Teva eyes new markets following Barr purchase; DOJ targets Ranbaxy

Teva Pharmaceutical Industries has elaborated on its recent purchase of Barr Pharmaceuticals. The deal, valued at US$7.5 billion, raises interesting questions about Teva’s new scope. The two firms held an acquisition luncheon a few days after the announcement, in which they emphasised the strong strategic fit between the two companies, its expanded product portfolio and pipeline and its increased presence in first-to-file/paragraph IV applications.

Most significantly, Teva discussed its strengthened presence in key global markets; post-takeover, Teva will be able to offer direct sales in more than 60 countries. Eastern and Central Europe were highlighted as areas of strength for the combined firm. Barr and Teva combined would have been ranked fifth in Germany, third in Poland, ninth in Russia and first in Croatia in 2007. The new presence in Europe will be complemented by Teva’s new Spanish capabilities, following the successful completion of Teva’s Bentley Pharmaceutical purchase.

As for future growth opportunities, Teva CEO Shlomo Yanai noted in an interview with the Financial Times that he is now keen to forge a joint venture in Japan to capitalise on the country’s fast-growing generics market. "Right now Japan is more ripe for generics, (but still) difficult to break into," Yanai commented. Japan has traditionally been reluctant to accept generic medicines; the government has been keen to change habits, however, in an attempt to reduce medical costs. Recent rule changes compel generic substitution unless a doctor specifically requests a patented drug on the prescription form.

Any attempt by Yanai and Teva to get into the Japanese generics market is likely to come after Ranbaxy’s entrance via Daiichi Sankyo, which is in the process of buying the Indian firm. The deal between the two is still on track, in spite of recent allegations from the US Department of Justice against Ranbaxy. The DOJ claims that the company submitted false information about stability and bioequivalence to support ANDAs for antiretrovirals distributed by the President’s Emergency Plan for AIDS Relief (PEPFAR) programme. Prominent Congressmen in the US House Committee on Energy and Commerce have now indicated that it will soon commence a formal investigation into the Ranbaxy drug approvals and potential violations of GMP regulations. The moves have seemingly not deterred Daiichi however, which has been keen to stress that its share purchase agreement with Ranbaxy is binding and final.

Jonathan Way - Editor, World Generic Markets

Authorised generic deals come to the fore

The end of June saw a spate of authorised generic deals in the United States. On 24th June, Barr Laboratories entered into supply and licensing agreements for authorised generic versions of Bayer's Yasmin and YAZ (both drospirenone + ethinyloestradiol) oral contraceptive (OC) products. Under the Yasmin agreement, Bayer will supply Barr with an authorised generic version for launch on 1st July 2008; several years earlier than the last-to-expire Bayer patent listed in the FDA's Orange Book. In March, the US District Court for the District of New Jersey ruled in favour of Barr, in the challenge of the patent listed by Bayer's Yasmin product.

On 30th June 2008, under a supply agreement with Solvay Pharmaceuticals, Watson Pharmaceuticals launched an authorised generic dronabinol. Dronabinol is a generic version of Unimed Pharmaceuticals' (Solvay) Marinol capsules. Under the terms agreed, Solvay will supply the dronabinol capsules to the company's subsidiary, Watson Pharma, which will market, sell and distribute the product in the United States. Solvay will receive a share of the profits from Watson's sales of the generic product in the US market. Further details have not been disclosed.
On the same day, Janssen, a division of Ortho-McNeil-Janssen Pharmaceuticals (Johnson & Johnson), launched an authorised generic version of its antipsychotic agent, Risperdal (risperidone), through Patriot Pharmaceuticals (McNeil-PPC [J&J]). This development is a reaction to the FDA granting final approval for Teva Pharmaceutical Industries' ANDA to market a generic version of the drug. As the first company to file an ANDA containing a Paragraph IV certification for this product, Teva has been awarded a 180-day period of marketing exclusivity and shipment has commenced. Generic risperidone could hurt J&J badly, as sales of the Risperdal franchise totalled US$4,549 million in 2007, accounting for 18.3% of pharmaceutical revenue.

The past three years have seen a growing number of authorised generic agreements in the USA; this recent sudden flurry may create more interest in Congress. The last two sessions of Congress have seen attempts at legislation to ban the practice; S. 438 currently languishes at committee stage in the Senate. The long-anticipated publication of an FTC report on the matter may provide a tipping point in support for the legislation; this was anticipated in 2007, yet has still not materialised. Meanwhile, most branded companies now have a policy of issuing authorised generic licences; in the current economic climate, and with significant patent expiries on the horizon, the practice is unlikely to be halted any time soon.

Jonathan Way - Editor, World Generic Market