Global Insight Perspective | |
Significance | The invalidation of the key patent protecting Razadyne in court and the FDA's recognition of a first-filer status for Mylan entitle the company to a share in the lucrative period of marketing exclusivity for the drug. |
Implications | While the drug whose patent has been invalidated is far from being a blockbuster—with sales of just over US$100 million—Mylan's access to marketing exclusivity would boost company revenue at a time Mylan needs to boost shareholder confidence. |
Outlook | Mylan's U-turn on the planned divestment of the Dey LP specialty pharmaceuticals unit has undermined shareholder confidence. However, positive developments in the company's core generics business—which boasts a number of other first-filer ANDA applications in addition to galantamine—would boost the chances of maintaining revenue growth while Dey is being restructured internally. |
Mylan Joins in the Galantamine Exclusivity "Bonanza"
Mylan recently disclosed that its Alphapharm Pty unit would be entitled to 180-day marketing exclusivity for galantamine after the patent of the originator drug was successfully invalidated. The patent in question—U.S. Patent No. 4,663,318, listed by J&J subsidiary Ortho McNeil Janssen—was invalidated by the U.S. District Court for the District of Delaware on 28 August. Rival generics manufacturer Barr Pharmaceuticals immediately announced that it claimed 180-day marketing exclusivity by virtue of submitting an Abbreviated New Drug Application (ANDA) with Paragraph IV certification on the first day (28 February 2005) that filing was allowed (i.e., immediately after the expiry of the originator's New Chemical Entity [NCE] exclusivity).
However, Mylan's Alphapharm subsidiary has since claimed that it is also entitled to 180-day exclusivity by virtue of being a first-filer as well. That claim has been supported by the FDA which granted the company's ANDA application.
Outlook and Implications
The Razadyne patent, which has been invalidated, would have expired in December 2008. Its early invalidation allows the first-filers to enjoy a 180-day period of marketing exclusivity during which time other generic copies of the same product would not be allowed on the U.S. market. With sales of US$102 million for the 12 months ending in June 2008, Razadyne is not a blockbuster drug. However, the prospect of marketing exclusivity for six months shared with one other generics company would certainly boost Mylan's revenues.
The company's core generics business would remain the key driver for growth for the foreseeable future. Therefore, success on the generics front is expected to sweeten shareholders who have reacted critically to the company's recently announced U-turn with regard to its specialty unit Dey. The unit, acquired as part of the Merck KGaA (Germany) generics acquisition, is specialised in nebulised respiratory products and severe allergy treatments. It had been slated for divestment for several months, after Mylan announced a delay in the launch of Dey's drug Perforomist (formoterol fumarate inhalation solution), a treatment for bronchoconstriction, emphysema, and chronic bronchitis. Mylan's announcement that it will keep the unit and move Dey's commercial operations from California to the East Coast has worried investors who are now concerned about a further delay in Performist's launch and a substantial spending on the launch itself (see United States: 9 September 2008: Mylan Bets on Specialty Pharma Business, Holds on To Dey).
Initial indications, however, are that the decision to retain Dey would not have an impact on Mylan's 2008–10 earnings. Developments, such as the first-filer marketing exclusivity for galantamine, are largely behind Mylan's certainty in this respect. In addition to this drug, Mylan has 93 ANDAs pending in the United States, 22 of those with potential first-to-file opportunities. Although first-to-file opportunities for traditional generics drive short-to-medium term growth for the company, Global Insight expects specialty drugs developed by the Dey subsidiary to gain more prominence in the long term. Retaining Dey is also expected to boost Mylan's capabilities to develop value-added generics in the future, featuring proprietary inhalation delivery technologies.