Tom:
Thinking of taking a long position, any comments welcome. News below from Yahoo.
-Victor
Wednesday March 1, 7:19 pm Eastern Time
Judge shoots down key Bristol-Myers Taxol patents (adds analyst comments, paras 12-16) By Ransdell Pierson
NEW YORK, March 1 (Reuters) - A federal judge on Wednesday invalidated key provisions of patents protecting Bristol-Myers Squibb Co.'s (NYSE:BMY - news) blockbuster cancer drug Taxol, a move that was followed by a sharp decline in shares of the nation's No. 3 pharmaceutical company.
The decision by U.S. District Court Judge William Wall, in Newark, N.J., was the most significant ruling yet issued in a two-year patent battle between New Jersey-based Bristol-Myers and nine generic drugmakers that aim to sell their own versions of the drug. Full details of the judge's ruling are not expected until Thursday.
Taxol, or paclitaxel, is Bristol-Myers' second-biggest-selling drug, with 1999 sales of $1.5 billion. It is approved in the United States for treatment of ovarian cancer, breast cancer, non-small-cell lung cancer and for an AIDS-related cancer known as Kaposi sarcoma.
Several of the patents related to Taxol are due to expire this summer. But analysts said another important Bristol-Myers patent relating to a shortened, three-hour infusion of the cancer drug-has more than another decade of life.
IVAX Corp. (AMEX:IVX - news) , a Miami-based generic drug maker, said Wall had ruled that all Taxol patent claims made by Bristol-Myers were invalid, "with the exception of a few specific claims directed solely to the use of Taxol to treat ovarian cancer."
"We have maintained all along that Bristol's patents were invalid and could not be legitimately asserted to block us from competing against Bristol in the paclitaxel market," IVAX President Neil Flanzraich said.
Beginning May 1, Wall is scheduled to preside over a trial of unresolved patent disputes between Bristol-Myers and the generic drug makers, which also include Mylan Laboratories Inc. (NYSE:MYL - news) of Pittsburgh and Schein Pharmaceutical Inc. (NYSE:SHP - news) of New Jersey.
Ivax said the generic drug makers had challenged Bristol-Myers patent claims for use of Taxol in treating breast cancer and ovarian cancer. It said Wall ruled Bristol-Myers claims for breast cancer were invalid, adding the judge would decide on the ovarian cancer claims in the upcoming trial.
"The judge's ruling today not only invalidates a substantial majority of the patent claims asserted by Bristol-Myers Squibb, but has framed the issues for trial on the remaining ovarian-related patent claims in a way that gives us even greater confidence going forward," Flanzraich said.
Bristol-Myers began filing patent-infringement suits in late 1997 against the generic firms after they asked the U.S. Food and Drug Administration for permission to market generic forms of Taxol.
Bristol-Myers spokeswoman Jane Kramer declined to give specifics but said Wall had not invalidated Bristol-Myers' patent claims for use of Taxol to treat ovarian cancer.
"I don't think Taxol sales will collapse even if the generic drug makers prevail in the trial," said Alex Zisson, a Chase Hambrecht & Quist drug analyst.
Zisson said over a third of Taxol revenues come from overseas sales, which will be unaffected by the U.S. patent rulings. And he predicted only two or three rival generic products will hit the U.S. market over the next three years because the active ingredient of Taxol is hard to manufacture.
"This is not catastrophic for Bristol-Myers," said Zisson, who estimated annual U.S. sales of Taxol, about $1 billion, represent only 5 percent of the company's annual global revenues of about $20 billion.
James Keeney, an independent Boston-based drug analyst, said Taxol had been administered to patients by infusion over a 24-hour period until the early 1990s, when costly Bristol-Myers research proved it could be given over only a 3-hour period with fewer side effects.
"The patent on the three-hour infusion extends to 2012. That's Bristol-Myers' most important patent on Taxol and it remains unclear how well it will be protected," he said.
Shares of Bristol-Myers fell 5-1/2 to 51-5/16, or 10.3 percent, in heavy trade on the New York Stock Exchange. IVAX rose 4-1/4 to 27 on the American Stock Exchange. Schein edged up 5/16 to 13-1/8, while Mylan eased 3/16 to 22-13/16, both on the New York Stock Exchange.
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