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Allergan's Restasis loses appeals court battle, gives way to generics

A U.S. appeals court ruled Nov. 13 that the patents for Allergan PLC's dry eye treatment Restasis are invalid, paving the way for competing generic drugs.

With the decision from the U.S. Court of Appeals for the Federal Circuit in Washington, only the U.S. Food and Drug Administration stands in the way of generics makers Teva Pharmaceutical Industries Ltd., Mylan NV and Akorn Inc. to market their versions of the drug. None have been approved as yet by the regulator.

Restasis, a blockbuster drug for Allergan, made almost $1.5 billion in 2017 and was the Ireland-based company's second-best-selling product that year behind its wrinkle reducer Botox and accounted for almost 10% of its overall revenue.

If determined valid, the remaining Restasis patents would have blocked generics until 2024.

In Allergan's most recent quarterly earnings report, the anticipation of cheaper copies of the drug already started to affect its sales. The eye drug's third-quarter sales were $312 million, a decline from $382 million a year earlier.

The case moved forward after the U.S. Court of Appeals ruled in July that Allergan could not use tribal immunity to protect its remaining patents. The drugmaker struck a deal with the St. Regis Mohawk Tribe, in which the tribe took ownership of the six remaining patents and an upfront payment of $13.75 million, as well as $15 million per year in royalties.

The plan was for St. Regis to grant Allergan the exclusive licensing rights and seek immunity to avoid the patent review process.

The deal was criticized by lawmakers who called it a "blatant effort" to extend the monopoly on Restasis beyond its original patent period.

Originally, the invalidation ruling came from the U.S. District Court for the Eastern District of Texas between Allergan and its competitors Mylan and Teva.