LONDON: Drugmaker AstraZeneca Plc. lost a key patent case in the United States over its top-selling heart drug Toprol XL, which paves way for generic competitors to take over its manufacture on a large scale.
The Anglo-Swedish company said it will appeal against the judgement by the U.S. District Court for the Eastern District of Missouri. The court had favoured suits by KV Pharmaceutical Co., Andrx Corp. and Eon Labs Inc., a unit of Novartis AG, challenging the patent.
Industry watchers feel the court decision invalidating the patents on Toprol XL could bring in generic manufacturers into the scene even in this quarter provided the Food and Drug Administration approves their formulations of the drug.
AstraZeneca had contended before the court that its patent on Toprol XL should continue through September 2007, when the U.S. patents expire. However, the court found the patents invalid and unenforceable.
This is a major setback for Europe's third largest drug maker as it could affect its earnings considerably. Analysts estimate the decline in profits to as much as 10 per cent. Toprol XL accounts for nearly $1.29 billion in sales in 2005, around 5 per cent of the company's total sales.
AstraZeneca had forecast strong earnings growth for the next two years, but the ruling will change this perception and increase pressure on the company to line up new drugs to keep up the growth pace. It is likely to face a similar situation in relation to its cancer drug Casodex sometime in 2008.
Generic manufacturers had recently challenged two other top selling drugs of the company -- antiulcerant Nexium and schizophrenia drug Seroquel. However, it will take a long time for these to come up in hearing.
This is the first victory for generic manufacturers in recent years. Their challenges against Pfizer Inc.'s Lipitor and Eli Lily and Co.'s Zyprexa were dismissed by the courts in 2005.
AstraZeneca, affected by two late-stage product failures in 2004, seems to have contingency plans in place. It has signed deals worth $1.6 billion in December alone to license in new drugs, and is buying up KuDOS, a cancer research firm.
AstraZeneca's shares fell 4 per cent Wednesday in reaction to the news, trading at 26.87 pounds.
Posted
on : Thu, 19 Jan 2006 14:35 GMT | Business News
By : Paula Jenkins
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