Prilosec trial to wrap up, ruling timeline unclear
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Prilosec trial to wrap up, ruling timeline unclear
28 May 2002, 12:37pm ET
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By Jed Seltzer
NEW YORK, May 28 (Reuters) - A trial over the right to sell generic versions of lucrative heartburn drug Prilosec is expected to wrap up in the next few weeks, but a ruling may not come for a while, as the judge mulls patent arguments from AstraZeneca Plc (ISEL:AZN) and generic drugmakers.
The trial, pending in New York District Court for the Southern District of New York, began on Dec. 5, 2001. AstraZeneca has succeeded in preventing generic versions of the drug from hitting the U.S. market so far, costing U.S. consumers and insurance companies an extra $1.5 billion since the company originally lost patent protection in October.
Generic drugmakers have asserted in court that AstraZeneca's main patent protection over Prilosec expired on Oct. 5 of last year and argued that additional AstraZeneca patents are either irrelevant or are not infringed by the proposed copycat versions.
Analysts say it is unclear when Judge Barbara Jones will make her rulings in the case -- and whether she will rule on the different stages of the four-stage trial at separate times or write one large decision. Regardless of the judge's method, Wall Street does not expect to see generic forms of Prilosec in U.S. drugstores until at least July -- or much later, if AstraZeneca wins some of the key phases of the trial.
"I don't think anybody, including the attorneys involved in this case, know for sure what her plan is, because she hasn't told people how she is going to rule," said analyst Gregory Gilbert of Merrill Lynch. "I would say we will see a ruling by mid-July -- which means it could be late June -- but by mid-July is a reasonable assumption."
Jones ruled on Monday that AstraZeneca must provide certain key documents and may not use additional delaying tactics to prolong the final phase of the trial, which pits AstraZeneca against generic drugmakers such as Andrx Corp. (NASDAQ:ADRX) and Dr. Reddy's Laboratories (BOM:REDY) (NYSE:RDY).
"The court emphasized that the opinion concerning Phase One is not being held up for the conclusion of Phase Four of the trial," Andrx Chairman Elliot Hahn said.
He said he expects the judge to rule on the first, second and fourth phases of the trial simultaneously, and she can formulate opinions on the first two stages while the fourth stage is being completed.
The third stage is already over, with the judge invalidating certain AstraZeneca patents.
Even if generic drugmakers are successful in pleading their case in New York, they risk incurring significant damages if they launch copycats before the conclusion of an appeals case, which is likely to be brought by AstraZeneca if it loses.
A generic drugmaker that launches a copycat drug but then loses an appeals court decision can face expensive lawsuits from the original manufacturer of the medicine -- especially if the treatment is as lucrative as Prilosec.
AstraZeneca reaped about $6.1 billion in sales from Prilosec last year, about the same amount as 2000, when it ranked as the world's top-selling drug. In 2001, cholesterol medication Lipitor eclipsed Prilosec for the title, generating $7 billion for Pfizer Inc. (NYSE:PFE)
With each day that AstraZeneca delays copycats, it saves Prilosec sales but can also switch patients to its heavily marketed, next-generation version of Prilosec, called Nexium, which has longer patent protection.
The last stage of the trial, Phase Four, is scheduled to begin on June 10 and will last two or three days, according to Goldman Sachs.
Analysts have pegged AstraZeneca's "formulation" patents as key to the court battle -- patents that cover the chemical composition and the various layers of the main ingredient in Prilosec, called omeprazole.
Copyright 2002, Reuters News Service |
