By Ransdell Pierson and Lewis Krauskopf
NEW YORK (Reuters) - Generic forms of Pfizer Inc.'s blockbuster Norvasc blood pressure drug will likely be launched in the United States by next week -- six months earlier than expected -- after a U.S. appeals court decided Pfizer's patent on the drug is invalid, analysts said.
The Court of Appeals for the Federal Circuit on Thursday
reversed a lower court patent decision that had favored Pfizer
The ruling reversed a decision made by the U.S. District Court for the Northern District of Illinois.
The appeals court said the lower court "erred" when it disagreed with Apotex and when it found the discovery process for the patent was a unique process undertaken by Pfizer.
Morgan Stanley analyst Jami Rubin said the biggest
immediate beneficiary of the ruling will be Mylan Laboratories
Inc.
"We understand that the decision applies to Mylan, therefore we would expect Mylan to launch a generic (Norvasc) tablet on March 25th," Rubin said in a research report.
Apotex late on Thursday said the court decision "is allowing Apotex to obtain final approval" for its copycat. It said Pfizer's limiting patent lapses in two days and that no company, therefore, will have exclusivity on generic Norvasc.
"Apotex expects to launch the product in the very near
future," said the privately held Canadian company, which last
year introduced a generic form of Bristol-Myers Squibb Co.'s
Pfizer closed down 6 cents at $25.79, while shares of Mylan jumped 5.2 percent, or $1.01, to $20.55, also on the New York Stock Exchange.
SECOND-BIGGEST PFIZER PRODUCT
Norvasc is Pfizer's second-biggest product, with global sales last year of $4.87 billion. Wall Street has been expecting it to face generic competition in September in the United States, where the drug's sales were $2.5 billion in 2006.
"Pfizer is reviewing the decision and is considering all its options, including seeking reconsideration" of the court decision, the world's biggest drugmaker said in a statement. Officials of Mylan could not immediately be reached for comment.
Prudential analyst Tim Anderson said he expects generic Norvasc to be introduced "as soon as next week," and predicted its early arrival will cost Pfizer about $1 billion in sales this year.
"We did not anticipate this ruling, but it will probably only have a muted impact on Pfizer, which is already a washed-out, low valuation name," Anderson said in his research note.
Pfizer, whose revenue growth has stalled due to generic competition for other big drugs and its inability to develop new blockbuster products, is relying on big job cuts to deliver earnings growth in 2007 and 2008 in the high single-digit percentage range.
But Anderson said an early launch of Norvasc generics would hurt Pfizer's earnings by 10 cents per share this year. That would strip away about half the company's hoped-for profit growth. Analysts, on average, expect Pfizer to earn $2.21 per share in 2007, according to Reuters Estimates.
Mylan in October 2005 won final U.S. approval for three dosage strengths of generic Norvasc, but held off launching the copycats as it continued to wage its own patent battle with Pfizer.
Pfizer last month won the federal patent case in Pennsylvania against Mylan, in a decision that blocked Mylan from launching its generics until September.
Judge Terrence McVerry, of the Western District of Pennsylvania, had upheld Pfizer's patent covering the active ingredient in Norvasc. He found the patent is valid, enforceable and would be infringed by Mylan's product, Pfizer said then.
Mylan, which appealed the ruling, could have faced heavy damages if it started selling its product and then lost the patent trial.
© Reuters Limited. All Rights Reserved.
Reproduction or redistribution of Reuters content, including framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
