year, the FDA rejected a schizophrenia drug from Wyeth and delayed a decision on a pill to treat menopause symptoms.
Wyeth said it would file a patent-infringement claim against the big Israeli generic-drug maker, seeking lost profits and other damages as a result of Teva's new product. Teva introduced the drug this past weekend, some 2½ years before the U.S. patent on the drug is set to expire in July 2010. Some analysts said the launch puts pressure on Wyeth to settle with Teva to allow marketing of a generic pill before the patent expires.
In a separate setback, Wyeth, of Madison, N.J., also announced that the Food and Drug Administration issued a second "approvable" letter for its osteoporosis drug bazedoxifene, meaning further delay before the medicine reaches the market.
In the Protonix dispute, both companies said they had agreed Sunday to try to negotiate a possible settlement. Teva agreed to refrain from shipping additional quantities of the drug during the standstill period, which expires Jan 22.
Still, Teva's move to launch a generic version of a drug still under patent reflects the increasingly aggressive approach that generic-drug companies have taken in recent years to challenge patents on some of the pharmaceutical industry's biggest drugs. Last year, the Apotex Group, of Canada, launched a copycat version of the anticlotting drug Plavix, co-marketed by Bristol-Myers Squibb Co. and Sanofi-Aventis SA, cutting deeply into its sales before a federal judge in June ruled in favor of the branded companies.
Such launches are a high-risk strategy that some generics companies nevertheless undertake if they believe they have a good chance of successfully challenging a patent in court.
Teva has already scored major victories in the Protonix case. The Israeli company won FDA approval last summer to market a generic version of Protonix, called pantoprazole. Wyeth in September failed to win a preliminary injunction from a federal judge against the launch of the drug, but the company has appealed that decision.
Should a court eventually side with Wyeth, Teva may have to pay triple any damages awarded to the patent holder. But Teva told analysts Monday that it believes it has the upper hand in the legal battle and thinks the risk for such damages is low. The company gave few other details on the analysts' call and declined to comment further.
Protonix is among Wyeth's top sellers, with sales of $1.45 billion during the first nine months of this year. In a call with analysts Monday, Bernard Poussot, who becomes Wyeth's chief executive on Jan. 1, said the company will review operations for potential cost cuts as a precaution against lost revenue from Protonix.
"The fact that Teva put product in the channel places greater pressure on Wyeth to settle," said Randall Stanicky, a generic-drug-industry analyst with Goldman Sachs Group Inc. who doesn't own Teva shares.
Catherine Arnold, pharmaceutical-industry analyst at Credit Suisse Group, also believes Teva's move weakens Wyeth's position. "It's hard to get the toothpaste back in the tube," Ms. Arnold said. She believes Wyeth will have to "give more concessions than you usually see in these types of settlements" or face generic competition at least until a judge rules in the case, which may not happen until 2009. Ms. Arnold has an "outperform" rating on Wyeth stock but doesn't own any the company's shares.
Another option for Wyeth is to launch its own generic version of Protonix. If it did so during the next 30 days, Wyeth said, the standstill agreement would be lifted.
Mr. Poussot told analysts that the companies had agreed last week to resume settlement talks early next year and that Teva had "led us to believe that it wouldn't launch before negotiations resumed."
Wyeth officials believe Teva began selling the drug in the U.S. market last Friday. Some analysts worried that several months' supply of generic pills could already be in the supply channel even with the standstill pact implemented Sunday.
Wyeth shares fell $1.41, or 3%, to $45.45 in abbreviated 1 p.m. New York Stock Exchange trading Monday. Teva's American depositary receipts rose $1.31, or 2.9% to $46.48 in Monday trading on the Nasdaq Stock Market.
The further delay in Wyeth's osteoporosis drug is another dent in the company's pipeline. The FDA wants further analysis concerning incidence of stroke and blood clots, and said it had issues concerning data collection and reporting, Wyeth said.
Earlier this year, the FDA rejected a schizophrenia drug from Wyeth and delayed a decision on a pill to treat menopause symptoms.
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